Custodian REIT plc : Purchase of Property
Custodian REIT plc
("Custodian REIT" or "the Company")
Purchase of Property
Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce a further property purchase.
The Company has acquired a 16,770 sq ft car dealership on Battlefield Enterprise Park, Shrewsbury's premier car sales location, four miles from the town centre and five miles from the busy A6, linking Shrewsbury to the West Midlands. Nearby occupiers include Audi, Volkswagen, BMW, Mercedes-Benz, Renault, and Ford.
The property is let to TJ Vickers and Sons Limited on a lease expiring on 31 September 2025 with a current passing rent of £120,000 per annum, reflecting a net initial yield1 of 6.75%.
The agreed purchase price of £1.67 million was funded from the Company's existing debt resources, resulting in net gearing2 increasing to 20.8% loan to value.
Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company'sdiscretionary investment manager), said:
"We are delighted to have secured this property within Shrewsbury's prime motor retail pitch, let on a long-term lease to a strong tenant. The Company has exchanged contracts to acquire an adjacent Audi dealership, which will create economies of scale in managing both properties and assist with any future asset management."
1 Passing rent divided by valuation plus estimated purchasers' costs.
2 Gross borrowings less unrestricted cash divided by last published property portfolio valuation.