Paul Bassi’s Real Estate Investors has completed around £24m of deals in the past few weeks.
The AIM-listed property group, based in Birmingham, has acquired five investment properties for a total of just over £24m, plus vacant properties valued at £925,000.
Deals include the acquisition of 40 St Paul’s Square, Birmingham, a prime office building in the Jewellery Quarter. It is home to tenants including Willis Group, BHP Design and Coltham Developments, and produces an annual rent of £399,824.
The group bought the Bearwood shopping centre in Smethwick, as well as Virginia House, Worcester. Virginia House produces £132,900 pa, and has an estimated rental value of £184,000 pa. Tenants include 3AAA Ltd, CAFCASS, Worcester College of Technology, Remploy and Wheelchair Basketball Association.
REI has also acquired 1062-1104 Warwick Road, Acocks Green, in Birmingham, a shopping parade on the outskirts of Solihull generating £806,000 pa with an ERV of £886,000 pa. Tenants include Wilkinson, Boots, Argos, the Post Office and Lloyds Bank. The purchase also includes 25,000 sq ft of vacant offices with potential for residential conversion.
The fifth investment property is Castlegate House, Dudley, a modern office building close to Dudley town centre. The building is let in its entirety to Towergate Underwriting Group, trading as Footman James, the classic car insurance specialist, at a rent of £235,125 pa.
REI has also acquired 150 Birmingham Road, West Bromwich, from the receivership of Anglo Holt. The office building and warehouse has an ERV of £130,000 pa.
Taking the above acquisitions into account and after sales made this year to date, REI’s contracted annual rental income has grown to £9.7m from £7.7m on 31 December, 2014. This reflects an increase of 25.7% in the year to date.
The deals are in line with REI’s strategy to invest in well located real estate assets in central Birmingham and the Midlands.
The initial rental income from the investment properties is £2.3m pa, with an ERV of £2.37m pa, a net initial yield of 8.9% and a reversionary yield of 9.3%.
REI chief executive Paul Bassi said: “Despite the anticipated ‘pause’ in property market activity due to the general election, we have capitalised on our pipeline opportunities. The new purchases provide excellent prospects for capital upside and immediate rental income to enhance profitability.”
Bassi confirmed that the firm was fully on track to deploy the remaining capital from its April 2015 placing, which raised more than £45m, and that it planned to expand its portfolio to more than £200m within the next 12 months.
