Custodian REIT has announced that it has acquired a portfolio of nine properties for £55.1m. The Portfolio comprises four retail sites in Colchester, Guildford, Portsmouth and Winnersh, three industrial properties in Chepstow, Redditch and Warrington, and two offices in Edinburgh and West Malling. The average lot size is £6.1m and the occupiers include House of Fraser, Tesco, Reiss, Poundworld, Regus, Amco Services, Laura Ashley, H Samuel, Pets at Home and Wickes. The company says that the Portfolio represents nine of the 11 properties in the ‘Target Portfolio’ described in the Company’s November 2015 prospectus, with the Company having already sub-sold the remaining two properties. These are an industrial unit in Norbiton (sold for £5.8m) and three shops with offices above in Richmond (sold for £8.6m), reflecting a blended net initial yield of sub 5%.
The company says that the remaining portfolio’s current passing rent of £3.68m reflects a net initial yield of 6.32%, with an expected reversionary yield of 6.89%. Following the acquisition, the Company’s average weighted unexpired lease term is 6.8 years. The purchase was funded using the Company’s existing cash and debt facilities, following an issue of new shares in December 2015, which raised £44.25 million (before costs and expenses). The Company’s net borrowings following the acquisition have increased its loan to value to 22.2%. Management say that the acquisition reflects a strategy to acquire smaller lot size, good quality, secondary office, retail and industrial assets that are diversified by tenant and region.
Custodian REIT acquires property portfolio for £55.1m : CREI