Custodian REIT acquires a 45,779 sq ft retail warehouse unit in Cromer

Custodian REIT (LSE: CREI), the UK property investment company focused on smaller lot-sizes, is pleased to announce a further property purchase. 

The Company has acquired a 45,779 sq ft retail warehouse unit in Cromer occupied by Homebase, with nearby retailers including Travis Perkins, Topps Tiles, Screwfix, Halfords and Argos.

The property is let on a lease expiring in July 2028 with a current passing rent of £300,000 per annum, reflecting a net initial yield1 of 6.29%.

The agreed purchase price of £4.5 million was funded from the Company’s existing debt 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:

“Well located retail warehouses are complementary to on-line retailing and have remained in demand during the restructuring of the retail market and the COVID-19 pandemic.  Homebase has traded well from this modern unit in Cromer’s core retail warehouse pitch and this property firmly meets our investment criteria.”

1 Passing rent divided by valuation plus assumed purchasers’ costs.

2 Gross borrowings less unrestricted cash divided by last published property portfolio valuation.