5 November 2014
Custodian REIT purchase warehouse in Warrington
Custodian REIT is pleased to announce the purchase of a warehouse in Warrington, bringing the total funds invested following its initial placing and admission to the Official List on 26 March 2014 to £54.4 million.
The company has acquired a 112,435 sq ft warehouse on a 6.84 acre site at Chesford Grange, Warrington, just off Junction 21 of the M6. The property is let to JTF Wholesale Limited who operate 13 wholesale warehouses around the UK and have traded from the premises for the last eight years.
The property is let on a 15 year lease expiring on 14 December 2023 with no breaks at a current rent of £485,000 per annum, reflecting a net initial yield of 7.64%.
The purchase consideration of £6.0 million was funded from the company’s cash resources following a placing of shares in October 2014 which raised £25 million (before costs and expenses). The company has no debt and £6 million remaining cash to deploy from the placing monies raised.
“Warrington has long attracted businesses due to its strategic location at Junction 21 of the M6 motorway, particularly for larger distribution units. This 112,435 sq ft, refurbished building on a large site in such close proximity to the motorway should ensure long term income, with the prospect of rental growth. The agreed price reflects a capital value per sq ft of only £53 which is close to or below the cost of building a replacement property demonstrating the underlying value of the real estate.”
For more information on the properties, please visit the Custodian REIT portfolio webpage.
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