Real Estate Investors plc, the Birmingham-based listed property investment company, is to double its dividend – just six months after announcing its inaugural dividend.
The company has also announced that it has secured planning consent at Southgate Retail Park, Derby, for a 45,000 sq ft food store.
Occupancy rates now stand at 85.16 per cent.
Announcing the half year results to June 30, 2013, chief executive officer Paul Bassi said it pre-tax profit was up from £769,000 against £556,000 in the first half of 2012, and net assets were up from £39 million on December 31, 2012, to £39.6 million.
“We are delighted to pay our second dividend, which is increased by 100 per cent. I anticipate improving values and occupier demand during 2013 and 2014, together with a series of sales and acquisitions,” he said.
“Our valuations have been impacted by the downward valuation at Guardian House, in West Bromwich, as a result of the principal tenant, Challinors Solicitors, a long standing Midlands law firm, entering administration, and the likely vacating of the offices.
“These are excellent office space at the heart of the town centre regeneration, and we already have interest from potential new occupiers. We will re-let and recover the valuation loss. We also have personal guarantees from some of the partners, whom we intend to pursue.”
Turning to the remainder of 2013 and 2014, he sounded a positive note for the prospects of lending to the Midlands commercial property investment market.
“The banks are at last effectively ‘Open for Business’,” he said.
“We have noticed a significant change in the availability of debt to all sectors, other than speculative development funding. In particular, we have noticed a preference to lend to borrowers acquiring income producing investment property, both residential and commercial.”
And he was particularly buoyant about prospects for the regional economy, citing:
– Jaguar Land Rover creating 1,700 new jobs, with a £1.5 billion investment in Solihull, West Midlands.
– Automotive strength will see West Midlands outstrip Germany in export growth
– exports from the West Midlands are set to grow three times faster than Germany’s.
– Deutsche Bank Birmingham taking on a further 134,000 sq ft at Five Brindleyplace for a new operation moving out of London.
– The West Midlands Six Local Enterprise Partnerships have attracted a further £730 million of European funding.
– UK Trade and Invest (UKTI) has identified The Greater Birmingham & Solihull region as being the most successful in the UK at attracting jobs from foreign businesses, topping the national league for new job creation.
He said: “The demand for regional assets has significantly improved, and as this demand is converted to real deals, we anticipate favourable comparable evidence, that should see our investment property valuations improve.
“However, we remain unreliant on this market activity, and continue with asset management activity through refurbishment, lettings, lease renewals and planning consents, to add value to our portfolio.
“As assets reach their valuation target, we will place them for sale and reinvest the capital into further criteria opportunities.
“We remain well positioned to access opportunities in our market place and we are considering further options to grow the business, and remain open to the prospect of converting to a Real Estate Investment Trust,” he said.