Purchase of Property

RNS Number : 1608W

Custodian REIT PLC

05 November 2014

 

5 November 2014

Custodian REIT plc

("Custodian REIT" or "the Company")

Purchase of Property

Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce a further property purchase, bringing the total funds invested following its initial placing and admission to the Official List on 26 March 2014 to £54.4 million. 

The Company has acquired a 112,435 sq ft warehouse on a 6.84 acre site at Chesford Grange, Warrington, just off Junction 21 of the M6.  The property is let to JTF Wholesale Limited who operate 13 wholesale warehouses around the UK and have traded from the premises for the last eight years.

The property is let on a 15 year lease expiring on 14 December 2023 with no breaks at a current rent of £485,000 per annum, reflecting a net initial yield of 7.64%. 

The purchase consideration of £6.0 million was funded from the Company's cash resources following a placing of shares in October 2014 which raised £25.0 million (before costs and expenses).  The Company has no debt and £6.0 million remaining cash to deploy from the placing monies raised.   

Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company's external fund manager), said:

"Warrington has long attracted businesses due to its strategic location at Junction 21 of the M6 motorway, particularly for larger distribution units.  This 112,435 sq ft, refurbished building on a large site in such close proximity to the motorway should ensure long term income, with the prospect of rental growth.  The agreed price reflects a capital value per sq ft of only £53 which is close to or below the cost of building a replacement property demonstrating the underlying value of the real estate."

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For further information:

Further information regarding the Company can be found at the Company's website www.custodianreit.com or please contact:

Custodian Capital Limited
Richard Shepherd-Cross / Nathan Imlach / Ian Mattioli	Tel: [phone]
	www.custodiancapital.com

Numis Securities Limited
Nathan Brown / Hugh Jonathan	Tel: [phone]
	www.numiscorp.com

Camarco
Ed Gascoigne-Pees	Tel: [phone]
	www.camarco.co.uk

Notes to Editors

Custodian REIT plc is a UK real estate investment trust ("REIT") listed on the London Stock Exchange.  The Company launched on 26 March 2014, acquiring a portfolio of £95 million of UK commercial property.  This was sourced from an existing portfolio of 48 properties held by clients of Mattioli Woods plc in a syndicated structure.  The diverse portfolio consisted of properties let to institutional grade tenants on long leases throughout the UK. 

The Company raised gross proceeds of £55m through an initial public offering and raised a further £25m via a subsequent placing.  It invests in a diversified portfolio of UK commercial properties to achieve its investment objective of providing shareholders with an attractive level of income together with the potential for capital growth through a closed-ended fund. 

The target portfolio is characterised by small lot sizes with individual property values of less than £7.5 million at acquisition. 

Custodian Capital Limited is the discretionary investment manager of the Company.

For more information visit www.custodianreit.com and www.custodiancapital.com. 

 

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