Custodian Property buys GBP11 million property portfolio

Custodian Property Income REIT PLC on Monday announced the acquisition of a property portfolio which it said will reduce net gearing.

The Leicester, England-based property investor said it is buying a £11.0 million portfolio of eight retail and industrial properties from investment vehicles managed by Lincoln Property Syndicates.

The deal is funded through the issue of 10.6 million new shares and £400,000 in cash. The fully occupied portfolio, primarily located in the East Midlands, generates annual rental income of £800,000 and has a net initial yield of 6.7%.

The firm said the acquisition will reduce net gearing by around 0.2 percentage points, keeping it close to its 25% target, and offers opportunities to improve earnings per share and dividend cover through rental growth.

"We have been consistent in our ambition to scale the business and grow earnings through strategic portfolio acquisitions and disciplined consolidation. This latest transaction underscores the momentum we are building with a strategy and demonstrates precisely how our listed status and smaller-lot-size investment focus enable us to offer a genuine structural solution to syndicated property investors or owners of family portfolios seeking liquidity or simplification of their holdings," said Richard Shepherd-Cross, managing director of Custodian Capital Ltd, the company's investment manager.

Custodian Property shares were 0.8% higher at 83.70 pence each on Monday morning in London.

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