9th Mar 2016 15:36
LONDON (Alliance News) - Real Estate Investors PLC on Wednesday said it has acquired an office building in Birmingham and exchanged contracts on an eleven-storey property in West Bromwich for a total of GBP10.5 million in cash.
The company said the office in Birmingham, which it purchased for GBP2.5 million, is a two-storey building comprising 21,294 square feet with 117 car parking spaces. It is located on the south side of Birmingham, close to the M42 and is fully let to builders' merchant Grafton Group.
The property generates an annual rent of GBP243,257, giving the purchase a net initial yield of 9.4%.
Elsewhere, Real Estate Investors said it has agreed to purchase West Plaza in West Bromwich from Bond Wolfe Estates Ltd for GBP8.0 million.
West Plaza is an eleven-storey, 87,929 square feet building, close to Junction 1 on the M5 motorway. It adjoins Metro Court, which was acquired by Real Estate Investors in 2008, and has a contracted annual rent of GBP656,050. Premier Inn is currently the largest single tenant in the West Plaza building.
Real Estate Investors said there is potential for residential development of the property.
Paul Bassi, Real Estate Investors' chief executive, owns a 65% equity interest in Bond Wolfe Estates, and Real Estate Investors said he is looking to invest part of his share of the estimated net proceeds from the sale in buying further shares in Real Estate Investors.
Due to Bassi's shareholding in Bond Wolfe Estates, the acquisition is subject to approval by Real Estate Investors' shareholders. Real Estate Investors has called a general meeting for April 6, where it will seek the approval.
Shares in the company were down 3.9% to 62.00 pence Wednesday afternoon.
By Sam Unsted; [email protected]; @SamUAtAlliance. Updated by Hannah Boland; [email protected]; @Hannaheboland
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