Custodian REIT plc : Purchase of Property

4 June 2018

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.

The Company has acquired a 77,242 sq ft health and fitness centre in Lincoln, prominently located on the A46 within a leading mixed use, out-of-town scheme with businesses in the immediate vicinity including Ibis Hotel, Fayre & Square and Frankie & Benny's.

The unit is let to Total Fitness Health Clubs Limited on a lease expiring on 22 June 2040, subject to a tenant-only break on 22 June 2035.  Current passing rent is £350,000 per annum reflecting a net initial yield1 of 7.64%.

The agreed purchase price of £4.3 million was funded from the Company's existing debt resources, resulting in net gearing2 increasing to 22.4% loan to value.

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

"We are delighted to have acquired this high specification, purpose-built health and fitness centre in an established and prominent location with an unexpired lease term to first break of 17 years.  The tenant has recently undertaken an extensive internal refurbishment, highlighting its confidence in the continued performance of the location."

1 Portfolio passing rent divided by portfolio valuation plus estimated purchasers' costs.

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

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Notes to Editors

Custodian REIT plc is a UK real estate investment trust with a portfolio comprising properties predominantly let to institutional grade tenants throughout the UK, principally characterised by properties with individual values of less than £10m at acquisition.

The Company offers investors the opportunity to access a diversified portfolio of UK commercial real estate through a closed-ended fund.  By principally targeting sub £10m lot size regional properties, the Company intends to provide investors with an attractive level of income and the potential for capital growth, becoming the REIT of choice for private and institutional investors seeking high and stable dividends from well-diversified UK real estate. 

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

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