REG-Custodian REIT plc Custodian REIT plc : Custodian REIT acquires pair of DFS retail warehouse assets for £9 million

Custodian Property Income ReitAnnouncement

20/07/2022 07:15

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   Custodian REIT plc (CREI)
   Custodian REIT plc : Custodian REIT acquires pair of DFS retail warehouse
   assets for £9 million

   20-Jul-2022 / 07:00 GMT/BST
   Dissemination of a Regulatory Announcement that contains inside
   information according to REGULATION (EU) No 596/2014 (MAR), transmitted by
   EQS Group.
   The issuer is solely responsible for the content of this announcement.

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                                                                 20 July 2022

    

                                        

                               Custodian REIT plc

                                        

                      (“Custodian REIT” or the “Company”)

                                        

   Custodian REIT acquires pair of DFS retail warehouse assets for £9 million

    

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

    

   The Company has acquired two retail warehouses in Measham, Leicestershire,
   and Droitwich, Worcestershire, occupying an  aggregate 40,077 sq ft.   The
   units are both let to DFS Furniture with a weighted average unexpired term
   to first break or  expiry of 8.0  years and an  aggregate passing rent  of
   £894,103 per annum, reflecting a net initial yield1 of 9.43%.

    

   The agreed purchase price  of £8.9 million was  funded from the  Company’s
   existing debt resources, increasing net  gearing2 to 23.4% loan to  value,
   which remains within the Company’s target range.

    

   Following this acquisition the Company’s diversified portfolio’s weighting
   to retail  warehouses  has increased  to  24%, with  38%  industrial,  16%
   office, 11% high street  retail and 11%  other, comprising 164  properties
   located in strong economic areas across the UK.

    

   Commenting on the acquisition,  Richard Shepherd-Cross, Managing  Director
   of Custodian  Capital  Limited  (the  Company’s  discretionary  investment
   manager), said:

    

   “These high yielding assets let on  long-term leases to a strong  covenant
   are a  great addition  to our  portfolio.  Retail  warehouses continue  to
   demonstrate their relevance  and appeal  alongside the  continued rise  of
   e-commerce, with one out of three sofas sold in the UK purchased in-store,
   while the  ‘halo’  effect of  a  physical store  supporting  local  online
   purchases is particularly strong for furniture.

    

   “The attractive entry yield  will be accretive  to dividend capacity  over
   the medium term. As bricks and mortar retail undergoes a renaissance,  and
   retail parks continue  to outperform, we  anticipate future market  rental
   growth which should mitigate some  of the acknowledged over-rent,  support
   valuations and protect long term income streams.”

    

    

   1 Passing rent divided by valuation plus assumed purchaser’s costs.

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

    

                                     -Ends-

                                        

   For further information, please contact:

    

   Custodian Capital Limited                                                 
   Richard Shepherd-Cross / Ed Moore /               Tel: +44 (0)116 240 8740
   Ian Mattioli MBE
                                                   1 www.custodiancapital.com

    

   Numis Securities Limited                             
   Nathan Brown / Hugh Jonathan Tel: +44 (0)20 7260 1000
                                       www.numiscorp.com

    

   FTI Consulting                                                       
   Richard Sunderland / Ellie Sweeney           Tel: +44 (0)20 3727 1000
                                       2 custodianreit@fticonsulting.com

    

   Notes to Editors

    

   Custodian REIT plc  is a UK  real estate investment  trust, listed on  the
   main market  of  the  London  Stock  Exchange.   Its  portfolio  comprises
   properties predominantly let to institutional grade tenants on long leases
   throughout the  UK and  is principally  characterised by  properties  with
   individual values of less than £10 million at acquisition.

    

   The Company  offers  investors the  opportunity  to access  a  diversified
   portfolio of UK commercial  real estate through  a closed-ended fund.   By
   targeting sub  £10  million lot  size,  regional properties,  the  Company
   intends to provide investors with an  attractive level of income with  the
   potential for capital growth. 

    

   Custodian Capital Limited is the  discretionary investment manager of  the
   Company. 

    

   For     more      information     visit       3 custodianreit.com      and
    4 custodiancapital.com.

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   ISIN:          GB00BJFLFT45
   Category Code: MSCH
   TIDM:          CREI
   LEI Code:      2138001BOD1J5XK1CX76
   Sequence No.:  175795
   EQS News ID:   1401435


    
   End of Announcement EQS News Service

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