Custodian REIT has sold a 73,367 sq ft shopping centre in Gosforth to an unnamed buyer for £9.3m. The REIT acquired the centre when it bought DRUM Income Plus REIT in November 2021 and the selling price reflects a 3.5% premium to the £8.975m apportioned value of the asset at that time, according to Custodian.
Following the acquisition of the centre the REIT undertook a number of asset management activities, increasing occupancy from 93.6% to 95.7% and grew the annual rent roll by £78,000 – an increase of 8.5%.
Richard Shepherd-Cross, managing director of Custodian Capital, the REIT’s external fund manager, said: “Shopping centres as a sector have not performed well since the Covid-19 pandemic and do not fit comfortably within our investment objectives of selecting high quality, well located regional properties in areas where future rental growth is underpinned by strong supply/demand fundamentals.
“The asset management work completed since acquisition and the accretive terms of the DRUM Income Plus REIT purchase have allowed us to achieve a profitable sale despite current market uncertainty. This disposal provides additional capital for our programme of improving assets we feel will better capture tenant demand over the long term as well as enhancing their environmental credentials.”
