Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce a further property purchase.
The Company has acquired Foundry House, a 26,051 sq ft office building within Riverside Exchange, an established office location on the northern edge of Sheffield city centre adjacent to the inner ring road.
The property is let to the Secretary of State for Communities and Local Government operating branches of the Home Office and the Health and Safety Executive on two leases expiring on 30 June 2022, with aggregate passing rent of £371,299 per annum reflecting a net initial yield of 9.79%.
The agreed purchase price of £3.56 million was funded from the Company’s existing debt facilities, resulting in net gearing increasing to 23.1% 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 recently refurbished office building in Sheffield city centre where the office market has grown year-on-year since 2014. The property offers open-plan, well configured floor plates from 5,455 sq ft which are a good fit with local occupational demand and its position opposite a Home Office occupied 200,000 sq ft office building supports the potential long-term commitment of the tenant.”
1 Passing rent divided by valuation plus estimated purchaser’s costs.
2 Gross borrowings less unrestricted cash divided by last published property portfolio valuation.