26 July 2022

Custodian REIT plc

 (“Custodian REIT” or the “Company”)

Custodian REIT acquires high-yielding long lease industrial asset

Custodian REIT (LSE: CREI), the UK property investment company focused on smaller lot-sizes, is pleased to announce that it has acquired a 47,882 sq ft industrial facility which is fully let to Container Components Limited with 20 years remaining on the lease for £3.5 million. The property produces an index linked passing rent of £227,440 per annum, reflecting a net initial yield1 of 6.10%, and is located two miles from junction 29 of the M1 near Chesterfield, Derbyshire. 

The acquisition was funded from the Company’s existing debt facilities, increasing net gearing2 to 23.8% loan to value, which remains within the Company’s target range.

This acquisition increases the industrial weighting within the Company’s highly diversified portfolio of 165 properties to 38%, with the balance comprising 24% retail warehouse, 16% office, 11% high street retail and 11% other, all of which are in strong economic areas across the UK.

Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company’s discretionary investment manager), said:  “This well located, modern industrial asset has been acquired at an entry yield of 6.10% which is significantly above the market average for industrial assets.  The property also benefits from five-yearly index linked rental increases which provide long-term inflation-adjusted income.  The acquisition demonstrates our continued ability to source high quality assets on behalf of our shareholders which offer enhanced but secure income returns by focussing on smaller sized properties where there is reduced competition.”

1 Reversionary rent divided by purchase price plus assumed purchasers’ costs.

2 Gross borrowings less cash (excluding tenant rental deposits and retentions) divided by last published property portfolio valuation.

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Notes to Editors

Custodian REIT plc is a UK real estate investment trust, listed on the main market of the London Stock Exchange.  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 £10 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 smaller lot size 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. 

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