15th Jan 2015 10:06
LONDON (Alliance News) - Custodian REIT PLC Thursday said it has bought a 60,187 square foot industrial unit on the Language Science Park in Plymouth, bringing the total funds invested since it listed on the London Stock Exchange last March to GBP87.5 million.
The unit was is being acquired for GBP3.3 million, funded from Custodian REIT's existing facilities, with GBP17.0 million now deployed from its GBP25.0 million revolving credit facility. This brings total borrowings to GBP27.0 million.
Borrowings have increased to 14.5% loan to value, Custodian REIT said, in line with the stated investment strategy of a target gearing ratio of 25% loan to value.
In a statement, the UK property investment company said the unit comprises a manufacturing facility and the UK head office of Geocel, a subsidiary of the multi-national US paint manufacturer The Sherwin-Williams Co.
The unit is let on a reversionary lease, expiring on May 31, 2024, at a rent of GBP257,500 per annum, reflecting a net initial yield of 7.49%.
"This well-specified industrial unit has been the head office for Geocel for 25 years," Richard Shepherd-Cross, managing director of Custodian Capital Ltd, the company's external fund manager, said in a statement.
"The tenant has demonstrated a long-term commitment to the building having agreed terms to take a reversionary lease until May 2024 and to undertake significant expenditure on the fabric of the building. This will allow for their future operational developments at the site," Shepherd-Cross added.
The lease provides a fixed rental uplift in May 2020 to GBP280,000 representing rental growth of 1.57% per annum until the next rent review.
Custodian REIT shares were up 0.2% at 106.25 pence on Thursday.
By Samuel Agini; [email protected]; @samuelagini
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