Custodian REIT plc : Custodian REIT sells North-East Shopping Centre for £9.3 million, ahead of 2021 purchase price

21 October 2022

Custodian REIT plc

(Custodian REIT or the Company)

Custodian REIT sells North-East Shopping Centre for £9.3 million, ahead of 2021 purchase price

Custodian REIT (LSE: CREI), which seeks to deliver a strong income return by investing in a diversified portfolio of smaller regional properties across the UK, is pleased to announce the disposal of its only high street shopping centre for £9.3 million1.  The Company purchased the 73,367 sq ft shopping centre in Gosforth as part of its acquisition of DRUM Income Plus REIT plc in November 2021 and the price reflects a 3.5% premium to the £8.975 million apportioned value of the asset at that time.

Since acquisition, the Company has completed a number of asset management activities which have increased occupancy from 93.6% to 95.7% and grown the rent roll by £78k (8.5%), with the asset producing £0.9 million of rental income over the period of ownership.

The Company intends to invest the sale proceeds in its ongoing pipeline of building refurbishments, which is expected to enhance rents and improve the environmental performance of the Companys portfolio.

Commenting on the disposal, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Companys external fund manager), said: Shopping centres as a sector have not performed well since the COVID-19 pandemic and do not fit comfortably within our investment objectives of selecting high quality, well located regional properties in areas where future rental growth is underpinned by strong supply/demand fundamentals. The asset management work completed since acquisition and the accretive terms of the DRUM Income Plus REIT plc purchase have allowed us to achieve a profitable sale despite current market uncertainty.  This disposal provides additional capital for our programme of improving assets we feel will better capture tenant demand over the long term as well as enhancing their environmental credentials.

1 Adjusted for rental top-ups on vacant units.

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Notes to Editors

Custodian REIT plc is a UK real estate investment trust, listed on the main market of the London Stock Exchange.  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 £15 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 £15 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.