Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce a property purchase.
The Company has acquired two drive-through restaurants on Clifton Moor Retail Park, York, adjacent to York’s northern bypass which connects to both the A1(M) and M62. The units are occupied by Burger King and KFC franchisees with a weighted average unexpired term to first break or expiry of 9.7 years.
The units have an aggregate passing rent of £163,250 per annum, reflecting a net initial yield1 of 5.07%.
The agreed purchase price of £3.025 million was funded from the Company’s existing debt facilities, moving net gearing2 to 22.5% 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 secured these modern assets on the foremost retail and leisure destination in North Yorkshire. The drive through sector continues to show considerable growth which we believe will drive rents over the medium term resulting in an increasingly attractive yield.”
1 Passing rent divided by purchase price plus assumed purchaser’s costs.
2 Gross borrowings less cash (excluding tenant rental deposits and retentions) divided by last published property portfolio valuation.