NewRiver Retail Limited
("NewRiver" or "the Company")
£50m acquisition of Hillstreet Shopping Centre, Middlesbrough, at a 9.6% yield and early deployment of part of the proceeds of the recent successful equity fundraise
NewRiver Retail Limited (AIM and CISX: NRR), the UK REIT specialising in value-creating retail property investment and active asset management, announces that it has completed the acquisition of the Hillstreet Shopping Centre (the "Centre") in Middlesbrough.
NewRiver and LVS II Lux IV S.a.r.l. ("LVS") have each taken a 50% equity stake in this acquisition and the partnership will benefit from projected high yielding income returns which are expected to deliver a double digit annual recurring return on equity.
The acquisition supports the Company's stated intention to efficiently deploy the proceeds of its recently oversubscribed £67 million equity fundraise and the Centre is NewRiver's largest single asset acquisition to date.
The Centre is a covered, single level shopping complex comprising 224,000 sq ft of retail accommodation and a 753 space car park. NewRiver has acquired the Centre from a UK institution for a total consideration of £49.4m, reflecting an attractive net initial yield of 9.6 per cent.
The Centre offers an attractive weighted average lease expiry of approximately nine years and is anchored by leading European and national retailers Primark, Debenhams and Marks & Spencer with other key tenants including Sports Direct, Home Bargains, Superdrug and Argos. This popular north east shopping centre enjoys annual footfall of approximately 12.6 million ensuring high occupancy, currently at 98 per cent.
In line with NewRiver's proven business strategy, the Company has identified extensive asset management opportunities to unlock additional value including potential improvement of the entrances, increased commercialisation initiatives and potential reconfiguration of units within the Centre. The company is funding its share of the purchase out of cash resources from the placing proceeds and the joint venture has agreed a new debt facility from a leading UK lending bank.
David Lockhart, Chief Executive of NewRiver Retail, said: "The Hillstreet centre is our largest acquisition to date and demonstrates NewRiver's ability to deploy the proceeds of the recent fundraise effectively and efficiently. We are also delighted to have the support of our joint venture partner LVS, to help facilitate our expansion. The acquisition enhances our diverse retailer portfolio and provides significant opportunity to unlock additional value in the Centre underpinned by a robust cashflow.
"The landmark acquisition is a testament to our ability to source and complete high yielding, income generating opportunities in order to drive long term shareholder value. The retail sector is pivotal to the UK economy and provides significant opportunities for NewRiver to continue its strong growth."
-Ends-
For further information
NewRiver Retail Limited David Lockhart, Chief Executive Mark Davies, Finance Director |
Tel: 020 3328 5800 |
Pelham Bell Pottinger David Rydell/Guy Scarborough/Charlotte Offredi |
Tel: 020 7861 3232 |
Cenkos Securities Ian Soanes/Max Hartley |
Tel: 020 7397 8900 |
Liberum Capital Shane Le Prevost/Tim Graham |
Tel: 020 3100 2000 |
About NewRiver
NewRiver Retail Limited is a REIT status specialist real estate investor and asset manager focusing solely on the UK retailing sector with a particular focus on food and value retailing. The management team, with over 100 years combined experience in the UK commercial property market, actively engages with retailers, stakeholders and consumers. With assets under management of £450 million comprising 24 UK wide shopping centres, 16 high street retail units and two supermarkets, in excess of 900 occupiers, a total of 3.6 million square feet, total annual footfall of over 92 million and an occupancy rate on its retail estate of 94 per cent. The Company's activities include active and entrepreneurial asset management and risk controlled development, utilising both its own balance sheet and co-investment joint venture structures. It is NewRiver's intention to become one of the leading sector-focused value-creating property investment businesses operating in the UK retail sector. The Company was founded in 2009 and its shares were admitted to London's AIM and Channel Islands Stock Exchange (CISX) in September of the same year. For more information on NewRiver, please visit www.nrr.co.uk
LVS is advised or managed by Pacific Investment Management Company LLC.
