Aviva Investors Real Estate Finance has provided a new term loan facility of £50 million to Custodian REIT comprising tranches of £35 million (“Tranche 1”) and £15 million (“Tranche 2) repayable 15 years from the date of drawdown, with a maximum LTV of 50%.
Custodian REIT has cash and undrawn facilities of £78 million available to deploy, which will be used to acquire £14.1 million of properties currently under offer and in solicitors’ hands (“the Pipeline Properties”), with the balance expected to be significantly invested in other commercial properties within a period of three to six months.
Gregor Bamert, Head of Real Estate Finance said
“We are delighted to have been able to support Custodian REIT’s requirements of a flexible debt structure which combined the attractive pricing currently available for long term debt with the ability to manage their granular portfolio in an active fashion. We look forward to being a long term partner with Custodian REIT starting with this transaction.”
Commenting on completion of the New Loan, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company’s discretionary investment manager), said:
“With interest rates continuing to be significantly below their historical average, we have taken the opportunity to reduce the Company’s exposure to interest rate risk, while increasing debt capacity, lengthening the debt expiry profile and maintaining the weighted average cost of debt at 3.1% per annum. The flexibility to repay the RCF and manage the facility limit to minimise non-utilisation fees further demonstrates the efficiency of the Company’s debt structure.
“In addition to the Pipeline Properties, we are seeing an increasing number of acquisition opportunities within our target lot size and are tracking circa £40 million of further opportunities that fit our investment objectives.”