Custodian REIT has acquired a 47,882ft² industrial facility which is fully let to Container Components Limited with 20 years remaining on the lease for €4m (£3.5m). The property produces an index-linked passing rent of €268,107 (£227,440) per annum, reflecting a net initial yield of 6.10%, and is located two miles from junction 29 of the M1 near Chesterfield, Derbyshire. The acquisition was funded from the company’s existing debt facilities, increasing net gearing to 23.8% loan to value.
The deal increases the industrial weighting within the company's highly diversified portfolio of 165 properties to 38%, with the balance comprising 24% retail warehouse, 16% office, 11% high street retail, and 11% other, all of which are in strong economic areas across the UK.
Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited, said: “This well located, modern industrial asset has been acquired at an entry yield of 6.10% which is significantly above the market average for industrial assets. The property also benefits from five-yearly index-linked rental increases which provide long-term inflation-adjusted income. The acquisition demonstrates our continued ability to source high-quality assets on behalf of our shareholders which offer enhanced but secure income returns by focussing on smaller-sized properties where there is reduced competition.”
