Real Estate Investors plc (REI), the Birmingham-based property investment company, has reported record profits – up 104 per cent to £12.2 million.
Gross property assets are up 51 per cent from £104.4 million to £157.5 million in the financial year to December 31, 2015.
REI’s final results show record contracted rental income, profits, dividends and occupancy levels.
Paul Bassi, REI chief executive, said: “We have enjoyed progressively positive results over concurrent years, together with a growing dividend payment.
“We anticipate continued growth in our portfolio in 2016, and further rental and capital growth over the coming years, all of which will underpin our commitment to paying a progressive dividend.
“An important factor in our decision to convert to a Real Estate Investment Trust was to support our dividend policy. We will be paying future dividends on a quarterly basis, commencing in 2016.”
Dividends increased by 33 per cent from 2014 to 2015.
During the year REI made acquisitions totalling £57.7 million, up 97.3 per cent from £29.5 million in 2014.
Property disposals totalled £15.3 million (2014: £7 million), including non-core assets, as REI continued to recycle capital to improve the growth profile of the portfolio.
REI’s total ownership rose to 1.1 million sq ft, up 37.6 per cent on the 2014 figure of £799,112 sq ft with 211 tenants currently (2014: 175), an increase of 20.6 per cent.
Paul Bassi said “This has been an excellent year of progress for shareholders that has resulted in record rent roll, profits, portfolio size and dividend payment.
“We have continued to invest in our region, in criteria compliant assets that have the potential for capital growth and provide strong rental yields, through active asset management.”
Highlights in a busy year for acquisitions included Jasper Retail Park, Tunstall, Stoke-on-Trent, Bearwood Shopping Centre in Smethwick, Virginia House in Worcester, Brandon Court in Coventry and 150 Birmingham Road, West Bromwich.
During 2015 net assets increased 82 per cent from £64.6 million to £117.6 million and contracted rental income rose to £11.9 million, up 54.5 per cent.
Mr Bassi added: “We stated last year, that for 2015, we anticipated nothing other than a mild ‘pause’ around the general election, providing a window of opportunity when we acted to secure additional property and that the regional economy would remain robust.
“We are pleased to see that this is precisely what happened. The economy has continued to grow and property investor demand has remained strong and a positive improvement in occupier demand has surfaced.”
Turning to the economic prospects of REI’s heartland – the West Midlands – he said: “Our region is in the early stages of its re-emergence as an economic and commercial powerhouse, underpinned by a number of supporting factors, not least, the highest level of future inward investment the region has ever seen, building on the now established new business and industrial prosperity, which is clearly evidenced by the renewed buoyancy in new job creation across the region.”
And he is equally buoyant about the prospects for 2016.
During 2015, REI raised £45 million which it deployed toward acquisitions of £57.7 million and already this year it has secured a new five year, £30 million facility with RBS.
Mr Bassi said: “Despite the economic and political ‘headwinds’, a highly volatile stock market, coupled with the Brexit debate and Euro vote, which might deliver another buying opportunity, we anticipate that economic activity in our region will remain positive and that investor and occupier demand will remain stable, especially as it is likely that the low interest rate environment will remain for 2016.
“Property investment continues to provide investors with secure returns in uncertain and volatile periods and we therefore anticipate a positive property market going forward.
“With £70 million of cash and bank facilities, we have substantial funds to capitalise on market opportunities to grow REI’s portfolio and dividend further,” he said.
