17 December 2014
Purchase of industrial unit in Milton Keynes
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 £71.9 million.
The Company has acquired a 52,532 sq ft industrial unit on the Tilbrook Industrial Estate, Milton Keynes, with excellent access to Junction 13 of the M1. The property is let to Massmould Holdings Limited, a manufacturer of plastic injection moulded products and part of the multinational Global Closure Systems Group, which is one of the world’s largest providers of plastic closure solutions.
The property is let on a 15 year reversionary lease expiring on 27 February 2031, subject to a tenant only break option on 28 February 2026. The current passing rent is £280,000 per annum, reflecting a net initial yield of 6.96%.
The agreed purchase price of £3.8 million was funded from the Company’s existing facilities, with £2.5 million deployed from the Company’s revolving credit facility. Total net borrowings have increased to 7.4% 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:
“We are delighted to have secured a busy manufacturing facility on the Tilbrook Industrial Estate, Milton Keynes, which has a long record of full occupancy. Massmould has recently committed to a 15 year reversionary lease, re-affirming a commitment to the building. We believe these dynamics should put the property on course for future rental growth.”
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