UK property investment company Custodian REIT has sold a portfolio of seven industrial properties to Investcorp for £32.6 million.
The portfolio comprises five industrial sites in Gateshead, Stockton-on-Tees, Warrington, Stone and Christchurch announced on 30 July 2021 as having unconditionally exchanged to sell, and two further industrial properties in Aberdeen and Bedford.
The portfolio has a current passing rent of £2.0 million, and a net initial yield of 5.9%.
Custodian REIT said the agreed sale price of £32.6m is £5.1m (19%) above the portfolio’s 31 March 2021 valuation, when terms of the sale were agreed, and £2.9m (10%) above the portfolio’s 30 June 2021 valuation.
“Investment demand and pricing for industrial assets are both at record levels, so we believe now is the best time to sell to capitalise on the current, favourable market dynamics to secure a significant profit. While the short-term prospects for the each of the properties in the Portfolio remain robust, over the medium term we consider them as non-core,” said Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company’s external fund manager).
“Due to a delayed completion we have already been able to re-deploy proceeds, whilst sustaining dividend cover, in higher quality assets with greater prospects for income and capital growth, better supporting the Board’s objective of increasing dividends in a sustainable way,” he added.
