REI ends the year on a high with double acquisition
BIRMINGHAM property group Real Estate Investors (REI) has gone on a pre-Christmas spending spree, buying investment properties in Coventry and Wolverhampton for a total of £7.125m.
Entrepreneur Paul Bassi’s firm said the properties will produce total rental income of £730,362 p.a. at a net initial yield of 9.8%.
It has bought a retail unit in Wolverhampton city centre from the Irish NAMA (National Asset Management Agency).
The unit, which produces £276,200 p.a. with a net initial yield of 13.05%, is let to River Island Clothing.
The property at 25-26 Dudley Street was previously acquired for £5.4m in August 2004. REI has paid £2m for the 9,418 sq ft building.
The lease is due to expire in March 2016 and REI is in discussions with the occupier about its renewal.
REI has also purchased a multi-let office scheme in Coventry – at Brandon Court, Leofric Business Park, Binley – which is let to Jaguar Land Rover supplier Yazaki Europe, Chubb, Minitab and Saint-Gobain Building Distribution. It has an avarage unexpired lease term of 11.33 years (6.98 years to the lease break).
REI paid £5.125m for the 33,566 sq ft building which produces £454,162 p.a at a net initial yield of 8.37%.
The site also incorporate a parcel of land for expansion.
The deals sees REI continuing its push towards £200m 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% and a 31% increase in revenue.
The company also broke through the 1m sq ft barrier, with total ownership of 1,004,459 sq ft, up 26% since December 31, 2014 (799,112 sq ft), with 225 tenants, up from the previous period’s figure of 175.
Speaking about his latest acquisitions, Bassi – CEO of REI – 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.”
