Birmingham-based Real Estate Investors has reported a 5.5% increase in its portfolio value to £224.8m for 2018.
The 1.55m sq ft portfolio comprises 52 commercial properties, which have 269 tenants and a net initial yield of 7.26%. Within the portfolio the company has identified 250,000 sq ft of permitted development opportunities for conversion to residential.
In its results for the year ended 31 December 2018, REI also reported growth in its contracted rental income from £16.2m in 2017 to £17m in 2018. Its underlying profit before tax was up by 16.1% to £7.2m from £6.2m in 2017, which the company said reflected a year of strong office occupier demand, with occupancy standing at 96%.
Its average cost of debt fell to 3.7%, with 67% of debt fixed and conservative loan-to-value gearing at 39%. The company also has £25m of cash and facilities set aside for opportunistic transactions, with further headroom available if required.
Chief executive Paul Bassi said: “In 2019, we expect to continue to prosper from the popularity of Birmingham and the wider Midlands, as the region’s economy benefits from the arrival of HS2, Coventry City of Culture 2021 and Commonwealth Games 2022.
“We anticipate seeing off-market opportunities on the back of the current financial and political volatility. We welcome these periods of uncertainty, as they often bring mis-priced assets to the market which, with our local expertise and financial strength, we can move quickly to capitalise on.”
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