REI ends October with £22m worth of deals

BIRMINGHAM-based property group REI has acquired three investment properties for £22.23m.

The AIM-listed real estate investment trust (REIT) has snapped up Birch House in Joseph Street, Oldbury, which is fully let to NPower, 1-2 Albion Parade, Kingswinford, fully let to the Midcounties Co-operative Society and a development at Tunstall, Stoke-on-Trent which is home to Matalan, Argos, Next, Shoezone and Pizza Hut.

The acquisitions provide a net initial yield of 8.22% and is in line with the group’s investment strategy of acquiring properties which can deliver both attractive yields and capital growth. 

The properties produce a total annual rental income of £1,932,995 and provide a number of asset management opportunities including rent reviews, lease renewals and planning consent.
 
Additionally, REI has sold Arden House in Acocks Green, Birmingham – a vacant 20,000 sq ft office building – for a cash consideration of £760,000, a substantial increase above acquisition cost.

The proceeds of the disposal will be used for further acquisitions.
 
Paul Bassi, chief executive of REI, said: “These latest acquisitions provide a number of asset management opportunities and generate quality rental income that will support our progressive dividend policy.
 
“We continue to benefit from a vibrant Midlands economy and a much improved occupier market, against a backdrop of strong valuations for occupied investment property. 

“Prime Birmingham city centre has seen significant yield compression and we are beginning to see similar pressure on property values throughout the region, in particular in prime locations in town centres and well-let modern office schemes.
 
“Our acquisition pipeline remains strong and our market reputation and ability to transact expediently in respect of criteria-compliant opportunities ensures we remain on track to deliver a £200m property portfolio in the Midlands.”

REI was advised by Baldev Kang of solicitors Clark Brookes Turner Cary and property agents Bond Wolfe, Knight Frank and GBR Phoenix Beard.