The Company has acquired a 37,804 sq ft retail warehouse in Leicester, near the Beaumont Shopping Centre and the city's outer ring road with excellent links to the M1. The unit is occupied by Matalan, with nearby retailers including Tesco, Argos,Wilko and Superdrug.
The unit's lease expires on 2 October 2028 with a passing rent of £502,900 per annum, reflecting a net initial yield1 of 7.36%.
The Company acquired the property by purchasing the entire issued share capital of BL (Leicester) Limited and its wholly owned subsidiaries, Belgrave Land (Beaumont Leys) Limited and Belgrave Land (Leicester) Limited, which respectively hold the long-leasehold interest in the property and its occupational lease.
The agreed purchase price of £6.661 million was funded from the Company's existing debt resources, resulting in net gearing2 increasing to 22.2% loan to value.
Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company'sdiscretionary investment manager), said:
“Matalan has been trading from this location, adjacent to the 300,000 sq ft Beaumont Shopping Centre, for many years and we are delighted to have completed this acquisition. We believe the property will enhance Custodian REIT's retail warehouse portfolio with a strongly trading business, which has just invested circa £0.5m re-fitting the store.”