Custodian REIT plc : Acquisition of Property Portfolio (884173)
October 02 2019 - 3:22AM
UK Regulatory
Custodian REIT plc (CREI)
Custodian REIT plc : Acquisition of Property Portfolio
02-Oct-2019 / 08:22 GMT/BST
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
2 October 2019
Custodian REIT plc
("Custodian REIT" or "the Company")
Acquisition of Property Portfolio
Custodian REIT (LSE: CREI), the UK property investment company, is pleased
to announce the acquisition of a GBP24.65 million portfolio of properties
("the Portfolio") via a sale and leaseback transaction with Menzies
Distribution Limited ("MDL").
The Portfolio
The Portfolio comprises eight 'last mile' distribution units spread
throughout the UK with a passing rent of GBP1.61 million, reflecting a net
initial yield of 6.4%1. The Portfolio's weighted average unexpired lease
term to first break or expiry ("WAULT") is 8.8 years.
The Company acquired the Portfolio by purchasing the entire issued share
capital of John Menzies Property 4 Limited which owns the Portfolio. All
eight properties are let on new 10 year leases with only one unit having a
second-year break option. The leases provide for a 13.1% fixed rental uplift
at year five. The Portfolio is let to MDL, one of the UK's leading print
media logistics companies, servicing 1,700 routes per day from over 50 sites
across the UK and Ireland. The acquisition was funded using the Company's
existing debt facilities, increasing the Company's borrowings to 23.2%
loan-to-value2.
Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of
Custodian Capital Limited (the Company's discretionary investment manager),
said:
"The Portfolio is strongly aligned to Custodian REIT's investment strategy
and complementary to its existing property portfolio. The pricing advantage
of pursuing a smaller lot size, regional strategy is evident when compared
with pricing in the highly competitive market for logistics assets. This
acquisition enhances the WAULT of the Company's property portfolio,
supplements regional diversification and additionally provides secure cash
flow with the certainty of fixed rental uplifts in 2024.
"Following this transaction, MDL will become Custodian REIT's largest
tenant, but still representing only 3.9% of the rent roll. No one property
in the Portfolio will account for more than 0.7% of the Company's rent roll,
supporting the continued drive to mitigate risk through diversification and
stock selection. We are very pleased to enter into a long term relationship
with MDL, a dynamic company offering a strong tenant covenant.
"The corporate transaction offered compelling economic benefits for the
Company and the vendor, compared to the Company acquiring the properties
directly, demonstrating our commitment to enhance shareholder value and
secure economies of scale through growth in the fund."
1 Passing rent divided by purchase price plus purchaser's costs.
2 Gross borrowings less unrestricted cash divided by last published property
portfolio valuation.
-Ends-
For further information, please contact:
Custodian Capital
Limited
Richard Shepherd-Cross / Nathan Imlach / Tel: +44 (0)116 240
Ian Mattioli MBE 8740
www.custodiancapital.com [1]
Numis Securities Limited
Hugh Jonathan / Nathan Brown Tel: +44 (0)20 7260 1000
www.numiscorp.com
Notes to Editors
Custodian REIT plc is a UK real estate investment trust, which listed on the
main market of the London Stock Exchange on 26 March 2014. Its portfolio
comprises properties predominantly let to institutional grade tenants on
long leases throughout the UK and is principally characterised by properties
with individual values of less than GBP10 million at acquisition.
The Company offers investors the opportunity to access a diversified
portfolio of UK commercial real estate through a closed-ended fund. By
targeting sub GBP10 million lot size, regional properties, the Company 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.
For more information visit www.custodianreit.com [2] and
www.custodiancapital.com [1].
ISIN: GB00BJFLFT45
Category Code: MSCH
TIDM: CREI
LEI Code: 2138001BOD1J5XK1CX76
OAM Categories: 3.1. Additional regulated information required to be
disclosed under the laws of a Member State
Sequence No.: 22089
EQS News ID: 884173
End of Announcement EQS News Service
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