Real Estate Investors plc, the Birmingham-based AIM listed property investment business is anticipating record rental income at its financial year end on December 31.
The increase comes as a result of acquisitions which have taken the firm’s portfolio over £100 million in gross assets.
In October REI announced that it had unconditionally exchanged contracts to acquire 59/75 Park Street in Walsall for £7.7 million in cash.
The property produces a rental income of £814,312 per annum and tenants include Wallis Retail, Burton, Superdrug Stores, BHS Ltd and Waterstones Booksellers Ltd.
So far during 2014, REI has acquired property in Northfield, Birmingham, Leicester, Birmingham city centre, Smethwick, Sandwell, Bromsgrove, Worcester, Warwick and Wolverhampton.
New tenants to REI’s portfolio this year include The Royal College of Surgeons, HSBC Bank plc, WH Smith, The First Secretary of State, Thomas Cook, Boots, Marks & Spencers, NHS Property Services, Wallis, Arcadia Group, Superdrug, BHS and Waterstones.
Additionally, the company is seeing further evidence of a reduction in tenant incentives and rents hardening and rising during the second half of 2014.
REI has so far this year spent over £20 million on acquiring new assets in the region, and further acquisitions and sales are said to be in the pipeline.
Chief executive Paul Bassi said they had also noted that institutional investor demand has continued to improve substantially and REI has experienced frequent approaches for a range of its assets, in particular city centre stock, where the firm now has 145,047 sq ft, across nine buildings with 40 tenants and further additions anticipated by the year end.
“We have enjoyed a much improved property market throughout 2014, as regional real estate is enjoying strong demand from occupiers and investors,” he said
“We have seen demand from overseas and UK investors who are attracted to a vibrant Midlands economy and are seeking attractive returns and capital growth that they do not believe they will continue to achieve in London and the South East.
“We have very successfully invested the funds from our £20 million equity fundraise which was very well supported during Q1 of this year, and through sales and conservative gearing of our unencumbered assets, we will have significant new funds that will allow us to continue to capitalise on market opportunities and grow our rental income and ownership as we continue to expand the portfolio in line with our growth and income strategy.
“We remain on course to convert to a REIT on January 1, 2015, and we are well positioned to continue with our progressive dividend policy.”