Custodian REIT is pleased to announce a further property purchase.
The Company has acquired a 20,678 sq ft distribution unit on Access 26 Business Park, Langley Mill, located near junction 26 of the M1. Nearby occupiers include DHL, 3663 Logistics and Travis Perkins.
The unit is let to Warburtons Limited on a lease expiring on 2 December 2022. Current passing rent is £143,800 per annum reflecting a net initial yield[1] of 6.29%.
The agreed purchase price of £2.15 million was funded from the Company’s existing cash resources, resulting in net gearing[2] increasing to 17.8% 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 modern unit in a strong distribution location. There is significant demand in the Midlands for high quality units with good communication links and we expect this demand to lead to rental growth at the upcoming review in December 2017.”
1 Passing rent divided by valuation plus estimated purchasers’ costs.
2 Gross borrowings less unrestricted cash divided by last published property portfolio valuation.
