Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce a property purchase.
The Company has acquired two retail units on Winchester High Street covering an aggregate 5,228 sq ft let to Nationwide Building Society and Hobbs. Nearby occupiers include Marks & Spencer, Boots, Halifax Bank and Superdrug.
The tenants’ leases expire in April 2028 and December 2031 respectively at an aggregate current passing rent of £249,200 per annum, reflecting a net initial yield1 of 6.41%.
The agreed purchase price of £3.65 million was funded from the Company’s existing debt facilities, resulting in net gearing2 increasing to 20.5% loan to value.
Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company’s discretionary investment manager), said:
“Winchester is one of the UK’s most vibrant shopping locations3. We are delighted to have secured this property on Winchester city centre’s prime retail pitch which remains a sought after location with occupation levels well above average. We have recently seen prime high street retail rents improving for the first time in over four years and we feel this asset is a positive addition to our diversified portfolio at an attractive yield, well above Winchester’s historical average.”
1 Passing rent divided by purchase price plus assumed purchasers’ costs.
2 Gross borrowings less cash (excluding tenant rental deposits and retentions) divided by last published property portfolio valuation.
3 Source: Retail-week.com