7 October 2015
Custodian REIT purchases a prominent 39,600 sq. ft. office building in Birmingham city centre
Custodian REIT is pleased to announce a further property purchase.
The Company has acquired Lancaster House, a prominent, 39,600 sq ft office building on the corner of Newhall Street and Great Charles Street, in Birmingham city centre.
The property is let to 15 tenants with lease expiries between 30 June 2016 and 31 July 2025, with a total passing rent of £505,752 per annum, reflecting a net initial yield of 7.19%. Upon the letting of the last remaining, fully refurbished office suite, the expected yield will be enhanced to 7.64%.
The agreed purchase price of £6,650,000 was funded from the Company’s existing debt facilities, resulting in net borrowings increasing to 18.2% loan to value.
Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company’s discretionary investment manager), said:
“We are delighted to have secured this recently refurbished office building in Birmingham city centre where the office market is resurgent and prospects for rental growth strong. The property offers open-plan, 2,000-3,350 sq ft office suites which are a good fit with local occupational demand. This, combined with reducing supply, as a result of a number of nearby buildings being converted to residential use, could further compound rental growth prospects.”
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