Custodian REIT : Purchase of property in Grantham

22 December 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 £81.2 million. 

The Company has acquired the 24,322 sq ft Discovery Retail Park on London Road, Grantham, comprising three retail warehouse units let to Carpetright plc, Poundstretcher Limited and Laura Ashley Limited.  The park has 92 onsite parking spaces and is close to the town centre, railway station and the A1.  Occupiers in the immediate vicinity include B&Q, M&S Simply Food, Halfords, Farmfoods, Topps Tiles and Majestic Wine.  

The units' leases expire on 11 April 2020, 24 December 2020 and 30 May 2021 with a total passing rent of £324,286 per annum, reflecting a net initial yield of 7.00%.

The agreed purchase price of £4.375 million was funded from the Company's existing facilities, with total funds of £12.5 million now deployed from the Company's revolving credit facility.  Borrowings have increased to 12.6% loan to value, in line with the stated investment strategy of a target gearing ratio of 25% loan to value.

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

"Discovery Retail Park is situated on London Road, Grantham's prime out of town retail pitch.  It has an excellent parking ratio and the recent opening of an adjacent M&S Simply Food demonstrates the strength of the location." 

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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 £55 million through an initial public offering and raised a further £25 million 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.