5 November 2018
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 high street unit on The Grove in Stratford, East London, comprising a ground floor retail unitwith an upper floor office suite. Nearby occupiers include Morrisons, Boots, Argos, Lidl and Nando's.
The property is let to Foxton's Estate Agents and The Incorporated Trustees of the Universal Church of the Kingdom of God ("UCKG") with leases expiring on 30 April 2031 and 2 May 2025 respectively and a current passing rent of £150,935 per annum, reflecting a net initial yield of 6.78%.
The agreed purchase price of £2.1 million was funded from the Company's existing debt resources, resulting in net gearing increasing to 20.6% loan to value.
Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company's discretionary investment manager), said:
"Following the London 2012 Olympics, Stratford is now well established as East London's most significant retail and leisure destination, with completion of the Crossrail project due in December 2019 set to further enhance the area. Both tenants are committed to the location having recently renewed their leases at higher rents and the resulting weighted average unexpired lease term to first break of over eight years adds secure income to the portfolio. The title provides the ability to use the adjacent Morrison's car park without restriction, providing almost unlimited car parking, which is a major selling point should the premises ever become vacant."