Custodian REIT PLC Purchase of Property Portfolio

TIDMCREI

RNS Number : 9923K

Custodian REIT PLC

06 January 2016

The following replaces the Purchase of Property Portfolio announcement released on 5 January 2016. Reference to the Company's net borrowings following the acquisition should have read 20.7% loan to value rather than 22.2% loan to value. The amended announcement is detailed in full below.

5 January 2016

Custodian REIT plc

("Custodian REIT" or "the Company")

Purchase of Property Portfolio

Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce the acquisition of a GBP55.1 million portfolio of properties ("the Portfolio").

The Portfolio comprises four retail sites in Colchester, Guildford, Portsmouth and Winnersh, three industrial properties in Chepstow, Redditch and Warrington, and two offices in Edinburgh and West Malling, with an average lot size of GBP6.1 million. Occupiers include House of Fraser, Tesco, Reiss, Poundworld, Regus, Amco Services, Laura Ashley, H Samuel, Pets at Home and Wickes.

The Portfolio represents nine of the 11 properties in the 'Target Portfolio' described in the Company's November 2015 prospectus, with the Company having sub-sold the remaining two properties in the Target Portfolio, comprising an industrial unit in Norbiton and three shops with offices above in Richmond at prices of GBP5.8 million and GBP8.6 million respectively, reflecting a blended net initial yield of sub 5%.

The Portfolio's current passing rent of GBP3.68 million reflects a net initial yield of 6.32%, with an expected reversionary yield of 6.89%. Following acquisition of the Portfolio, the Company's average weighted unexpired lease term is 6.8 years.

The purchase price of GBP55.1 million was funded using the Company's existing cash and debt facilities, following an issue of new shares in December 2015, which raised GBP44.25 million (before costs and expenses). The Company's net borrowings following the acquisition have increased to 20.7% loan to value.

Commenting on the transaction, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company's discretionary investment manager), said:

"The Portfolio is an excellent fit with our investment strategy, comprising smaller lot size, good quality, secondary office, retail and industrial assets diversified by tenant and region. I expect this substantial addition to Custodian REIT's existing portfolio to present economies of scale and enhance returns to shareholders through the prompt deployment of proceeds from the recent share issue, improving dividend cover. The Portfolio offers medium-term income security together with the potential for a number of asset management opportunities identified during the due diligence process."

-Ends-

For further information, please contact:

 
 Custodian Capital Limited 
 Richard Shepherd-Cross / Nathan        Tel: +44 (0)116 240 
  Imlach / Ian Mattioli                                8740 
                                   www.custodiancapital.com 
 
 
 Numis Securities Limited 
 Nathan Brown / Hugh Jonathan   Tel: +44 (0)20 7260 
                                               1000 
                                  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 characterised by small lot sizes, with individual property values of less than GBP7.5 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 smaller lot size 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 and www.custodiancapital.com.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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