Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce a property purchase.
The Company has acquired a 29,676 sq ft industrial unit on Wester Gourdie Industrial Estate, Dundee, adjacent to the A90. The unit is occupied by Menzies Distribution Limited with an unexpired term to first break or expiry of 5.2 years.
The unit has a passing rent of £117,500 per annum, reflecting a net initial yield1 of 5.89%.
The agreed purchase price of £1.9 million was funded from the Company’s existing debt facilities, resulting in net gearing2 increasing to 23.7% 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 well located industrial distribution asset, let to a strong and expanding tenant that we know well. The area displays strong evidence of increasing industrial rents, offering short-medium term asset management opportunities.”
1 Passing rent divided by purchase price plus assumed purchasers’ costs.
2 Gross borrowings less unrestricted cash divided by last published property portfolio valuation.