A property investment company has sold some of its retail properties.
Custodian REIT said it had sold the four properties at auction in Chester, Scarborough, Bedford and Llandudno for an aggregate £1.6 million – which it said was in line with the most recent valuations.
The Leicester headquartered company said the properties were originally acquired as part of larger portfolios in 2014 and 2015.
It said the Chester unit was currently vacant, the Scarborough and Bedford units are let on three-month rolling leases at below market rents, and the Llandudno unit was “significantly over-rented” with expiry in May, 2022.
The disposals have reduced the company’s high street retail sector weighting from 11 per cent to 10 per cent.
Last year it made profits after tax of £2.1 million on a portfolio valued at close to £560 million.
Earlier this month the business bought a 22,500 sq ft office building in Minns Business Park, one mile west of Oxford, for £7.86 million.
The floor storey building is let to RBS, Dehns, Charles Stanley, Oxentia and the Smith Institute.
Commenting on the retail disposals, Richard Shepherd-Cross, managing director of Custodian Capital – the company’s external fund manager – said: “These assets were not aligned with the strategy of the company as we did not anticipate future rental growth.
“We have already invested the sale proceeds 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.”
Custodian REIT was created by Leicester-based wealth management specialist Mattioli Woods, and floated on the stock market in March 2014.
It has a portfolio comprising properties predominantly let to institutional grade tenants, generally valued at less than £10 million at acquisition.
By targeting regional properties of less than £10 million, it tries provide investors with an “attractive level of income and the potential for capital growth”, becoming the “REIT of choice for private and institutional investors seeking high and stable dividends from well-diversified Ƶ real estate”.
