REI tops the ton with latest acquisition

West Midlands-based quoted property investors Real Estate Investors plc have broken through the £100 million gross assets ceiling with its latest acquisition.

The AIM-listed company has announced that it has unconditionally exchanged contracts to acquire 59/75 Park Street in Walsall for £7.7 million in cash.

The property produces a rental income of £814,312 per annum and tenants include Wallis Retail, Burton, Superdrug Stores, BHS Ltd and Waterstones Booksellers Ltd.

Chief executive Paul Bassi said: “With this latest acquisition, our gross assets now exceed £100 million, predominantly acquired during the property and financial market downturn.

“The portfolio is diverse, with active asset management opportunities and is now benefitting from an improved property market.

“I anticipate an excellent year end with record gross property assets, contracted rental income and dividend payout to our shareholders.”

REI plc was represented by Knight Frank Birmingham and Clark Brookes Turner Cary Solicitors.  The vendors, Scottish Widows, were advised by Jackson Criss and Addleshaw Goddard LLP Solicitors.

The news comes hard on the heels of REI’s half year results which saw the firm reporting pre-tax profits up to £2.6 million compared to £769,000 for the same period last year (to June 30) – a 238 per cent increase.

The firm is anticipating a further dividend payment of 0.75p for the full year, which will result in an increase of 50 per cent for 2014.

During the first half of 2014, REI acquired property in Northfield, Birmingham, Leicester, Birmingham city centre, Smethwick, Sandwell, Bromsgrove, Worcester and Wolverhampton.

Additionally, new tenants in the portfolio include HSBC, West Bromwich Building Society, Lunn Poly, First Secretary of State, WH Smith, WH Ireland, Royal College of Surgeons, Thomas Cook, Thomson Travel, Sharps Bedrooms, Boots UK Ltd, Marks and Spencer Simply Foods Ltd and NHS Property Services.

REI has so far this year spent over £20 million on acquiring new assets in the region, and further acquisitions and sales are said to be in the pipeline.

The business is to go ahead to convert REI’s status to a “Real Estate Investment Trust” to allow the firm to make these sales in a tax efficient manner and support the board’s stated objective of growing the dividend payments.