Real Estate Investors plc (REI) has snapped up two more investment properties across the Midlands.
The Birmingham-based, AIM-listed, property group has paid £5.135 million for developments in Telford and Nottingham.
REI has acquired the 33,166 sq ft Titan House, Euston Park, Telford, from the receivers. The building is on a modern business park next to Telford Central Station and Junction 5 of the M54.
The office development, which has 103 parking spaces, is let to Hewlett Packard Enterprise Service UK Ltd with 4.5 years remaining and a current rental income of £270,000 per annum.
The purchase price reflects a net initial yield of 9.91 per cent and a low capital value of £83 per sq ft. While the property is fully occupied, the tenant currently benefits from a rent free period over the entire first floor, which offers good prospects for rental improvement.
The Nottingham development, Commodore Court on Nuttall Road, has been purchased from a private property company.
The 15,000 sq ft mixed use development is on a busy arterial route in Nottingham and incorporates three fully occupied retail units let to Sainsbury’s Supermarkets Ltd, Barnardos and Bathstore Ltd. It produces rental income of £216,710 per annum and the price reflects a net initial yield of 8.49 per cent.
REI chief executive officer Paul Bassi said: “We have taken the opportunity to acquire additional criteria compliant assets during a period of uncertainty created by the European vote.
“We have further assets under offer and we are confident of achieving our contracted rental income and progressive dividend objectives.
“Our total acquisitions so far in 2016 are running at £15.58 million and our contracted rental income is now £13.4 million, up 12.6 per cent since the year end on December 31, 2015.
“Additionally, from within our existing portfolio we have in excess of £500,000 of potential rental income from agreed lettings which are now progressing and are in our legal pipeline.
“We remain on course to establish a portfolio under management of £200 million in the short term,” he said.
