Custodian REIT has bought a group of mixed-use properties for £55.1m.
The properties comprise four retail sites in Colchester, Guildford, Portsmouth and Winnersh, three industrial properties in Chepstow, Redditch and Warrington, and two offices in Edinburgh and West Malling.
The average asset value is £6.1m. Occupiers include House of Fraser, Tesco, Reiss, Amco Services, and Wickes.
The deal is for nine of the 11 properties in the Target portfolio. Custodian sold the remaining two assets – an industrial unit in Norbiton, Surrey and three shops with offices above in Richmond, Surrey – for £5.8m and £8.6m respectively.
Passing rent for the portfolio is £3.7m, reflecting a net initial yield of 6.3%.
The acquisition was funded using existing cash and debt facilities following an issue of new shares in December 2015, which raised £44.3m before costs and expenses.
Richard Shepherd-Cross, managing director of Custodian Capital, said: “I expect this substantial addition to Custodian REIT’s existing portfolio to present economies of scale and enhance returns to shareholders through the prompt deployment of proceeds from the recent share issue, improving dividend cover.
“The portfolio offers medium-term income security and the potential for a number of asset management opportunities.”
