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Custodian REIT snaps up Jubilee Close retail park in Weymouth

The property investment trust said it had acquired the park, which comprises three units occupied by B&Q, Halfords and Sports Direct, for £10.8mln
B&Q store
One of the three units of the park is occupied by DIY retailer B&Q

Custodian REIT PLC (LON:CREI) has purchased Jubilee Close, a 44,844 square foot retail Park in Weymouth.

The property investment trust said it had acquired the Park, which comprises three units occupied by B&Q, Halfords and Sports Direct, for £10.8mln.

READ: Custodian REIT acquires Evesham Shopping Park

The three units have a weighted average unexpired lease term to first break or expiry of 7.8 years and an aggregate passing rent of £803,000 reflecting a net initial yield of 6.97%.

The purchase was funded by the company’s existing debt resources, resulting in a rise in net gearing to 25.5% loan to value.

Richard Shepherd-Cross, managing director of Custodian Capital Limited, the company’s discretionary investment manager, said despite the investment market’s “aversion to the retail sector”, the company believed the occupiers of the units would “continue to prosper despite challenges from online sales”.

He added that with nearly 8 years of contractual income, strong trading performances and a 7% initial yield, the property met the group’s investment criteria.

"We believe well-located retail warehouse properties which either do not compete with online retailing or are complementary, through offering easy click and collect services, will remain in demand despite the current restructuring of the retail market."

The purchase follows the acquisition of Evesham Shopping Park, a 43,000 sq ft shopping centre, in November for £14.2mln which carried a net initial yield of 6.04%.

In early trading Tuesday, Custodian's shares were up 0.2% at 115.4p.

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Custodian REIT Timeline

CN Research
January 29 2019

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