Real Estate Investors plc (REI) has swooped to buy a Midlands shopping parade in a pre-Christmas buying spree.
REI has paid £7.45 million for The Parade, Royal Leamington Spa, a fully-let, prime mixed use block of 12 units currently generating rental income of £639,500 per annum, representing a net initial yield of 8.05%.
The Parade comprises 31,660 sq ft in a prime location in the town centre of prosperous Leamington Spa.
It is a popular shopping destination let to well-known tenancies including McDonald’s, Tiger UK, Moss Bros, Timpson Ltd, Oxfam, Clydesdale bank, Savers Health and Beauty and EE.
REI chief executive Paul Bassi said: ““This is an excellent strategic addition to our portfolio, increasing our exposure to this affluent town, located at the heart of the London to Birmingham ‘Warwickshire corridor’.
“Royal Leamington Spa is a prime commuter belt town offering excellent quality of life, exceptional schools and universities and impressive Regency, Georgian and Victorian properties at affordable prices.
“These factors are attracting migration from London, with 3,200 new homes expected by 2024, which will bring an influx of affluent families, enhancing both residential and prime retail values.”
He said The Parade is a prime investment which is multi-occupied with a diverse tenant line-up, providing asset management opportunities to increase capital and rental income.
“It takes our contracted rental income to £17.5 million which is up 2.88% in the current financial year. Our portfolio continues to trade well, with embedded asset management opportunities that provide us with the ability to continue to enhance income and capital values organically.
“The Midlands is a growth market within which we are uniquely connected and together with our existing cash and bank facilities this makes us ideally placed to make further selective acquisitions during this period of political and economic uncertainty.”
This is the first acquisition announced since REI’s half year results when chief executive Paul Bassi announced the business had £25 million in cash and agreed bank facilities on tap with a number of deals in the pipeline.
The vendors were advised by property agents Lewis & Partners and law firm Maples Teesdale, while REI were advised by lawyers CBTC Millichips.