28 August 2014

Custodian REIT increase property portfolio with acquisition in Doncaster

Custodian REIT is delighted to announce a further property purchase in Doncaster, bringing the total funds invested following its initial placing and admission to the Main Market of the London Stock Exchange to £48.4 million.

The company has acquired an 80,000 sq ft manufacturing facility situated on White Rose Way, Doncaster, which is conveniently place near the M18 and A1. The property is let to Portola Packaging Limited, a division of Silgan Holdings Inc. This is one of the largest global manufacturers of plastic lids, closures and containers for the dairy, juice and food industries. The property comprises the European headquarters and the Group’s main UK manufacturing facility.

The property is let on a 20 year lease expiring on 12 July 2021 with no breaks at a current rent of £355,000 per annum, reflecting a net initial yield of 7.25%.

The purchase consideration of £4.625 million was funded from the company’s existing £25 million revolving credit facility, increasing total cash deployed from the facility to £12.5 million. Borrowings have increased to 8.7% loan to value, in line with the stated investment strategy of increasing gearing towards a target loan to value ratio of 25%.

Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (Custodian REIT’s external fund manager), said:

“This acquisition further diversifies Custodian REIT’s holdings within the industrial sector, increasing our exposure to manufacturing. The tenant operates a high capacity production facility at the site, which is absolutely core to its operation. The property also includes some undeveloped land, which provides the potential at accommodate any future expansion in the tenant’s operations. We believe there is strong occupier demand for this type of property.”

For more information on investments, please visit Custodian REIT’s property portfolio.