Real Estate Investors plc has moved quickly to take advantage of growing confidence in the Birmingham investment market.
The AIM-listed firm has sold a part-vacant investment property at 102-106 Colmore Row and 6 Bennetts Hill and bought two Midlands commercial estates.
The Birmingham city centre property has been sold to Cervidae Consultancy for £7.2 million, reflecting a current net initial yield of 4.36% at a premium to REI’s December 2016 year-end valuation.
The first purchase – a mixed use development at Alcester Road South, Maypole, Birmingham – has tenants including a 60-bed Travelodge Hotel, Wilko Retail Ltd, Ladbrokes, Halfords, Subway and KFC.
The site was acquired for £6.1 million at a net initial yield of 7.22%. The hotel and six ground floor retail units have a combined contracted rental of £469,875 per annum.
The second site – a leisure and retail investment at Barracks Road, Newcastle-under-Lyme – has been purchased for £2.8 million, at a net initial yield of 8%, producing £238,700 in annual rental income, rising to £261,696 from February 2018.
It has four purpose-built units and is let to three tenants, Exercise4less, Bathstore, and Domino’s.
REI chief executive officer Paul Bassi, CEO of REI, said: “Against a backdrop of political uncertainty, we have enjoyed an excellent period of activity during which we have secured a further £8.90 million of criteria compliant investment property.
“We have further improved our occupancy and contracted rental income together with a strategic sale, while maintaining a near £200 million portfolio.
“These recent acquisitions provide immediate income and asset management opportunities and have the potential to provide capital growth.
“We believe that economic uncertainty from Brexit negotiations will provide further opportunities for acquisitions, which together with transactions that are already under offer will deliver increased contracted rental income in 2017, which is in line with our strategy to support the further growth of our fully covered dividend payments.”