Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce a property purchase.
The Company has acquired a 24,134 sq ft industrial unit on Moorgreen Industrial Park, Nottingham, four miles from M1 J27. The unit is occupied by Hickling & Squires with a weighted average unexpired term to first break or expiry of 7.0 years.
The unit has a passing rent of £130,000 per annum, reflecting a net initial yield1 of 6.53%.
The agreed purchase price of £1.875 million was funded from the Company’s existing debt facilities, resulting in net gearing2 increasing to 20.7% 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 modern industrial asset in an excellent location. The purchase was agreed off-market and the net initial yield of 6.53% is above average for a market typified by significant occupier demand leading to rental increases.”
1 Passing rent divided by purchase price plus assumed purchaser’s costs.
2 Gross borrowings less cash (excluding tenant rental deposits and retentions) divided by last published property portfolio valuation.