Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce a further property purchase.
The Company has acquired a 20,012 sq ft office building on Fountain Street, Manchester which is a short walk from Piccadilly Gardens and Oxford Road station. Other local occupiers include Savills, Sixteen Real Estate, Chartered Wealth Management and Royal & Sun Alliance Insurance.
The property comprises basement parking and six floors let to Leyton UK, Meridian Healthcomms, Venditan and Fourthline with a weighted average unexpired lease term to first break or expiry (“WAULT”) of 1.2 years and an aggregate rent of £406,704 per annum, reflecting a net initial yield of 6.10%.
The agreed purchase price of £6.25 million was funded from the Company’s existing debt facilities, resulting in net gearing increasing to 25.2% 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 high quality office building in a proven central Manchester location, which continues the pre-emptive deployment of proceeds from the sale of a portfolio of industrial properties due to complete later this month. The short WAULT provides potential asset management opportunities to enhance value and increase passing rent.”
1 Aggregate rent, which includes rental guarantees, divided by valuation plus estimated purchaser’s costs.
2 Gross borrowings less cash (excluding tenant rental deposits and retentions) divided by last published property portfolio value.