CREI : Custodian REIT acquires European HQ for Portola Packaging, Doncaster, for £4.6m
Custodian REIT has announced that it has purchased an 80,000 square foot manufacturing facility (pictured) in White Rose Way, Doncaster for £4.6m. The property is currently let to Portola Packaging Limited, on a 20 year lease without break clauses, at a current rent of £355k per annum, which reflects a net initial yield of 7.25%. The property serves as Portola’s European HQ and UK manufacturing facility. Portola is a division of Silgan Holdings which is a major supplier of plastic lids, closures and containers for the dairy, juice and food industries. The property also includes some undeveloped land, which provides the potential to accommodate any future expansion in Portola’s operations.
The purchase was funded using CREI’s £25m revolving credit facility (cash deployed under the facility is now £12.5m, and brings the total funds invested since CREI’s IPO in March 2014 to £48.4m. Borrowings have increased to 8.7% loan to value, in line with the stated investment strategy of increasing gearing towards a target loan to value ratio of 25%.
CREI’s portfolio consists of properties let to institutional grade tenants on long leases throughout the UK. It’s policy is to invest in properties between £2m and £5m.