Custodian REIT is pleased to announce a further property purchase.
The Company has acquired a 24,230 sq ft health and fitness centre in Salisbury, located less than two miles from the city centre and prominently fronting on to the A30, the main arterial road into the city from the North. Adjacent businesses include Premier Inn, Handelsbanken, Busy Bees nursery and a BMW/Mini dealership.
The unit is let to Parkwood Health & Fitness Limited on a lease expiring on 2 March 2031, with current passing rent of £200,000 per annum reflecting a net initial yield1 of 6.75%.
The agreed purchase price of £2.785 million was funded from the Company’s existing cash resources, resulting in net gearing2 increasing to 20.5% 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 acquired this high specification, purpose-built health and fitness centre in an established and prominent location with 14 years remaining on the lease. This property adds further diversification to the portfolio by increasing exposure to the alternative sector, and its prominent position lends itself to alternative uses in the event of a future vacancy.”
1 Portfolio passing rent divided by portfolio valuation plus estimated purchasers’ costs.
2 Gross borrowings less unrestricted cash divided by last published property portfolio valuation.