Custodian REIT purchases property portfolio
22 June 2015
Custodian REIT, the UK property investment company, is pleased to announce the acquisition of a mixed use portfolio of 10 properties.
The Company has acquired a national portfolio of six high street shops with an average lot size of £1.21 million and four industrial units with an average lot size of £1.83 million. Locations include Chester, St Albans, Bristol, Farnborough and Kettering and tenants within the portfolio include BSS Plc, EE Limited, Kuoni Travel Limited, Shoe Zone Limited, Wilko Retail Limited and Waterstones Booksellers Limited.
The agreed purchase price of £14.6 million was funded from the Company’s existing credit facilities, with net borrowings following the acquisition increasing to 16.7% loan to value.
The portfolio’s current passing rent of £1.12 million reflects a net initial yield of 7.27% with an average weighted unexpired lease term of 6.2 years. There are ongoing negotiations with two tenants to re-gear short, unexpired lease terms, with the potential to extend leases with existing tenants.
Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited, said:
“Custodian REIT’s investment strategy of targeting small lot size property makes this portfolio an excellent fit. Despite widespread price inflation in the market, the Company’s strategy is proving resilient in delivering a high income return from a well-diversified portfolio, in locations with low vacancy rates that have future rental growth potential.”
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