Leicester property investor secures £45m funding deal

Custodian REIT has agreed a new £45m debt facility with Lloyds Bank Commercial Banking’s Real Estate team in partnership with Scottish Widows.

The funding package provides £25m to fund new property acquisitions and £20m to repay existing term loans ahead of expiry.

It is the second deal Leicester-based Custodian REIT has secured with Lloyds Bank and Scottish Widows following a £20m facility secured in July 2015 – the first commercial property loan issued by the tie-up between the two arms of Lloyds Banking Group.

Custodian REIT has a portfolio of more than £300m of UK commercial property comprising 112 assets across the industrial, office and retail sectors.

It was launched in March 2014 with a £95m seed portfolio and invests exclusively in smaller lot size properties of between £2m and £7.5m in value.

Richard Shepherd-Cross, managing director of Custodian REIT, said: “The terms of this agreement support our investment strategy, which is based on long-term asset retention and efficient capital management to supply investors with an attractive level of income.

“As we have found with our original agreement with Lloyds Bank and Scottish Widows, we also have flexibility through the option to substitute properties.”

Richard Round, relationship director at Lloyds Bank Commercial Real Estate, added: “This deal showcases the versatility of the long-term funding solution we can provide in partnership with Scottish Widows. We can support not only large, single assets but also more complex and diverse portfolios such as Custodian REIT.

“We are backing a talented and ambitious management team as much as we are the strength and balance of their asset mix.”