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Custodian bags £25mln property in leaseback deal

The UK property investor has a new largest tenant for its property portfolio, which stood at £568mln in June

Custodian REIT -

UK property investor Custodian REIT PLC (LON:CREI) has broadened its portfolio with the acquisition of eight properties from Menzies Distribution Limited (MDL) for £24.7mln.

MDL will become the REIT’s largest tenant through the sale-and-leaseback deal.

READ: Custodian REIT sells Edinburgh property in search for better prospects

The eight 'last mile' distribution properties have a passing rent of £1.61mln and are being leased back to MDL for 10 years.

Richard Shepherd-Cross, the portfolio manager, said the leaseback gave the property group a “strong tenant covenant” representing 3.9% of the rent roll.

Custodian specialises in smaller property units and Shepherd-Cross said the acquisition will help to regionally diversify Custodian’s portfolio and provide secure cash flow with the certainty of rent hikes in 2024.

Quick facts: Custodian REIT

Price: 115.4 GBX

LSE:CREI
Market: LSE
Market Cap: £475.51 m
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