Custodian slims portfolio with £30m of disposals

Custodian Property Income REIT has sold two industrial sites in Warrington, Cheshire, and Weybridge, Surrey, taking its total sales since the beginning of the year to almost £30m. The REIT said it now had four assets under offer including a vacant former car dealership in Redhill, Surrey, and a vacant office in Castle Donnington, Leicestershire. Collectively the four assets are under offer for £19.5m, representing a premium of 29% to their 31 December 2023 valuation of £15m. The disposals are scheduled to complete during the next two months. Proceeds will be used to reduce debt. Custodian has already announced the sale of an industrial unit in Milton Keynes and an office building in Derby for a combined £10.1m, taking its total disposal number to £29.6m so far this calendar year.  Richard Shepherd-Cross, managing director at Custodian Capital, the REIT’s external fund manager, said: “The successful completion of these sales would be significantly accretive to annual recurring earnings, adding around 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 around 6.9%, and so be supportive of paying a fully covered dividend in line with the company’s policy and practice since IPO.”  Shepherd-Cross added that the disposals would also have a positive effect on NAV adding 1%, while reducing the company’s LTV from 30.6% to 27.5%. “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,” he said. “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.”