Real Estate Investors plc (REI), the Birmingham-based property group, headed by chief executive Paul Bassi, has completed nearly £25 million in deals in the past few weeks.
The company has acquired five new investment properties for a total of £24,025,000 plus vacant properties of £925,000.
The investment properties include 40 St Paul’s Square, Birmingham, a prime office investment in the Jewellery Quarter which is home to tenants including Willis Group, ISG Regions, BHP Design, OLR (UK) Ltd and Coltham Development, producing an annual rental of £399,824.
Bearwood Shopping Centre is a prominent retail investment comprising a large food store and nine retail units with a 120 vehicle surface car park.
Tenants include Aldi Stores, Poundland, Greggs plc, Scrivens Ltd, Sportswift Ltd, Lloyds Pharmacy Ltd and Store Twenty One, producing a current annual rental of £685,650.
Virginia House, Worcester, is a well located multi-let office within the centre of the city, producing £132,900 per annum, with an estimated rental value (ERV) of £184,000 per annum. Tenants include 3AAA Ltd, CAFCASS, Worcester College of Technology, Remploy Ltd and Wheelchair Basketball Association.
REI has also acquired 1062-1104 Warwick Road, Acocks Green, a busy shopping parade within an expanding suburb of Birmingham, on the outskirts of prosperous Solihull.
The property produces £806,000 per annum, with an ERV of £886,000 per annum. Tenants include Wilkinson, Boots, Argos, Post Office and Lloyds Bank. Additionally, the purchase includes 25,000 sq ft of vacant offices, which have excellent potential for conversion to residential use.
The fifth investment property is Castlegate House, Dudley, a secure modern office, situated close to Dudley town centre and Castlegate Business Park, one of the Black Country’s premier mixed use business parks. The building is let in its entirety to Towergate Underwriting Group Ltd, trading as Footman James, the classic car insurance specialist, at a rent of £235,125 per annum.
REI has also acquired 150 Birmingham Road, West Bromwich, from the receivership of Anglo Holt Ltd. This is a high quality, self-contained office building and warehouse with parking of 15,840 sq ft and an ERV of £130,000 per annum.
Allowing for the above acquisitions, and after sales made this year to date, REI’s contracted annual rental income has grown to £9.68 million from £7.7 million on 31 December 31, 2014, a rise of 25.7 per cent in the year to date, with a further £338,650 per annum of lettings from the existing portfolio currently with solicitors.
In line with REI’s strategy to invest in well located real estate assets in the established and proven commercial markets of central Birmingham and the Midlands, the investment properties are criteria compliant and will allow the company to benefit from immediate rental income and provide asset management opportunities that will generate capital growth potential.
The initial rental income from the investment properties is £2,259,583 per annum, with an ERV of £2,370,260 per annum, a net initial yield of 8.89 per cent and a reversionary yield of 9.32 per cent.
REI chief executive Paul Bassi said: “Despite the anticipated ‘pause’ in property market activity due to the general election, we have capitalised on our pipeline opportunities and secured £24,950,000 of new investments.
“The new purchases provide excellent prospects for capital upside and immediate rental income to enhance profitability.
“We remain on course to grow our portfolio and continue to deliver on our commitment of a progressive dividend policy.
“The new properties compliment REI’s portfolio, which is benefitting from a healthy regional property market, and we anticipate record contracted rental income and property portfolio valuations for 2015.
“We are in advanced discussions on further sales and acquisitions and are fully on track to deploy the remaining capital from the April 2015 placing which raised over £45 million, as well as utilise our significant available bank facilities to grow our portfolio to over £200 million within the next 12 months.”
