Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce a further property purchase.
The Company has acquired Willow Court, a 22,545 sq ft office building on Minns Business Park, one mile west of Oxford city centre and adjacent to the A34, which connects the M4 and M40. Other occupants of the business park include Oxford University Innovation, Barclays, Savills, Blake Morgan and Knights LLP.
The property comprises four floors let to RBS, Dehns, Charles Stanley, Oxentia and the Smith Institute with a weighted average unexpired lease term to first break or expiry of 4 years and an aggregate rent of £537,496 per annum, reflecting a net initial yield¹ of 6.41%.
The agreed purchase price of £7.86 million was funded from the Company’s existing debt facilities, resulting in net gearing² increasing to 24.4% 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 this office building in a proven location with a strong tenant line-up. Due to local development restrictions office supply in the vicinity has a history of high demand. The modern and recently refurbished property also has potential asset management opportunities to enhance value and extend its income profile.”
1 Passing rent divided by valuation plus estimated purchaser’s costs.
2 Gross borrowings less cash (excluding tenant rental deposits and retentions) divided by last published property portfolio value.
