Birmingham-based property group Real Estate Investors posted a portfolio update and third quarter dividend declaration on Monday.
The AIM-traded real estate investment trust said that, during the second half of 2016, REI has sold two non-core retail properties in Crawley and Norwich for £2.725m.
It has also acquired a criteria-compliant prime retail asset for the sum of £1.275m in Bromsgrove, Worcestershire at an initial yield of 8.4%, where tenants include Boots Opticians, Smart Ideas, Thorntons and Loritas Bakery, with potential to add value through asset management including lease re-gears and rent reviews.
The company said it has been experiencing an "exceptionally strong" property investment market across all sectors, particularly since the beginning of the fourth quarter, and will consider further sales in H1 2017, as it has received unsolicited approaches for a number of its assets.
REI said it will look to recycle that capital into criteria-compliant acquisitions, where there is scope for further asset management, and income and capital enhancement.
Occupier demand remained healthy, the board said, in particular within the retail sector, where there were also a number of opportunities to secure residential planning approval to capture significant capital appreciation.
The most notable of these instances was at the scheme in Walsall town centre where BHS was previously an occupier.
REI's portfolio now comprised 1,410,881 sq ft, with an occupancy of 93% and 310 tenants.
The company also confirmed that, in accordance with its progressive dividend policy, it will pay its third quarterly dividend of 0.625p per share for the period 1 July to 30 September 2016.
It said the payment will be made on 20 January to all shareholders on the register as at 23 December.
The ex-dividend date will be 22 December 2016.
"REI remains focused on its investment criteria, and with significant cash and bank facilities, remains well positioned to capitalise on any opportunities that may become available as Brexit discussions continue, whilst maintaining a £200m plus portfolio," said CEO Paul Bassi.
"Our rental income has expanded progressively over the last few years and we anticipate further gains from asset management initiatives that will support the growth of dividend payments in line with our progressive dividend policy.
"We remain optimistic about the prospects for our business for the year ahead, and for our regional economy, which has out-performed other UK regions during 2016."