Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce a property purchase.
The Company has acquired four industrial units covering an aggregate 23,250 sq ft on Hilton Business Park, Derby, one mile from the A50 which connects the M1 and M6. The units are occupied by M P Bio Science, Shakespeare Pharma and Jangala Softplay with a weighted average unexpired term to first break or expiry of 2.0 years.
The units have an aggregate passing rent of £134,065 per annum, reflecting a net initial yield1 of 6.39%.
The agreed purchase price of £1.975 million was funded from the Company’s existing cash resources, resulting in net gearing2 increasing to 24.1% 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 modern industrial asset at an attractive yield. This acquisition pre-emptively deploys the disposal proceeds from some smaller retail asset sales expected to complete during December 2020, providing the Company with more potential for long-term rental growth.”
1 Passing rent divided by purchase price plus assumed purchasers’ costs.
2 Gross borrowings less unrestricted cash divided by last published property portfolio valuation.