Real Estate Investors PLC Property Transactions Update (9847H)

TIDMRLE

RNS Number : 9847H

Real Estate Investors PLC

14 June 2017

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 GBP15.32 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 GBP335,000 per annum of letting deals in legal pipeline, the completion of which will further improve rental income and occupancy across the portfolio.

Acquisitions

-- Alcester Road South, Maypole, Birmingham has been acquired for GBP6.1 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 GBP469,875 per annum, of which GBP201,000 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 GBP2.8 million at a net initial yield of 8.00% and a reversionary yield of 8.78% in February 2018, producing GBP238,700 per annum, rising to GBP261,696 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.

Disposal

-- 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 GBP7.2million, 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 GBP8.9 million of criteria compliant investment property and further improved our occupancy and contracted rental income together with a strategic sale, whilst maintaining a near GBP200 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."

Ends.

Enquiries:

 
 Real Estate Investors Plc 
  Paul Bassi                     [phone] 
 Smith & Williamson Corporate 
  Finance Limited 
  Azhic Basirov/David Jones      [phone] 
 Liberum 
  Jamie Richards/Ben Roberts     [phone] 
 Gable Communications Limited    [phone] 
  John Bick                       [phone] 
                                  [e-mail] 
 

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.

This information is provided by RNS

The company news service from the London Stock Exchange

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June 14, 2017 02:00 ET (06:00 GMT)