Custodian REIT is spending £4.2m to buy a 3.5 acre plot and fund the development of a warehouse unit at Kingswood Lakeside, Cannock, adjacent to the A5 and Junction T7 of the M6 Toll, and three miles from the M6.
The development comprises a 63,000 sq ft warehouse unit, with construction being phased over an expected 10 month build period. Custodian REIT’s funding for the development will be drawn-down via monthly certified payments.
The unit, to be developed by Coltham Developments, has been pre-let to Hellerman Tyton Limited on a 20 year lease without break. On completion of the development the total passing rent will be £279,090, reflecting a net initial yield of 6.38% (assuming actual purchaser’s costs) rising to 7.06% from year five. The lease will provide for a fixed rental uplift at year five and two further rent reviews linked to the Retail Prices Index.
The land purchase price of £0.47m was funded from the Company’s existing facilities, with net borrowings following the acquisition of 16.7% loan to value.
CREI : Custodian REIT buys land for pre-let development