18 December 2014
Custodian REIT purchases industrial warehouse in Salford
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 £76.7 million.
The Company has acquired a 69,842 sq ft modern industrial warehouse on Agecroft Commerce Park, Salford, located three miles north west of Manchester city centre and two miles from Junction 15 of the M60.
The property is let to Restore 2 Limited (trading as Cintas Document Management), a leading provider of integrated document management solutions including archiving, scanning and digitisation, and business process outsourcing. The lease expires on 30 September 2028, at a passing rent of £403,676 per annum, reflecting a net initial yield of 7.9%.
The agreed purchase price of £4.825 million was funded from the Company’s existing facilities, with £7.5 million deployed from the Company’s revolving credit facility. Total net borrowings have increased to 10.0% loan to value, in line with the stated investment strategy of a target gearing ratio of 25% loan to value.
Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company’s external fund manager), said:
“This modern industrial unit offers a high-specification warehouse to its tenant and in return will generate stable, long-term income for Custodian REIT, supporting the target return.”
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