21st Dec 2015 11:49
LONDON (Alliance News) - Custodian REIT PLC on Monday said it has acquired four freehold units occupied by Pizza Hut, Mecca Bingo, Odeon Cinemas and MFA Bowl, in the form of the 55,713 square foot Phoenix Leisure Park in Crewe, north west England, for GBP6.6 million in cash.
The park is near Grand Junction Retail Park and within walking distance of the town centre and railway station.
The units' leases expire between June 2030 and March 2040 with a total passing rent of GBP523,625 per annum, reflecting a net initial yield of 7.50%.
Funding was already in place thanks to a GBP44.3 million equity fundraising by Custodian REIT earlier this month.
The real estate investment trust has GBP40.0 million of term debt and an undrawn GBP35.0 million revolving credit facility, with net gearing of 5.8% following the purchase.
With the upcoming completion of a purchase of 11 UK commercial properties for a total of about GBP69.4 million set for January 2016, the company expects its net borrowings to increase towards its targeted 25% loan to value ratio.
"We are delighted to have secured this recently refurbished restaurant and leisure park that adds further long-term income to the company's portfolio at a price which demonstrates the value of small lot size regional property," said Richard Shepherd-Cross, managing director of Custodian Capital Ltd, the company's investment manager.
"Crewe is dominated by two established out of town parks, Phoenix Leisure Park and Grand Junction. A McDonald's restaurant and Hungry Horse public house have recently opened in the vicinity, which further establish the location," Shepherd-Cross added.
Shares in Custodian REIT were up 1.9% at 107.75 pence on Monday morning.
By Samuel Agini; [email protected]; @samuelagini
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