Custodian REIT has sold a 22,317 sq ft hotel on Castlegate Business and Leisure Park, Dudley for GBP4.45 million, GBP0.34 million ahead of the 31 March 2016 valuation. The property is let to Premier Inn Hotels Limited on a lease expiring in 2038.
The property was part of the initial portfolio acquired on the Company’s admission to the London Stock Exchange in 2014. The Company intends to use the proceeds from the disposal to fund acquisitions better aligned to its long term investment strategy.
Commenting on the disposal, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company’s external fund manager), said: “We are delighted to have crystallised an 8.3% valuation gain, capitalising on market demand for long-term secure income and securing a price reflecting a net initial yield of 5.0%. Contrary to many open-ended property funds, a number of which have halted redemptions to allow them time to sell properties to meet their redemption obligations, this sale is part of our normal asset management activity. We expect to redeploy the sale proceeds on our committed pipeline, providing better long-term growth potential and a higher running yield to enhance shareholder returns“.
CREI : Custodian REIT sells Dudley hotel