Custodian REIT plc : Purchase of Property

19 November 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 the 43,000 sq ft Evesham Shopping Park, one mile from Evesham town centre and two miles from the A46, linking the M5 and M40.  The park comprises a terrace of five units occupied by Next, M&S, Boots, Argos and Poundstretcher, with nearby retailers including Tesco, and B&M.

The units' have a weighted average unexpired lease term to first break or expiry of 6.8 years and a price reflecting a net initial yield[1] of 6.04%.

The agreed purchase price of £14.2 million was funded from the Company's existing debt resources, resulting in net gearing[2] increasing to 22.8% loan to value.

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

"Both Next and Boots have recently extended their leases at the passing rent indicating their commitment to the location.  B&M Bargains has recently constructed a 25,000 sq ft unit adjacent to the park, demonstrating that together with the Tesco Extra opposite this is the prime out of town location in Evesham.  We are pleased to have secured this opportunity to acquire a very well-let park at a price which reflects a discount to recent market pricing.

"We believe well located, out-of-town, retail warehouse properties which, either do not compete with on-line retailing or are complimentary, through offering easy click and collect services will remain in demand despite the current restructuring of the retail market.  This acquisition presented an opportunity to buy a prime asset, let to blue chip tenants, at a sufficiently high yield to support our fully covered dividend."

1 Passing rent divided by valuation plus assumed purchasers' costs.

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

-Ends-

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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 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.