Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce a further property purchase.
The Company has acquired a 72,582 sq ft industrial unit on Hilton Business Park, Derby, located one mile from the A50 which connects the M1 and M6. Nearby occupiers include Amco Logistics and NR Evans Distribution.
The unit is let to Daher Aerospace Limited on a lease expiring on 14 September 2031 with a current passing rent of £400,060 per annum reflecting a net initial yield of 6.72%.
The agreed purchase price of £5.585 million was funded from the Company’s existing debt facilities, resulting in net gearing increasing to 23.3% 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 acquired this modern unit located in the developing logistics and distribution corridor of the A50. There is significant demand in the Midlands for high quality industrial units with good communication links. Given the affordable level of passing rent and the increasing cost of development limiting the supply of competing space, we expect this demand to lead to rental growth at the September 2021 rent review.”
1 Passing rent divided by valuation plus estimated purchasers’ costs.
2 Gross borrowings less unrestricted cash divided by last published property portfolio valuation.