Birmingham based property group Real Estate Investors (REI) has announced the sale of 770-772 Bristol Road South in Northfield to an undisclosed private investor.
The property comprises of 6,751 sq ft of retail space, with residential accommodation above, and sold for £1.425 million earlier this week. REI originally acquired the property around a year ago for £1.25 million, meaning the deal represents a 7.68 per cent yield.
Chief executive of REI, Paul Bassi, believes that the group’s dedication to raising property values through careful asset management initiatives have proved invaluable in the sale of 770-772 Bristol Road South.
He says; “Since acquiring the property approximately 12 months ago, our asset management, including selling a flat above for £50,000 at auction, has been completed and we have sold at a level well above our book value and purchase price.”
At this point it is unknown whether the new owner will seek to further raise the value of the site through redevelopment or improvement works. Existing tenants HSBC and the West Bromwich Building Society are expected to continue with the set lease agreements for their respective units.
This is the first major deal announced by REI since the release of its impressive annual report, which saw the property group achieve record revenues and profits thanks to a profitable string of deals completed during the last financial year. Revenue increased by £1.3 million to £8 million in the 12 months to the 31st of December 2014, while pre-tax profits rose correspondingly from £4.9 million to £6 million during the period.
Furthermore, the group’s gross property assets were valued at £104.4 million, a significant increase from the £76.2 million total posted during the 2013 fiscal year.
In part, this leap in value has been attributed to several lucrative deals – including the leasing of 33 Bennetts Hill in Birmingham to Cosy Club – which allowed the group to lift its rental income and channel increased funds into further acquisition activity.
Mr Bassi continued; “Record profits, gross property assets and dividend payments reveal an excellent year of progress that provides the basis for continued growth and delivery of a progressive dividend policy.
“Acquisition opportunities remain healthy and will continue to grow our portfolio – we will also make selected sales where we consider we have maximised our management and will capitalise upon our status as a Real Estate Investment Trust.
“We anticipate further rental growth and improved occupancy levels, benefiting from a growing regional economy that is clearly emerging as a major economic powerhouse in the UK.”