27 May 2016

Custodian REIT has acquired a 55,236 sq ft, high bay distribution unit in Tamworth

Custodian REIT is pleased to announce a further property purchase.

Property Purchase

The Company has acquired a 55,236 sq ft, high bay distribution unit on Relay Park, Tamworth, located at junction 10 of the M42 with excellent links to the M6 and M1. Nearby occupiers include Sainsbury’s, Aldi, Yusen Logistics, XPO Logistics and Headlam Distribution.

The unit is let to Schenker Limited (trading as DB Schenker), a subsidiary of Deutsche Bahn, on a lease expiring on 27 September 2017.

The agreed purchase price of £4.7 million was funded from the Company’s existing debt facilities, resulting in net borrowings increasing to 12.7% loan to value.

Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company’s discretionary investment manager), said:

“We are delighted to have secured this high quality, modern unit within the ‘Golden Triangle’ of UK distribution. The passing rent is £280,000 per annum but we forecast rent exceeding £345,000 in 2017, reflecting a reversionary yield of circa 7%. This acquisition further demonstrates the relative value of sub-£10 million assets in a market where large distribution units can achieve prices reflecting yields of less than 5%.”