Custodian REIT has announced that it has acquired a 77,242 square foot health and fitness centre in Lincoln, located on the A46 within a mixed use, out-of-town scheme. Businesses in the immediate vicinity include Ibis Hotel, Fayre & Square and Frankie & Benny’s. The agreed purchase price of £4.3m was funded from the Company’s existing debt resources, resulting in net gearing increasing to 22.4% loan to value.
Total Fitness until 2040
The Lincoln unit is let to Total Fitness Health Clubs Limited on a lease expiring on 22 June 2040, subject to a tenant-only break on 22 June 2035. Current passing rent is £350,000 per annum reflecting a net initial yield1 of 7.64%.
Recent extensive refurbishment
Richard Shepherd-Cross, Managing Director of Custodian Capital Limited says, “We are delighted to have acquired this high specification, purpose-built health and fitness centre in an established and prominent location with an unexpired lease term to first break of 17 years. The tenant has recently undertaken an extensive internal refurbishment, highlighting its confidence in the continued performance of the location.”
About Custodian REIT
Custodian REIT is a UK real estate investment trust, which listed on the main market of the London Stock Exchange on 26 March 2014. It says that its portfolio comprises properties predominantly let to institutional grade tenants on long leases throughout the UK and is characterised by small lot sizes, with individual property values of less than £10 million at acquisition.
The Company describes itself as offering investors the opportunity to access a diversified portfolio of UK commercial real estate through a closed-ended fund. It says that, by targeting smaller lot size properties, it intends to provide investors with an attractive level of income with the potential for capital growth.
Custodian Capital Limited is the discretionary investment manager of the Company.
Custodian REIT acquires Lincoln fitness centre : CREI