Real Estate Investors acquires prime retail property in Leamington Spa

Midlands-focussed property investment firm Real Estate Investors announced the acquisition of a fully-let, prime, mixed-use block on The Parade in Royal Leamington Spa on Monday, for £7.45m, generating a net initial yield of 8.05%.

The AIM-traded real estate investment trust said the property, which included 12 units, produced £639,500 per annum with a current weighted average unexpired lease term of 2.8 years to break and 5.5 years to expiry.

Comprising 31,660 square feet of prime space in the Warwickshire town centre, the company said the property was a “popular” shopping destination let to well-known tenants including McDonald's, Tiger UK, Moss Bros, Timpson, Oxfam, Clydesdale Bank, Savers Health and Beauty, and EE.

“This is an excellent strategic addition to our portfolio, increasing our exposure to this affluent town, located at the heart of the London to Birmingham 'Warwickshire corridor',” said chief executive officer Paul Bassi.

“Royal Leamington Spa is a prime commuter belt town offering excellent quality of life, exceptional schools and universities and impressive Regency, Georgian and Victorian properties at affordable prices.

“These factors are attracting migration from London, with 3200 new homes expected by 2024, which will bring an influx of affluent families, enhancing both residential and prime retail values.”

Bassi said the prime investment was multi-occupied, with a “diverse” tenant line-up, providing asset management opportunities to increase capital and rental income.

It took the company’s contracted rental income to £17.5m, which was up 2.88% in the current financial year.

“Our portfolio continues to trade well, with embedded asset management opportunities that provide us with the ability to continue to enhance income and capital values organically.

“The Midlands is a growth market within which we are uniquely connected and together with our existing cash and bank facilities this makes us ideally placed to make further selective acquisitions during this period of political and economic uncertainty.”

At 0802 GMT, shares in Real Estate Investors were down 0.84% at 53.05p.