(MENAFN- ProactiveInvestors) () has bought a prime Birmingham city office space with ground floor bar and restaurant producing £235000 a year in rent at a yield of 10.80%.
Tenants include Specsavers and Zapaygo and the property group paid £2.06mln it told investors in a brief stock market statement.
Additionally the firm unconditionally sold land in Bilston West Midlands for £1.875 million which was significantly above book value the company said.
Paul Bassi RLE's chief executive said: "These transactions coupled with our conversion to a Real Estate Investment Trust (REIT) as of 1st January 2015 and a secure and stable property portfolio leave REI well positioned to grow our rental income and continue with our progressive dividend policy throughout 2015."
The firm also secured a number of lease completions before the end of 2014 which will contribute to the company achieving record contracted rental income it said.
Broker Liberum noted that the price paid for 24 Bennetts Hill represented a significant discount to the average prime provincial office yield of 5.5% which highlighted managment's ability to source value in a competitive market.
It repeated a 'buy' on the shares and targets 65p (current price: 59p).
The broker notes the shares trade at 0.94 times spot NAV (net asset value) against the UK Real estate sector on 1.06 times.
This discount to the net asset value is undeserving in Liberum's view as it forecasts 14% total return (NAV growth + dividends) on a 12-month view.
Shares were unchanged at 59p each.
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