Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce it has unconditionally exchanged on the disposal of a portfolio of properties (“the Portfolio”) for £23.355 million, with completion due on 29 September 2021.
The Portfolio comprises five industrial sites in Gateshead, Stockton-on-Tees, Warrington, Stone and Christchurch with a current passing rent of £1.4 million. The properties within the Portfolio were acquired either in the seed portfolio at IPO or within subsequent portfolio acquisitions.
The agreed sale price of £23.355m is £4.07m (21%) above the Portfolio’s 31 March 2021 valuation and £2.13m (10%) above the Portfolio’s 30 June 2021 valuation and will add 0.5p1 to the 30 June 2021 NAV per share on scheduled completion.
Commenting on the disposal, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company’s external fund manager), said:
“Investment demand and pricing for industrial assets are both at record levels, so we believe now is the best time to sell to capitalise on the current, favourable market dynamics to secure a significant profit.
“While the short-term prospects for the each of the properties in the Portfolio remain robust, over the medium term we consider them as non-core assets due to a combination of age, construction, location and site layout limiting future rental growth or demanding significant capital expenditure.
“We have agreed a delayed completion to sustain dividend cover while we re-deploy proceeds which we have already begun to invest pre-emptively in higher quality assets with greater prospects for income and capital growth, better supporting the Board’s objective of increasing dividends in a sustainable way.”
1 Based on the current issued share capital of 420,603,344 shares.