REI dips into war chest for £10.5m acquisition spree
PROPERTY entrepreneur Paul Bassi has flexed his financial muscles once again with twin investments worth almost £10.5m.
His AIM-listed Real Estate Investors, has agreed two new purchases – in Wythall and West Bromwich – totalling £10.45m.
The largest investment has seen the company acquire West Plaza, 144 High Street in West Bromwich; Mr Bassi’s Black Country heartland.
It has been acquired from BW Estates in a deal worth £8m.
The 11-storey, 87,929 sq ft building is next to Metro Court, a 26,000 sq ft office building which REI acquired in December 2008.
West Plaza’s single largest tenant is Premier Inn, with the 85-bedroom hotel occupying six floors and comprising 48,551 sq ft at a current rent of £310,000. There is a rent review due next month. Total rental income is £656,050, with an estimated rental value of £712,918.
Occupancy is 91.6% with the remaining vacant space currently under offer.
Mr Bassi added: “With REI already owning Metro Court, it made sense to acquire West Plaza (left) and capitalise on the marriage value and residential potential.
“These acquisitions are a quality addition to our portfolio, providing strong rental stream from quality occupiers that will support the Company’s intention of implementing a progressive dividend policy.
“We have a very healthy pipeline of criteria-compliant additional acquisitions that are either in legals or in advanced negotiations.”
The investment property in Wythall has been acquired for £2.45m in cash and will produce total rental income of £243,547 per annum at a net initial yield of 9.39%.
The property, Boundary House, is a modern two-storey office building of 21,294 sq ft with 117 car parking spaces.
It is situated in a strategic position on the southern side of Birmingham, close to junction 3 of the M42, with good access to sites around the city plus Birmingham Airport and the NEC.
It is fully let to Grafton Group (UK) on three leases with a weighted average unexpired lease term (WAULT) at purchase of six years and five months.
Since taking the first lease in 2013, the company has expanded to occupy the whole building on a current rental of £243,547 per annum.
Mr Bassi, CEO of REI, said: “This is an excellent addition to our growing portfolio and provides immediate income at a purchase price that we feel offers good prospects for capital growth.”
REI is set to announce its annual results on Monday (March 14).