27th May 2016 06:54
LONDON (Alliance News) - UK property investment company Custodian REIT PLC on Friday said it has bought a high bay distribution unit on Relay Park in Tamworth, Staffordshire for GBP4.7 million, with the unit currently let to a subsidiary of German railway company Deutsche Bahn AG.
Custodian said the unit is a 55,236 square feet space, located at junction 10 of the M42. Nearby occupiers include supermarkets J Sainsbury's PLC and Aldi, as well as logistics providers Yusen Logistics Co Ltd and XPO Logistics Inc, and floorcovering distributor Headlam Distribution.
The unit is let to Schenker Ltd, which trades as DB Schenker and is a subsidiary of Deutsche Bahn, on a lease expiring on September 27, 2017.
Custodian said the agreed purchase price was GBP4.7 million, funded from its existing debt facilities which meant its net borrowings increased to 12.7% loan to value.
"We are delighted to have secured this high quality, modern unit within the 'Golden Triangle' of UK distribution. The passing rent is GBP280,000 per annum but we forecast rent exceeding GBP345,000 in 2017, reflecting a reversionary yield of around 7.0%. This acquisition further demonstrates the relative value of sub-GBP10.0 million assets in a market where large distribution units can achieve prices reflecting yields of less than 5.0%," said Richard Shepherd-Cross, managing director of Custodian Capital Ltd, which acts as discretionary investment manager to Custodian REIT.
By Hannah Boland; [email protected]; @Hannaheboland
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