Shopping centre bought for £20m
PROPERTY group Real Estate Investors (REI) has continued its pre-referendum spending spree with the £20m acquisition of Crewe’s Market Shopping Centre from Scottish Widows.
The Birmingham-based group, which is listed on the Alternative Investment Market, had a £70m war chest and its chief executive Paul Bassi has backed his belief that the withdrawal of large investors from the market in the run-up to the EU referendum offered an opportunity for REI.
“We have continued to acquire criteria compliant assets during the period of uncertainty created by the European vote,” said Mr Bassi.
In March it spent £10.45m on two Midlands properties, in Wythall and West Bromwich, and a further £5.135m in April on properties in Telford and Nottingham.
It has taken its spring spending to more than £35m with its latest purchase. The deal, which is being paid for through its cash and bank facilities, represents a net initial yield of 9.0%.
The 154,000 sq ft centre has 25 shops, which are all currently taken and generate £2.17m rent. Tenants include Peacocks, B&M, Argos and Iceland.
Mr Bassi added: “This latest acquisition offers good opportunities to enhance performance through strategic asset management and takes our contracted rental income to £15.7m, up 31.8% since the 2015 year-end.
“Additionally, we have a number of ongoing sales and acquisitions that are in our legal pipeline, or in advanced discussions, with numerous new lettings and lease renewals from within the existing portfolio, which will enhance rental income and our average lease lengths.”
REI was advised by Baldev Kang of law firm CBTC Millichips.
