26th Jan 2015 08:53
LONDON (Alliance News) - Custodian REIT PLC Monday said it has bought an industrial unit in Milton Keynes for GBP2.1 million, meaning it has now invested GBP89.6 million of funds since its lasting in March last year, while it has also fully drawn down a second term loan with Lloyds Bank.
In a statement, the real estate investment trust said it has bought a 44,192 square foot industrial unit on the Tilbrook Industrial Estate in Milton Keynes, immediately opposite the 52,532 square foot unit it bought on the same estate last month.
The unit is let to Domino's Pizza Group Ltd on a lease that expires on November 10, with current passing rent of GBP250,000 a year, reflecting a net initial yield of 11.25%. Dominos has confirmed it intends to vacate the property at lease expiry, Custodian REIT said.
"Having recently acquired an adjacent property on the Tilbrook Industrial Estate we are aware of the high demand for property in this location and took the opportunity to enhance our ownership on the estate in a competitively priced deal. Dominos intend to vacate the unit at lease expiry, following which we will undertake a comprehensive refurbishment and take advantage of what is expected to be a strong occupier market when re-letting in 2016," Richard Shepherd-Cross, managing director of Custodian Capital Ltd, the company's external fund manager, said in a statement.
Custodian also said it had taken out a second term loan of GBP10 million with Lloyds Bank last week, and had fully drawn it. Under the terms of this facility, Custodian will pay annual interest of 1.9% above three-month libor. The loan is repayable on October 10, 2019.
The latest industrial unit acquisition was funded from the company's debt facilities. It said it has now used GBP8.7 million from its credit facility on top of the GBP20 million of term debt. Its total net borrowings have increased to 15.2% loan to value.
Custodian REIT shares were down 0.5% at 105.50 pence early Monday.
By Steve McGrath; [email protected]; @stevemcgrath1
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