City centre River Island shop sold for £2m
The landmark River Island shop in Wolverhampton city centre has been bought as part of a multi-million pound property deal - but at less than half the price it fetched a decade ago.
Birmingham-based property company Real Estate Investors (REI), headed by Stourbridge tycoon Paul Bassi, has bought the Dudley Street shop site for just £2 million. It previously changed hands for £5.4 million in 2004, near the height of the property boom.
It highlights how property values have fallen dramatically since the credit crunch of 2008/9.
Known as The Point, on the corner of Dudley Street and Bilston Street, the building was completely redeveloped in 2000 by Hortons' Estate.
With its distinctive glassed tower, it was built at a cost of £1.5 million. River Island took over the lease after the original tenants, fashion chain GAP, pulled out after just two years.
It was bought by an Irish property investor for £5.4 million in 2004 but has been in the hands of the Irish NAMA - National Asset Management Agency – since the global financial crash of 2009.
Now REI has bought the 9,418 sq ft building from NAMA. It is let to River Island on an annual rent of £276,200. The lease is due to expire in March 2016 and REI is in discussions with River Island to renew the lease.
At the same time, in Coventry, REI has acquired a multi-let office scheme atBrandon Court,LeofricBusinessPark, Binley, which is let to Yazaki Europe Ltd, a major supplier to Jaguar Land Rover, Chubb, Minitab and Saint-Gobain Building Distribution.
REI paid £5,125,000 for the 33,566 sq ft building. The property produces an annual rental of £454,162 and also includes a parcel of land for potential expansion.
REI chief executive officerPaul Bassisaid: "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.
"We have enjoyed an excellent year in which we will have secured record gross property assets. Our market reputation, available capital and banking facilities, will allow the company to capitalise on market opportunities in 2016."
The latest deals, together worth £7 million, see REI continuing its push towards £200 million of assets on the back of a record year for acquisitions and rental growth.
In September, REI announced half year figures showing a pre-tax profit increase of 211 per cent and a 31 per cent increase in revenue.
The company also broke through the one million square feet barrier, with total ownership of 1,004,459 sq ft, up 26 per cent since December 31, 2014 (799,112 sq ft), with 225 tenants, up from the previous period's figure of 175.
