Custodian Property Income REIT has agreed terms on the sale of two industrial units in Warrington and Weybridge.
The REIT said that the two units – in addition to a former car dealership in Redhill and a vacant office in Castle Donington – are under offer to sell for £19.5m, reflecting a premium of 29% to their 31 December 2023 aggregate valuation of £15m.
Custodian said the sale of the assets are due to complete in the next two months and the proceeds will be used to reduce variable rate borrowing.
Richard Shepherd-Cross, managing director of Custodian Capital – the company’s external fund manager – said: “The successful completion of these sales would be significantly accretive to annual recurring earnings, adding circa 5% on a pro-forma basis for the 12 month period to 31 December 2023, by using expected sale proceeds to pay down variable rate debt with a current all-in interest rate of circa 6.9%, and so be supportive of paying a fully covered dividend in line with the company’s policy and practice since IPO.
“These disposals would also have a positive effect on NAV adding circa 1%, while improving the company’s debt position by reducing LTV from 30.6% to 27.5%, as well as increasing occupancy from 91% to 93%, each on a pro-forma basis as at 31 December 2023.
“These sales also demonstrate our ability to leverage our asset and portfolio management expertise, and highlight the benefits of the company’s diversified investment strategy. This allows us to undertake both sales and acquisitions across all sectors where we see opportunities to optimise shareholder value, without the confines of being beholden to the head or tail winds of any single sector at a specific point in time.”
