Custodian REIT PLC New Letting (6104D)
July 08 2016 - 2:00AM
UK Regulatory
TIDMCREI
RNS Number : 6104D
Custodian REIT PLC
08 July 2016
8 July 2016
Custodian REIT plc
("Custodian REIT" or "the Company")
New Letting
Custodian REIT (LSE: CREI), the UK property investment company,
is pleased to announce the letting of a property in its
portfolio.
The Company has let a retail unit on High Street, Colchester to
Metro Bank plc following the surrender of the existing lease, at a
passing rent of GBP200,000 subject to upward only rent reviews, on
a 25 year lease with a tenant's break option in year 15 ("the New
Letting").
The unit was acquired on 4 January 2016 as part of the Indigo
Portfolio, let to Burton/Dorothy Perkins Properties Limited on a
lease expiring on 24 June 2016, with passing rent of
GBP145,600.
The New Letting is expected to result in a valuation uplift of
circa GBP1.5 million.
Commenting on the New Letting, Richard Shepherd-Cross, Managing
Director of Custodian Capital Limited (the Company's discretionary
investment manager), said:
"We are delighted to have completed this extremely positive
asset management initiative which we identified during the Indigo
Portfolio acquisition due diligence. The New Letting delivers a
significant boost to the Company's net asset value ("NAV") whilst
improving its lease expiry profile and securing another high
quality tenant.
"The 'Brexit' vote, exacerbated by the largest Property Unit
Trusts introducing a block on redemptions, has led to a heightened
degree of uncertainty about the prospects for commercial property,
particularly in Central London. Custodian REIT's performance is
more closely linked to the underlying occupational property market
than what is happening in capital markets. I believe a lack of
supply, following many years of limited development, will continue
to put pressure on rents to grow and positively impact occupancy
rates in the diverse regional properties typical of the Custodian
REIT portfolio.
"The New Letting demonstrates our focus on enhancing cash flow
from the portfolio through careful asset management and we continue
to work closely with tenants to extend leases and remove short-term
risk from lease expiries. Following the New Letting, the portfolio
has an occupancy rate of 96.9% and a weighted average unexpired
lease term (to first break) of 6.4 years, providing long-term
stable income.
"It is our careful asset management and focus on securing rental
growth that underpin the security of the Company's dividends, which
remain fully covered by net rental income. While we can never rule
out that falling confidence in the property market might impact
NAV, we believe the medium-term picture for sustainable dividends
is secure and there remains realistic long-term potential for NAV
growth."
-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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