Custodian REIT has announced that it has acquired the ground floor and part of the first floor of a leisure development in Abbey Sands, Torquay (pictured). The investment comprises four food and drink outlets on the seafront, close to the marina and town centre, let to Le Bistro Pierre Limited, Las Iguanas Limited, Loungers Limited and Jurassic Coast Coffee Limited (trading as Costa Coffee). The four units combined provide a passing rent of £285k per annum and the agreed purchase price of £4.33 million reflects a net initial yield of 6.22. The unexpired lease terms range from 10 to 20 years, with an average of 17.5 years.
In addition to this, the company has also acquired 1.3 acres of development land at the Gunnels Wood Industrial Estate, Stevenage, which is located approximately one mile from junction 7 of the A1(M). The unit has been pre-let to Morrison Utility Services Limited on a 15 year lease, without break, with five-yearly upward-only market rent reviews. The company says that the construction of a 23,161 sq ft warehouse unit will be phased over a seven month build period with funding drawn-down via monthly certified payments, which will attract an annualised coupon of 6.25% until completion. On completion of the development for a total consideration of £3.14m, including the land purchase price of £1.0m, the passing rent will be £226,551, reflecting a net initial yield of 7.21% (assuming actual purchaser’s costs).
Both purchases were funded from the Company’s existing credit facilities, with net borrowings following the acquisition of 17.3% loan to value.
Custodian REIT acquires Torquay property and development land in Stevenage : CREI