Huge surge in profit for Real Estate Investors
REAL Estate Investors, the Birmingham based property group, has seen its profit increase by a massive 211% on a year on year basis.
And its property portfolio has now topped the 1m sq ft mark.
Revealing its results for the six month period ending June 30, the firm – structured as a real estate investment trust (REIT) – said it has experienced record contracted rental income, positive capital growth and a rapidly improving regional market.
Pre-tax profits were up 211% to £8.1m (H1 2014: £2.6m) while revenue was up by 31% to £3.8m (H1 2014: £2.9m).
Rental income increased 37% to £3.7m (H1 2014: £2.7m) while the firm’s gross property assets are now valued at £130.4m, 25% higher than a year ago. Investment property assets were also up by 25% to £18m.
REI underwent a successful £45m equity fundraising in April and now has net assets of £115.3m, 78% more than a year ago (£64.6m).
The firm secured acquisitions during the period of £28.3m and made disposals of £8.9m.
Record contracted rental income of £9.3m was up 21% since 31 December 2014.
REI now has total ownership of more than 1m sq ft of space – 1,004,459 sq ft compared to 799,112 sq ft at the end of 2014, with 225 tenants (31 December 2014: 175).
Its Birmingham City centre ownership is now 181,166 sq ft (31 December 2014: 159,792 sq ft) representing 28% of the firm’s portfolio by valuation (31 December 2014: 31%).
REI’s CEO Paul Bassi said: “An excellent set of first half results. Our acquisition strategy is beginning to show positive capital growth and strong cash flows.
“The £45 million placing in April has provided additional funds, to allow us to capitalise on market opportunities, in a rapidly improving regional market. I anticipate continued growth in our rental income, profitability, dividend payment and, with our current available resources, establishing a £200 million portfolio within the next six months, subject to sales.”
“Birmingham and the wider Midlands is re-emerging as a major UK economic powerhouse and whilst manufacturing and in particular the automotive sector remains strong, the regeneration of the local economy is underpinned by the growing industries of tourism, education, retail, digital media and technology.”
He added that REI had a strong pipeline of potential new purchases and a very healthy pipeline of new lettings within its portfolio.
New acquisitions included, St Paul’s Square, Birmingham (offices – £3.75m), Acocks Green, Birmingham (retail – £8m), Bearwood Shopping Centre, Birmingham (retail – £8.65m), Virginia House, Worcester (£1.2m), Castlegate House, Dudley (£2.44m) and 150 Birmingham Road, West Bromwich (offices – £925,000).
