Custodian REIT purchases office building in Glasgow
27 February 2015
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 £94.0 million.
The Company has acquired a 17,384 sq ft, four storey office building in Glasgow city centre, with excellent transport links to junction 19 of the M8, Central and Queen Street train stations and Buchanan Street underground station.
The property is let to four tenants with lease expiries between 30 March 2018 and 29 September 2022, with total rental income of £222,008 per annum, reflecting a net initial yield of 8.51%.
The purchase consideration of £2.465 million was funded from the Company’s cash resources following a placing of shares in February 2015 which raised £22.6 million (before costs and expenses). The Company’s net borrowings following the acquisition are 6.0% loan to value.
“We are delighted to have secured this recently refurbished, fully-let office building in Glasgow city centre, which at a purchase price of £142 per sq ft represents excellent value relative to current and historical levels. The property benefits from open-plan, 3,500-3,800 sq ft floor plates that are a good fit with current occupational demand and we believe the property should benefit from rental growth over the medium term.”
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