Birmingham based property group Real Estate Investors Plc (REI) has pursued a strategy of acquiring assets of strong future value since making its successful £45 million placing in April of this year, and is furthering its target to grow the value of its portfolio over the next 12 months.
Since April, REI has acquired a total of six new properties totalling an aggregate consideration of £24,025,000. The remaining asset is a currently vacant property snapped up by the group for £925,000, allowing for further high returns in future and bringing the total investment sum to £24,950,000.
All of the recent acquisitions fall under the categories of office or retail assets, with some – like the Bearwood Shopping Centre in Edgbaston and 40 St Paul’s Square in Birmingham’s jewellery quarter – already home to high profile tenants including Aldi, Lloyds Pharmacy Limited and the Willis Group.
These two assets produce a respective rental income of £685,650 per annum and £399,824 per annum, although the former has the potential to lift its annual rental income to £690,956 with a little active asset management.
REI also acquired Virginia House in Worcester, which produces £132,900 per annum in rents but has an Estimated Rental Value (ERV) of £184,000 per annum. Again, this is a situation in which asset management may prove useful for the group, although the income provided is very secure and comes from tenants including the Wheelchair Basketball Association, 3AAA Limited and Worcester College of Technology.
Castlegate House in Dudley is a modern office building close to the town centre let in its entirety to Towergate Underwriting Group, generating an annual rental income of £235,125.
1062-1104 Warwick Road in Acocks Green is a shopping precinct situated in one of Birmingham’s most rapidly expanding suburbs. The current annual rental income amounts to £806,000, but this could be lifted to £886,000 per annum, particularly if the group chooses to convert the 25,000 sq ft of vacant offices included in the sale with potential for residential conversion..
The remaining property is the “wildcard” of the bunch, in that it is currently vacant, yet has the potential to provide excellent returns given the current depletion of manufacturing stock in the Midlands. 150 Birmingham Road in West Bromwich offers high quality warehouse space with a self-contained office building and plenty of parking, allowing REI to set an ERV of £130,000 per annum.
REI chief executive officer, Paul Bassi, says; “The new properties complement REI’s portfolio, which is benefitting from a healthy regional property market, and we anticipate record contracted rental income and property portfolio valuations for 2015.
“We are in advanced discussions regarding further sales and acquisitions and are fully on track to deploy the remaining capital from the April 2015 placing, as well as utilise our significant available bank facilities to grow our portfolio to over £200 million within the next 12 months.”
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