REI confirms conversion to REIT as assets top £100m
BIRMINGHAM-based property group Real Estate Investors (REI) has converted to a real estate investment trust (REIT).
Chief executive Paul Bassi said the decision was made in order to reward investors in the business in the best and most efficient manner.
“Operating as a REIT allows the company to make profits from our rental income and investment property sales free of tax, on the basis that we pay out 90% of such profits as dividends, which is consistent with REI’s previously stated progressive dividend policy,” he said.
The announcement comes as REI closed out a 2014 which saw the firm’s gross assets top £100m for the first time since the business was admitted to the Alternative Investment Market in June 2004.
Bassi said: “We have come a long way in ten years. Our progress in 2014 saw our share price grow by 17% and we achieved record contracted annual rental income during the year.”
During the first quarter of 2014, REI conducted a £20m fund raising exercise which was used during the year to make a number of purchases.
In October REI announced that it had unconditionally exchanged contracts to acquire 59/75 Park Street in Walsall for £7.7m in cash.
During the year REI also acquired property in Northfield, Birmingham, Leicester, Birmingham city centre, Smethwick, Sandwell, Bromsgrove, Worcester, Warwick and Wolverhampton.
New tenants to REI’s portfolio in 2014 included The Royal College of Surgeons, HSBC Bank plc, WH Smith, The First Secretary of State, Thomas Cook and Waterstones.
Bassi said: “Other disposals and acquisitions are currently in legals and we intend to hit the ground running in 2015, continuing where we left off in 2014.
“The prospects for the Birmingham and West Midlands property market in general are good. A lot of undervalued property is now coming into its own and achieving significant returns and we are well placed to take advantage of this.”
