Custodian REIT has acquired a 19,493 sq ft trade counter unit on Stephenson Road, North Hykeham, three miles south-west of Lincoln and one mile from the A46. The unit is let to MKM Building Supplies Limited on a lease expiring on 10 June 2022. Net passing rent is GBP169,711 per annum, reflecting a net initial yield of 6.90%, with a fixed rental uplift to GBP192,012 per annum from June 2017 reflecting a reversionary yield of 7.81%. Adjacent occupiers include Lindum Group, Lincolnshire County Council and Scott Storage.
The agreed purchase price of £2.325m was funded from the Company’s existing credit facilities, with net borrowings following the acquisition of 16.0% loan to value.
Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company’s discretionary investment manager), said: “The lease carries a fixed uplift in 2017 and the tenant has demonstrated its commitment to the location. The site is prominently located in the principal commercial district of Lincoln bordered by the B1190, A1434 and B1003, providing good road links. Land adjacent to the property has seen the recent development of purpose built units, emphasising the strength and demand for good quality property in this strategic area“.
Separately, Custodian REIT has sold a 2,313 sq ft retail unit located on Union Street, Swansea for£0.5m, £0.1m above its 19 June 2015 acquisition value. The property was acquired as part of a portfolio, but is regarded as being subscale for the Company. They say the sale proceeds will be used to help fund acquisitions which better fit the Company’s investment strategy.
CREI : Custodian REIT buys near Lincoln sells in Swansea