Custodian REIT acquires St Nicholas Gate Retail Park in Carlisle

Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce a further purchase of property.

The Company has acquired St Nicholas Gate Retail Park in Carlisle, comprising six retail warehouse units totalling 73,690 sq ft with a 434 parking spaces and the reversionary interest in a 34,750 sq ft Asda supermarket. The park is within a mile of the city centre and two miles from the M6, prominently positioned on the busy A6, with occupiers including Asda, Halfords, Oak Furniture Land, Iceland, B&M and Poundland. Nearby retailers include B&Q, Pets at Home, Laura Ashley and Matalan.

The properties have a weighted average unexpired lease term to first break or expiry of 8.4 years and total passing rent of £889,718 per annum, reflecting a net initial yield¹ of 6.89%.

The agreed aggregate purchase price of £12.1 million was funded from the Company’s existing cash resources, resulting in net gearing² increasing to 21.1% 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 pleased to have acquired these properties in one of Carlisle’s dominant out-of-town retail locations. The acquisition includes the freehold interest in an Asda supermarket which reverts to the Company in 2038. We expect to witness strong valuation growth in this interest as the headlease shortens. Planning permission has been obtained for two additional units which could drive further valuation growth.”

¹ Portfolio passing rent divided by portfolio valuation plus estimated purchaser’s costs.
² Gross borrowings less unrestricted cash divided by last published property portfolio valuation.