Custodian REIT plc : Purchase of Property

4 December 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 44,844 sq ft Jubilee Close Retail Park in Weymouth, comprising three units occupied by B&Q, Halfords and Sports Direct with nearby retailers including Currys, KFC and Matalan.

The units' have a weighted average unexpired lease term to first break or expiry of 7.8 years.  Current aggregate passing rent is £803,000, reflecting a net initial yield1 of 6.97%.

The agreed purchase price of £10.8 million was funded from the Company's existing debt resources, resulting in net gearing2 increasing to 25.5% loan to value.

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

"Despite the investment market's aversion to the retail sector, we believe that these occupiers will continue to prosper despite challenges from on-line sales and with nearly 8 years contractual income, strong trading performances and a 7% initial yield, this property meets our investment criteria.

"We believe well located retail warehouse properties which either do not compete with on-line retailing or are complementary, through offering easy click and collect services, will remain in demand despite the current restructuring of the retail market."

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.