Real Estate Investors plc, the West Midlands-based property group, has sold Cathedral Place, 42-44 Waterloo Street, Birmingham, to Canada Life for £4.606 million.
The 12,933 sq ft building is home to REI’s head office, recruitment consultants Greenwell Gleason and Key Personnel, and charity Shaw Trust. The sale represents a price per square foot of £356 and a net initial yield of 4.12 per cent.
Chief executive Paul Bassi said: “This sale is significantly above our book value and more accurately reflects the potential value of properties within our portfolio and reveals a much improved regional property investment market.
“We continue to receive interest in a number of our properties and are in talks on other sales which will provide REI with returns in line with our expectations.”
The deal follows on from a busy May which saw REI buy City Gate House in Leiceter, the WH Smith occupied retail unit in Bromsgrove High Street and the former Sandwell College campus in Smethwick, Sandwell.
So far this year, REI has spent £8.6 million on acquisitions.
REI undertook a successful £20 million placing in March 2014 and has since announced a run of completed lettings including new tenants Goodchild Estate Agents, Clark Brooks Turner Carey Solicitors, The Royal College of Surgeons, YMCA, KSS Leisure, Bad Apple Hair and eCigs UK.
Birmingham’s most active property investor, the firm now has an established and diverse property portfolio focussed across the Midlands, with properties in Birmingham, Walsall, West Bromwich, Bromsgrove, Leamington, Leicester, Edgbaston, Derby, Kings Heath and Rugeley.
Paul Bassi said; “Overall, we have 686,281 sq ft across 47 buildings and 151 tenants. Some 19.3 per cent is located in the prime Birmingham Colmore Business District and 84.4 per cent in Birmingham and the Midlands.”
New tenants secured from via acquisitions include HSBC, WBBS, Lunn Poly, First Secretary of State, WH Smith, WH Ireland, Webb Gray Architects, Thomas Cook, Thomson Travel and Sharps Bedrooms.
Mr Bassi added that REI had a £20 million pipeline of acquisitions that fit the firm’s criteria and will provide excellent yields and potential capital uplift.
He said he was encouraged by the significantly improved lending market, offering excellent and competitive banking support.
“During the first half of 2014, we have made excellent progress on lettings, acquisitions and sales. I anticipate continued further activity during the second half of the year in a significantly improved regional economy and property market.
“The company will continue with its progressive dividend policy and will declare the interim dividend in September 2014 and a final dividend in March 2015. It remains our intention to secure REIT status within the near future.”
