Birmingham-based property group Real Estate Investors sealed a hat trick of deals worth £22.23 million as October came to an end.
The AIM-listed real estate investment trust based on Colmore Row, Birmingham, has snapped up Birch House in Joseph Street, Oldbury, which is fully let to NPower, 1-2 Albion Parade, Kingswinford, fully let to the Midcounties Co-operative Society and a development at Tunstall, Stoke-on-Trent which is home to Matalan Retail Ltd, Argos Ltd, Next Group plc, Shoezone Ltd and Pizza Hutt UK Ltd.
REI chief executive Paul Bassi said: “The acquisitions provide a net initial yield of 8.22 per cent and are in line with the group’s investment strategy to acquire properties which can deliver both attractive yields and capital growth.”
The properties produce a total annual rental income of £1,932,995 and provide a number of asset management opportunities including rent reviews, lease renewals and planning consent.
At the same time, REI has sold Arden House in Acocks Green, a vacant 20,000 sq ft office building for a cash consideration of £760,000, a substantial increase above acquisition cost.
Mr Bassi added: “The cash from this sale will be used for further acquisitions and for the company’s general working capital purposes.
“These latest acquisitions provide a number of asset management opportunities and generate quality rental income that will support our progressive dividend policy.
“We continue to benefit from a vibrant Midlands economy and a much improved occupier market, against a backdrop of strong valuations for occupied investment property.
“Prime Birmingham city centre has seen significant yield compression and we are beginning to see similar pressure on property values throughout the region, in particular in prime locations in town centres and well-let modern office schemes.”
And he revealed that REI still has plenty more irons in the fire and the ability to move quickly when the right opportunity presents itself.
“Our acquisition pipeline remains strong and our market reputation and ability to transact expediently in respect of criteria compliant opportunities ensures we remain on track to deliver a £200 million property portfolio in the Midlands,” he said.
REI was advised by Baldev Kang of solicitors Clark Brookes Turner Cary and property agents Bond Wolfe, Knight Frank and GBR Phoenix Beard.