Real Estate Investors plc (REI) has gone on a pre-Christmas spending spree, snapping up two Midlands investment properties for a total of £7,125,000.
The properties in Wolverhampton and Coventry are currently producing total rental income of £730,362 per annum, a net initial yield of 9.8 per cent.
The news sees REI continuing its push towards £200 million of assets on the back of a record year for acquisitions and rental growth.
In September, REI announced half year figures showing a pre-tax profit increase of 211 per cent and a 31 per cent increase in revenue.
The company also broke through the one million square feet barrier, with total ownership of 1,004,459 sq ft, up 26 per cent since December 31, 2014 (799,112 sq ft), with 225 tenants, up from the previous period’s figure of 175.
Now the AIM-listed real estate investment trust has bought a prime retail unit in Wolverhampton City Centre from NAMA, the Irish National Asset Management Agency, which is let to River Island Clothing Ltd on an annual rental of £276,200, producing a net initial yield of 13.05 per cent.
The property at 25-26 Dudley Street was previously purchased for £5.4 million in August 2004. REI has paid £2 million for the 9,418 sq ft building. The lease is due to expire in March 2016 and REI is in discussions with the occupier to renew the lease.
In Coventry, REI has acquired a multi-let office scheme at Brandon Court, Leofric Business Park, Binley, which is let to Yazaki Europe Ltd, a major supplier to Jaguar Land Rover, Chubb, Minitab Ltd, and Saint-Gobain Building Distribution Ltd.
REI paid £5,125,000 for the 33,566 sq ft building.
The property produces an annual rental of £454,162 on a net initial yield of 8.37 per cent, and also includes a parcel of land for potential expansion.
REI chief executive officer Paul Bassi said: “These properties are excellent additions to our growing portfolio and both acquisitions provide immediate income and asset management opportunities that have the potential to provide capital growth.
“These acquisitions contribute to a record annual contracted income that will provide the foundation for further dividend growth, in line with the company’s stated progressive dividend policy.
“We have enjoyed an excellent year in which we will have secured record gross property assets. Our market reputation, available capital and banking facilities, will allow the company to capitalise on market opportunities in 2016.”
Baldev Kang of West Bromwich and Stratford-upon-Avon law firm Clark Brookes Turner Cary acted for REI.