Real Estate Investors (LON:RLE), the West Midlands property specialist, is back on the acquisition trail, splashing just over £7mln on two properties.
It has acquired the prime retail unit in Wolverhampton city centre from the Irish National Asset Management Agency generating £276,200 a year in rent, or a yield of just over 13%.
RLE is in negotiations with the tenant, the River Island clothing chain, over the lease, which expires next March.
It has also acquired an office scheme in Coventry producing an annual rent of £454,162 and where the occupiers are on average leases of 11.33 years. The net yield is a very handy 8.37%.
In fact the average yield for both properties is 9.8% based on a purchase price of £7.125mln.
Last month the company snapped up three buildings costing £22.2ml with unexpired leases of around 8.5 years that produce an annual rental income of £1.93mln, equating to a yield of around 8.2%.
Of the latest purchases chief executive Paul Bassi said: "These properties are excellent additions to our growing portfolio and both acquisitions provide immediate income and asset management opportunities that have the potential to provide capital growth.
"These acquisitions contribute to a record annual contracted income that will provide the foundation for further dividend growth, in line with the company's stated progressive dividend policy.”
The company uses its in-depth knowledge of the West Midlands property scene to pick offices and shops that have development potential.
The local economy is thriving yet there are still bargains to be found. Rental yields, meanwhile, are far higher than those seen in London.
Real Estate is aiming for a £200mln portfolio of property in the Midlands.