Business
Property Acquisition and Posting of Circular
Property Acquisition and Posting of Circular.
About this update from Real Estate Investors Plc
[{"type":"text","content":"\n \nRNS Number : 5896R Real Estate Investors PLC 09 March 2016 \n\n9 March 2016\n \nReal Estate Investors PLC\n('REI' or the 'Company' or the 'Group')\n \nProposed acquisition of West Plaza\n \nReal Estate Investors PLC (AIM: RLE), the Birmingham based property group and AIM listed Real Estate Investment Trust, announces that it has exchanged contracts to acquire (\"the Acquisition\") the freehold of West Plaza, 144 High Street, West Bromwich B70 6JJ (\"West Plaza\" or \"the Property\") from Bond Wolfe Estates Limited (\"BWE\") for a consideration of £8.0 million, to be paid in cash from the Company's existing resources and facilities (no debt is being assumed by the Company under the Acquisition). The Property has been valued by an independent professional valuer, GBR Phoenix Beard Limited (\"GBR\"), at £8.1 million as at 5 February 2016.\n \nWest Plaza is an eleven storey, 87,929 sq ft building close to Junction 1 of the M5 motorway. It adjoins Metro Court, a 26,000 sq ft office building which is already owned by the Company (acquired in December 2008). West Plaza's current contracted annual rent is £656,050 and the ERV (estimated rental value) is estimated by GBR at £712,918, although the Company's internal ERV estimate is higher based on its assessment of the Property and the market. The largest single tenant is Premier Inn (part of Whitbread PLC) with an 85 bedroom hotel occupying 6 floors (comprising 48,551 sq ft) at a current annual rent of £310,000 (rent review due in April 2016; expiry date April 2031 with break in April 2021). The 8th floor is let to Bond Wolfe (a partnership in which Paul Bassi (the Company's Chief Executive) is the principal equity holder); this lease covers 8,555 sq ft, is at an annual rent of £112,500 and expires in September 2020. The WAULT (weighted average unexpired lease term) of the Property is 10.6 years (4.7 years to break options) and occupancy is currently 91.6% (the vacant space is currently under offer). The Acquisition is expected to enhance REI's net income and the Company believes that there is potential, in the longer term, for residential development of the Property. The Company also believes there may be additional marriage value from combining the Property with Metro Court, the adjoining property it owns.\n...