Custodian REIT buys Superdrug in Worcester – Custodian REIT has acquired a high street retail unit in Worcester let to Superdrug Stores plc. The property comprises a ground floor sales unit with upper floor ancillary accommodation, located in the prime retail pitch of High Street. Nearby shops include Boots, Marks & Spencer, Debenhams, TK Maxx, and Paperchase.
The tenant’s lease expires on 24 March 2027 with a current passing rent of GBP384,270 per annum, reflecting a net initial yield([1]) of 6.50%.
The agreed purchase price of GBP5.54m was funded from the Company’s existing cash resources, resulting in net gearing([2]) increasing to 20.4% loan to value.
Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company’s discretionary investment manager), said: “Prime retail in strong city centre locations can show good value in the current market. Worcester city centre offers the dominant retail in an affluent catchment area and Superdrug appear committed to the location. The unexpired lease term of over nine years adds secure income to the portfolio and the upper floors, though currently demised to the tenant, provide an opportunity to drive additional future value.”
- Passing rent divided by valuation plus assumed purchasers’ costs.
- Gross borrowings less unrestricted cash divided by last published property portfolio valuation.
CREI : Custodian REIT buys Superdrug in Worcester