Property Acquisition

8th June 2016
RNS Number : 5114A
Real Estate Investors PLC
08 June 2016
 

 8 June 2016

Real Estate Investors plc

(‘REI’ or ‘the Company’)

£20 million acquisition of retail centre

Net Initial Yield of 9%

Significant opportunities to add value to the existing scheme

 

Real Estate Investors plc (AIM:RLE), the Birmingham based property group and UK listed Real Estate Investment Trust (‘REIT’), is pleased to confirm the freehold acquisition of the ‘Market Shopping Centre’ in Crewe from Scottish Widows for the sum of £20 million, through the Company’s existing cash resources and/or bank facilities, representing a net initial yield of 9.00%.

 

The property produces £2,165,000 rental income per annum (gross), with a WAULT of 5.14 years to expiry and 4.35 years to break.  The market-based shopping centre incorporates 25 retail units with predominantly ground floor retail accommodation and first floor ancillary.  In total, there is 154,130 square feet of retail and ancillary accommodation, with 294 external car parking spaces. Contracted tenants include River Island, Halifax, Superdrug, Brighthouse, Ernest Jones, Hutchinson 3G, Argos, Iceland, B&M, Peacocks and Poundworld.  The retail space has 100% occupancy.

 

The acquisition is fully criteria compliant with REI’s investment strategy and operational geographical radius and provides significant opportunities to ‘add value’ through rent reviews, lease renewals and the creation of additional units on the substantial external car parking facility to increase the retail footprint of the overall site which is attractive for retailers and consumers alike.  There is also scope to restructure the scheme, which will provide potential for significant capital uplift.

 

This acquisition takes total acquired assets in the year to date to over £35 million and will take the Company’s current contracted rental income to £15.7m.

 

Paul Bassi, CEO of REI, commented:

“We have continued to acquire criteria compliant assets during the period of uncertainty created by the European vote. This latest acquisition offers good opportunities to enhance performance through strategic asset management and takes our contracted rental income to £15.7m, up 31.8% since the 2015 year-end.  

 

“Additionally, we have a number of ongoing sales and acquisitions that are in our legal pipeline, or in advanced discussions, with numerous new lettings and lease renewals from within the existing portfolio, which will enhance rental income and our average lease lengths.

 

“The Company has significant additional capital from rental income, property sales and bank facilities to continue to grow the portfolio, capitalise on the market opportunity and generate additional rental income to support our dividend growth.

 

“We will provide a trading update and confirm the Q1 2016 dividend in early July 2016.”

 

Ends.

 

Real Estate Investors plc

Paul Bassi

 

+44 (0)121 212 3446

Smith & Williamson Corporate Finance Limited

Azhic Basirov/David Jones

 

+44 (0)20 7131 4000

Liberum

Jamie Richards/Tom Fyson

 

+44 (0)20 3100 2000

Gable Communications Limited

John Bick

+44 (0)20 7193 7463

+44 (0)7872 061007

rei@gablecommunications.com

 

 

About Real Estate Investors plc

 

Real Estate Investors Plc is a publicly quoted property investment company with a portfolio of over 1,000,000 sq ft of commercial property managed by a highly experienced property team with over 100 years of combined experience of operating in the Midlands property market across all sectors.

 

The Company’s strategy is to invest in well located, real estate assets in the established and proven markets of central Birmingham and the Midlands, with income and capital growth potential, realisable through active portfolio management, refurbishment, change of use and lettings.  The portfolio has no material reliance on a single asset or occupier.

 

On 1st January 2015, the Company converted to a REIT.  Real Estate Investment Trusts are listed property investment companies or groups not liable to corporation tax on their rental income or capital gains from their qualifying activities.

 

The Company aims to deliver capital growth and income enhancement from its assets with the view to implementing a progressive dividend policy. Further information on the Company can be found at www.reiplc.com.

 

 

This information is provided by RNS
The company news service from the London Stock Exchange
 

END

 
 

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