29 January 2015
Custodian REIT purchases office building in Solihull
Custodian REIT is pleased to announce a further property purchase, bringing the total funds invested following its initial placing and admission to the Official List on 26 March 2014 to £91.5 million.
The Company has acquired an 8,894 sq ft, three storey office building in the centre of Solihull, with excellent access to Solihull train station, Birmingham airport and junctions four and five of the M42.
The property is let to Lyons Davidson Limited (“Lyons Davidson”) on a lease expiring on 29 October 2024 at an annual rental of £189,000 per annum, reflecting a net initial yield of 9.05%.
The agreed purchase price of £1.975 million was funded from the Company’s debt facilities, with £11.1 million now deployed from the Company’s revolving credit facility in addition to £20 million of term debt. Total net borrowings have increased to 16.3% loan to value.
“We are pleased to have secured this well-let office building in Solihull’s town centre. The investment will provide a generous running yield and the comfort of a strong residual value, supported by the strength of the Solihull property market. Whilst the property is let entirely to Lyons Davidson, who have been in occupation since 2009, the property would also suit multiple tenants, providing flexible alternatives for the future. The tenant has recently demonstrated a long-term commitment to the location by relocating a subsidiary company to share occupation of the premises.”
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