Custodian REIT (LSE: CREI), has acquired 16,470 sq ft office in Cheadle, currently let to Wienerberger Limited with an unexpired lease term of 2.1 years.
The Cheadle Royal property formed part of an investment portfolio that also included 25,471 sq ft office on Pegasus Business Park, Castle Donington, let to National Grid plc with an unexpired lease term of 6.2 years and a119,600 sq ft industrial unit in Wolverhampton, four miles from Junction 1 of the M54, let to Assa Abloy Limited with an unexpired lease term of 2.1 years.
The Portfolio’s current passing rent of £0.99 million reflects a net initial yield of 8.04%, with an expected reversionary yield of 9.63%.
The purchase price of £11.5 million was funded from the Company’s cash resources, following the drawdown of a new £45 million term loan on 6 June 2016.
Commenting on the transaction, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company’s discretionary investment manager), said: “We are very pleased to have secured the Portfolio which is well aligned to our investment strategy, comprising good quality, smaller lot size, regional office and industrial assets. The properties are single let and occupied by strong tenants that are committed to the locations. The Portfolio also offers the potential for proactive asset management, with a number of opportunities identified and explored with stakeholders during the due diligence process.”
Custodian REIT plc is a UK real estate investment trust offering investors the opportunity to access a diversified portfolio of UK commercial real estate through a closed-ended fund.