Custodian REIT is pleased to announce a further property purchase.
The Company has acquired a 31,062 sq ft retail warehouse in Galashiels, located on the A7 close to the town centre and railway station. Nearby occupiers include Tesco, Asda, Halfords and Aldi.
The property is let to B&Q plc on a lease expiring on 27 December 2024 with a current passing rent of £275,000 per annum, reflecting a net initial yield1 of 8.24%.
The agreed purchase price of £3.145 million was funded from the Company’s existing debt facilities, resulting in net gearing2 increasing to 16.8% 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 property let to a well-known retailer on a long-term lease. The property is the dominant DIY store in a wide catchment area and is centrally located in Galashiels, which is a major commercial centre for the Scottish Borders region. The tenant has been in occupation since 1980 and remains committed to the property having recently concluded a major estate transformation plan.”
1 Portfolio passing rent divided by portfolio valuation plus estimated purchasers’ costs.
2 Gross borrowings less unrestricted cash divided by last published property portfolio valuation.