Real Estate Investors adds two new provincial properties

Real Estate Investors was all smiles on Monday, having acquired two new properties in provincial centres, with immediate income benefits.

The AIM-listed real estate investment trust announced the acquisitions to the market on Monday, for a total consideration of £7.125m.

Real Estate Investors said the properties would produce total rental income of £730,362 at a net yield of 9.8%.

The first property, in Wolverhampton city centre, was a retail unit currently let to London-based fashion retailer River Island for £276,200 pa, with a net initial yield of 13.05%.

It was acquired from the Irish National Asset Management Agency, and last changed hands in August 2004 for £5.4m.

The lease to River Island was due to expire in March 2016, though Real Estate Investors said it was in discussions with the retailer to renew the lease.

In Coventry, the firm has invested into a multi-let office scheme, with a weighted average annual unexpired lease term of 11.33 years to expiry and 6.98 years to break.

The property is currently let to Yazaki Europe, Chubb, Minitab and Saint-Gobain Building Distribution, producing £454,162 pa. It incorporates a parcel of land for expansion, at a net initial yield of 8.37%.

"These properties are excellent additions to our growing asset portfolio, and both acquisitions provide immediate income and asset management opportunities that have the potential to provide capital growth", said CEO Paul Bassi.

"We have enjoyed an excellent year in which we will have secured record gross property assets. Our market reputation, available capital and banking facilities will allow the company to capitalise on market opportunities in 2016", he added.

At 1015 GMT on Monday, shares in Real Estate Investors were trading flat at 66p.