2 March 2018

 

 

Custodian REIT plc

 

("Custodian REIT" or "the Company")

 

Purchase of Land with Pre-let Development

 

Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce the completion of a forward funding agreement for a pre-let development, together with the purchase of the development land. 

 

The Company has acquired 0.4 acres of land in Maypole, Birmingham, adjacent to the busy A435 Alcester Road, one of the main arterial routes into Birmingham city centre.

 

The development will comprise an 1,800 sq ft drive-through coffee shop with 16 parking spaces and construction is being phased over an expected six month build period. 

 

The unit, to be developed by Deeley Properties Limited, has been pre-let to Starbucks Coffee UK Limited on a 15 year lease, without break, with five yearly upward only market rent reviews.  On completion of the development for a total consideration of £1.75 million, the total passing rent will be £120,000 per annum reflecting a net initial yield[1] of 6.43%.

 

The land purchase price of £1.0 million was funded from the Company's existing cash facilities, resulting in net gearing2 increasing to 21.7% loan to value.

 

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

 

"The growth of drive-through stores is being driven by the likes of Costa, Starbucks and Greggs and is proving popular with retailers and customers, which is leading to rental growth in the sector.  The location of this property on an arterial access route for Birmingham city centre allows easy accessibility for traffic both entering and leaving the City, enhancing the site's offering."

 

1 Passing rent divided by valuation plus estimated purchaser's costs.

2 Gross borrowings less unrestricted cash divided by last published property portfolio valuation.

 

-Ends-

 

For further information, please contact:

 

Custodian Capital Limited
Richard Shepherd-Cross / Nathan Imlach / Ian Mattioli MBE	Tel: +44 (0)116 240 8740
	www.custodiancapital.com

 

Numis Securities Limited
Nathan Brown / Hugh Jonathan	Tel: +44 (0)20 7260 1000
	www.numiscorp.com

 

Camarco
Ed Gascoigne-Pees	Tel: +44 (0)20 3757 4984
	www.camarco.co.uk

 

Notes to Editors

 

Custodian REIT plc is a UK real estate investment trust, which listed on the main market of the London Stock Exchange on 26 March 2014.  Its portfolio comprises properties predominantly let to institutional grade tenants on long leases throughout the UK and is principally characterised by properties with individual values of less than £10 million at acquisition. 

 

The Company offers investors the opportunity to access a diversified portfolio of UK commercial real estate through a closed-ended fund.  By targeting sub £10 million lot size, regional properties, the Company intends to provide investors with an attractive level of income with the potential for capital growth. 

 

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

 

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