Custodian REIT has acquired a 91,955 sq ft distribution facility situated between Glasgow and Edinburgh for £11.125m, reflecting a net initial yield of 5.25%.
The asset, which is located on the Eurocentral industrial estate, is fully let to distribution business Gist, with five years remaining on the lease and three years to a break option. It produces a passing rent of £623,160 per annum.
Richard Shepherd-Cross, managing director of Custodian Capital – the REIT’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 circa 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.”
