14 June 2017
Real Estate Investors Plc
(‘REI’ or ‘the Company’)
PROPERTY ACQUISITIONS AND DISPOSALS UPDATE
Acquisitions increase occupancy and total annual rental income
Strategy on track to support progressive dividend policy
Real Estate Investors Plc (AIM:RLE), the Birmingham based property group and UK listed Real Estate Investment Trust (‘REIT’), is pleased to announce two recent acquisitions and a sale.
These transactions have improved overall occupancy to 94.5%, and contracted rental income has increased to £15.32 million per annum, up 2.8% since year end (allowing for the sale of Colmore Row / Bennetts Hill – see Disposal below). Additionally, from within the existing portfolio, REI has £335,000 per annum of letting deals in legal pipeline, the completion of which will further improve rental income and occupancy across the portfolio.
· Alcester Road South, Maypole, Birmingham has been acquired for £6.1 million at a net initial yield of 7.22% with a reversionary yield of 7.31% and incorporates a 60 bed hotel together with six ground floor retail units, with a combined contracted rental of £469,875 per annum, of which £201,000 per annum is secured against Travelodge Limited for a further 24 years and subject to CPI-linked rent reviews. The property is well let to covenants including Travelodge, Wilko Retail, Ladbrokes, Halfords, Subway and KFC, with a WAULT of 12.25 years.
· Barracks Road, Newcastle-under-Lyme has been acquired for £2.8 million at a net initial yield of 8.00% and a reversionary yield of 8.78% in February 2018, producing £238,700 per annum, rising to £261,696 per annum in February 2018. The property comprises a Leisure and Retail investment of four purpose-built units and is let to three tenants – Xercise4Less, Bathstore and Domino’s, with a WAULT of 9.25 years.
· The sale of a part vacant investment property at 102-106 Colmore Row / 6 Bennetts Hill in Birmingham City Centre for a total consideration of £7.2million, reflecting a current net initial yield of 4.36% and a premium to the December 2016 year end valuation. The purchaser was Cervidae Consultancy.
Paul Bassi, CEO of REI, commented:
“Against a backdrop of political uncertainty, we have enjoyed an excellent period of activity during which we have secured a further £8.9 million of criteria compliant investment property and further improved our occupancy and contracted rental income together with a strategic sale, whilst maintaining a near £200 million portfolio. These acquisitions provide immediate income and asset management opportunities and have the potential to provide capital growth.
“We believe that economic uncertainty from Brexit negotiations will provide further opportunities for acquisitions, which together with transactions that are already under offer will deliver increased contracted rental income in 2017, which is in line with our strategy of supporting the further growth of our fully covered dividend payments.”
Real Estate Investors Plc
+44 (0)121 212 3446
Smith & Williamson Corporate Finance Limited
Azhic Basirov/David Jones
+44 (0)20 7131 4000
Jamie Richards/Ben Roberts
+44 (0)20 3100 2000
Gable Communications Limited
+44 (0)20 7193 7463
+44 (0)7872 061007
About Real Estate Investors Plc
Real Estate Investors Plc is a publicly quoted property investment company with a portfolio of over 1.4 million 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, supporting a progressive dividend policy. Further information on the Company can be found at www.reiplc.com.