Custodian REIT has announced that it is paying £1.2m for a parcel of development land in Portishead. The 1.48 acre site will be used for the development of three retail warehouse/leisure units with construction to be phased over an expected seven month build period. The units have been pre-let to JD Wetherspoon plc on a 25 year lease with a tenant only break option after 15 years, Majestic Wine Warehouses Limited on a 25 year lease with a tenant only break option after 10 years and Homebargains on a 15 year lease with no break option. On completion of the development for a total consideration of £3.9m the total passing rent will be £265,000, reflecting a net initial yield of 6.5%.
They have also agreed a £10m term loan with Lloyds Bank at a rate of 2% above LIBOR repayable on 10 October 2019.