Custodian REIT purchases land with pre-let development in Warwick
16 June 2015
Custodian REIT, the UK property investment company, is pleased to announce the completion of a forward funding agreement for a pre-let development along with the purchase of the development land.
The Company has acquired 1.88 acres of development land at the Tournament Fields development, two miles south west of Warwick at junction 15 of the M40. The location allows easy access to the motorway network, mainline rail services (via Warwick Parkway station) and is close to Birmingham International Airport.
The development comprises a 27,400 sq ft single storey industrial/warehouse unit with construction being phased over an expected five month build period. Development funding will be drawn down via monthly certified payments.
The unit, to be developed by Clowes Developments, has been pre-let to Semcon Product Information UK Limited on a 10.5 year lease with no break option. On completion of the development for a total consideration of £2.635 million, the total passing rent will be £180,000, reflecting a net initial yield of 6.64%.
The agreed land purchase price of £0.85 million was funded from the Company’s existing facilities, with net borrowings following the acquisition of 11.1% loan to value.
Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of “Custodian Capital Limited” (the Company’s external fund manager), said:
“The current shortfall in supply of quality industrial units has led to increased demand for development funding of this kind throughout the UK. This opportunity was of particular interest due to a well located unit and strong tenant on a long term lease. We believe our recent record of investment in pre-let development projects will continue, as the requirement for good quality units in areas of high demand inevitably continues.”
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