Custodian REIT is pleased to announce a further property purchase.
The Company has acquired a 69,922 sq ft distribution unit on Eurocentral, Scotland’s leading mixed-use business park on the M8 arterial route between Glasgow and Edinburgh. Nearby occupiers include DHL, Warburtons, Argos, Wincanton, Norbert Dentressangle and Morrisons.
The unit is let to Next plc on a lease expiring on 6 March 2019. Current passing rent is £349,850 per annum reflecting a net initial yield[1] of 6.91%, with an expected reversionary yield of circa 7.9%.
The agreed purchase price of £4.75 million was funded from the Company’s existing cash resources, resulting in net gearing[2] increasing to 18.6% loan to value.
Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company’s discretionary investment manager), said:
“We are delighted to have secured this unit located on Scotland’s prime distribution park and let to a market leading high street retailer. The unit is Next’s only distribution location in Scotland, which has undergone substantial fit out including the installation of a mezzanine floor at the tenant’s expense. The site also provides scope for future expansion of the unit should it be required.”
1 Passing rent divided by purchase price plus assumed purchasers’ costs.
2 Gross borrowings less unrestricted cash divided by last published property portfolio valuation.
