UK property investment company Custodian REIT has acquired a 91,955sqft distribution facility between Glasgow and Edinburgh for £11.1m (€13m).
Custodian REIT, which targets smaller regional properties, said the property is fully let to Gist, a national distribution business, with five years remaining on the lease and three years to a break option.
This acquisition increases the industrial weighting within the company’s diversified portfolio of 165 properties to 48% by value, the London-listed company said.
Richard Shepherd-Cross, managing director of Custodian Capital, the company’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 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.”
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