The FTSE-listed REIT has acquired a portfolio comprising of 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 £6.1m. The portfolios boasts a range of occupiers including House of Fraser, H Samuel, Laura Ashley, Pets at Home, Poundworld, Reiss, Regus, Tesco and Wickes.
The purchase price of £55.1m was funded using Custodian’s existing cash and debt facilities, following an issue of new shares in December 2015, which raised £44.25m.
The DWF team, led by real estate partner Jim Speed with support from real estate colleagues in the Birmingham, Glasgow, Manchester and Newcastle offices and additional support from the Leeds employment and tax teams, advised Custodian on the UK-wide transaction.
Jim Speed, real estate partner said: “It was great to support Custodian on their most significant transaction to date that further enhances its real estate investment portfolio and delivers key potential for stakeholders.
“Turning around a portfolio acquisition of this magnitude in little over two weeks demonstrates the strength and depth of our national real estate team. Our leading retail and commercial property expertise combined with geographical reach, ensures we are well placed to fully support Custodian on deals such as this.”
Commenting on the transaction, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited and 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.”