Pictured above: Kingston House, West Bromwich, acquired by REI for £3.1 million 

Real Estate Investors plc (REI), the West Midlands-based property group, is buying the Kingston House office development in West Bromwich for £3.1 million in cash from JLG Investments Ltd.

Paul Bassi, chief executive of AIM-quoted REI, said it represented an excellent opportunity to buy well in the heartland of their investment portfolio.

"We believe that this latest acquisition is an excellent addition to our rapidly growing portfolio of income generating properties.

"We are still open for business and very keen to buy in the West Midlands. REI has the benefit of both existing cash resources and long standing banking relationships. We are actively seeking residential, retail and office opportunities within the West Midlands."

Late last year, REI declared it was prepared to spend up to £100 million in 2010/11 and it began its acquisition programme with the purchase of 75-77 Colmore Row for £4.5 million.

In December REI acquired a retail parade in a prime location in Rugeley town centre in Staffordshire for £900,000 with an initial rental income of £72,250. The property is mainly let to two national multiple retailers - WH Smith expiring in August 2020 and Claire's Accessories - with the remainder let to local operators.

Kingston House, REI's latest acquisition, is currently fully let and producing rental income of approximately £365,000 per annum. The principal tenant is Sandwell Primary Care Trust with a lease expiring in July 2019.

The development totals around 42,000 sq ft and was completely refurbished in 2008/9 by the vendor.

Agents DTZ in Birmingham represented the vendors and Bond Wolfe acted for REI.

In a separate announcement REI also confirmed that it has received detailed planning consent for eight three-bedroom, semi-detached homes at its recently acquired former public house, Hill Tavern in Dudley, West Midlands.

This now takes REI's total residential plots to over 40 from former public house development sites acquired.

Paul Bassi said: "We will continue to acquire opportunistic residential sites that we believe represent real value to REI, giving us the potential either to resell for healthy profits or develop the sites for retention, providing REI with favourable yields and rental."