Property investor snaps up £11m distribution facility

Custodian REIT, the listed Leicester property investment company, has acquired a 91,955 sq ft distribution facility for £11.125m.

The purchase of the property, located on the Eurocentral industrial estate at Junction 7 of the M8 between Glasgow and Edinburgh, has been funded from the firm’s existing debt facilities.

The unit is fully let to national distribution firm Gist, with five years remaining on the lease, at a rent of £623,160 per annum.

Richard Shepherd-Cross, managing director of Custodian Capital Limited, the company’s discretionary investment manager, said: “This well located, modern industrial asset has been acquired off-market at an attractive net initial yield of 5.25%. We see scope to significantly increase the rental intake of this conservatively let asset based on recent local comparables combined with strong occupational demand, meaning we expect the reversionary yield on purchase price to move towards c. 7%.

“This purchase highlights the yield advantage offered by the Company’s smaller regional property strategy of acquiring strong and secure assets with the potential for future income and valuation growth.”