Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce the disposal of a property from its portfolio.
The Company has sold a 22,224 sq ft industrial warehouse unit in Southwark for £12.0 million, £4.4 million (58%) ahead of the 30 June 2018 valuation, representing a net initial yield1 of 2.95%.
The property was purchased in 2014 for £3.12 million as part of the initial portfolio acquired on the Company’s admission to the London Stock Exchange. The Company intends to use the proceeds from the disposal to fund acquisitions that will enhance dividend cover.
Commenting on the disposal, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company’s external fund manager), said:
“The lack of available investment stock in Central London combined with strong investment demand and a recent, substantial rental increase has led to significant valuation increases. Over and above this, redevelopment potential and identification of a special purchaser has delivered a substantial profit over and above the most recent valuation.”
1 Passing rent divided by sale price plus estimated purchasers’ costs.