Custodian REIT plc : Acquisition of Property Portfolio (884173)

 
 Custodian REIT plc (CREI) 
Custodian REIT plc : Acquisition of Property Portfolio 
 
02-Oct-2019 / 08:22 GMT/BST 
Dissemination of a Regulatory Announcement that contains inside information 
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
            2 October 2019 
 
      Custodian REIT plc 
 
      ("Custodian REIT" or "the Company") 
 
      Acquisition of Property Portfolio 
 
  Custodian REIT (LSE: CREI), the UK property investment company, is pleased 
     to announce the acquisition of a GBP24.65 million portfolio of properties 
         ("the Portfolio") via a sale and leaseback transaction with Menzies 
            Distribution Limited ("MDL"). 
 
            The Portfolio 
 
         The Portfolio comprises eight 'last mile' distribution units spread 
    throughout the UK with a passing rent of GBP1.61 million, reflecting a net 
    initial yield of 6.4%1. The Portfolio's weighted average unexpired lease 
            term to first break or expiry ("WAULT") is 8.8 years. 
 
    The Company acquired the Portfolio by purchasing the entire issued share 
    capital of John Menzies Property 4 Limited which owns the Portfolio. All 
  eight properties are let on new 10 year leases with only one unit having a 
second-year break option. The leases provide for a 13.1% fixed rental uplift 
    at year five. The Portfolio is let to MDL, one of the UK's leading print 
media logistics companies, servicing 1,700 routes per day from over 50 sites 
   across the UK and Ireland. The acquisition was funded using the Company's 
      existing debt facilities, increasing the Company's borrowings to 23.2% 
            loan-to-value2. 
 
 Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of 
 Custodian Capital Limited (the Company's discretionary investment manager), 
            said: 
 
  "The Portfolio is strongly aligned to Custodian REIT's investment strategy 
 and complementary to its existing property portfolio. The pricing advantage 
  of pursuing a smaller lot size, regional strategy is evident when compared 
    with pricing in the highly competitive market for logistics assets. This 
         acquisition enhances the WAULT of the Company's property portfolio, 
  supplements regional diversification and additionally provides secure cash 
            flow with the certainty of fixed rental uplifts in 2024. 
 
       "Following this transaction, MDL will become Custodian REIT's largest 
  tenant, but still representing only 3.9% of the rent roll. No one property 
in the Portfolio will account for more than 0.7% of the Company's rent roll, 
 supporting the continued drive to mitigate risk through diversification and 
 stock selection. We are very pleased to enter into a long term relationship 
            with MDL, a dynamic company offering a strong tenant covenant. 
 
     "The corporate transaction offered compelling economic benefits for the 
    Company and the vendor, compared to the Company acquiring the properties 
     directly, demonstrating our commitment to enhance shareholder value and 
            secure economies of scale through growth in the fund." 
 
            1 Passing rent divided by purchase price plus purchaser's costs. 
 
2 Gross borrowings less unrestricted cash divided by last published property 
            portfolio valuation. 
 
      -Ends- 
 
For further information, please contact: 
 
   Custodian Capital 
             Limited 
Richard Shepherd-Cross / Nathan Imlach /     Tel: [phone] 
Ian Mattioli MBE                                            8740 
                                    www.custodiancapital.com [1] 
 
Numis Securities Limited 
Hugh Jonathan / Nathan Brown Tel: [phone] 
                                    www.numiscorp.com 
 
            Notes to Editors 
 
Custodian REIT plc is a UK real estate investment trust, which listed on the 
    main market of the London Stock Exchange on 26 March 2014. Its portfolio 
    comprises properties predominantly let to institutional grade tenants on 
long leases throughout the UK and is principally characterised by properties 
             with individual values of less than GBP10 million at acquisition. 
 
        The Company offers investors the opportunity to access a diversified 
      portfolio of UK commercial real estate through a closed-ended fund. By 
targeting sub GBP10 million lot size, regional properties, the Company intends 
  to provide investors with an attractive level of income with the potential 
            for capital growth. 
 
    Custodian Capital Limited is the discretionary investment manager of the 
            Company. 
 
            For more information visit www.custodianreit.com [2] and 
            www.custodiancapital.com [1]. 
 
ISIN:           GB00BJFLFT45 
Category Code:  MSCH 
TIDM:           CREI 
LEI Code:       2138001BOD1J5XK1CX76 
OAM Categories: 3.1. Additional regulated information required to be 
                disclosed under the laws of a Member State 
Sequence No.:   22089 
EQS News ID:    884173 
 
End of Announcement EQS News Service 
 
 
1: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=c24dec6d0ea6c746569ddd52de0eca8d&application_id=884173&site_id=vwd&application_name=news 
2: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=44eae66ce326b2005a19503bbab5faed&application_id=884173&site_id=vwd&application_name=news 
 

(END) Dow Jones Newswires

October 02, 2019 03:22 ET (07:22 GMT)