NewRiver Retail Limited
("NewRiver" or "the Company")
Acquisitions and Disposals Update
NewRiver Retail Limited (AIM: NRR), the UK REIT specialising in value-creating retail property investment, active asset management and development is pleased to announce progress on transactions totaling £180 million.
Since the beginning of July the Company has made excellent progress in the deployment of capital both individually and through its joint ventures with the completion of the acquisition of four shopping centres, a retail warehouse and former department store totalling £155.2 million. Furthermore the Company has demonstrated its commitment to recycle capital following the delivery of asset management initiatives through the sale of one shopping centre, a multi-let retail building and a retail unit totalling £25 million.
ACQUISITIONS TOTALLING £15.2 MILLION AT AN AVERAGE NET INITIAL YIELD OF 8.75%
Three Horseshoes Walk, Warminster
NewRiver has successfully completed the acquisition of the Three Horseshoes Walk Shopping Centre in Warminster, Wiltshire, from ASX listed property group Stockland for a total consideration of £9 million, reflecting a net initial yield of 9%. The shopping centre was acquired using existing cash resources ahead of introducing a new debt facility which is at an advanced stage.
Forming the principle part of the town's retail offer, the food, value and convenience-led shopping centre is a strategic acquisition in line with NewRiver's core portfolio. The 60,000 sq ft centre has a WALE of 4.8 years which is projected to deliver a leveraged cash return on equity for year one of 14%. With a high occupancy rate of 95%, the centre has a strong covenant of national retailers including Poundland, Iceland, Peacocks, Superdrug, Greggs and Costa.
NewRiver has identified a number of significant development and asset management opportunities, including the enhancement of the retail offer, the refurbishment of common areas and car park as well as partnering with the town council to improve community facilities.
119/121 Ferensway, Hull
NewRiver has acquired a prominent 49,000 sq ft former department store from Redevco for £1.92 million, reflecting a net initial yield of 6.3% and a low capital value per square foot of £39. The purchase is strategic and extends the Company's existing joint venture investment with Bravo (a fund advised or managed by Pacific Investment Management Company LLC) in Hull where it has in-depth occupational knowledge through its ownership of the Prospect Centre which is adjacent to the property. One of the largest retail spaces in Hull, the property is fully let to Poundland and Wings Chinese restaurant with a WALE of 9.4 years.
NewRiver has commenced an extensive programme of enhancement and reconfiguration works to create a new retail and leisure destination in the town centre. Hull was named UK City of Culture 2017 and will benefit from a multi-million investment programme.
Eastern Avenue, Retail Warehouse, Gloucester
The Company has acquired a 22,000 sq ft retail warehouse on Eastern Avenue, Gloucester, for £4.25 million reflecting a net initial yield of 8.3%. Let to Magnet and PC World, the retail warehouses are fully let with a WALE of 8.3 years. The asset benefits from excellent parking and is ideally located in a prominent roadside location.
The acquisition represents the Company's growing presence in the retail warehousing space following the acquisitions of four retail warehouses, part of the Linear portfolio, earlier this year for a total consideration of £17.3 million at a net initial yield of 9.1%.
DISPOSALS TOTALLING £6.5 MILLION
Guildhall Hill, Norwich
NewRiver completed the sale of a 44,000 sq ft multi-let retail building on Guildhall Hill in Norwich, let principally to Tesco, to Associated British Foods Pensions Trustees Limited for £6.2 million reflecting a yield of 6.7% resulting in an IRR of 18%.
Costa outlet, North Shields
NewRiver has sold a single vacant unit, previously occupied by Dorothy Perkins, that formed part of The Beacon Centre in North Shields which was acquired in December 2013. The vacant property was sold to a Costa Coffee franchisee for £325,000 which compares favourably to the apportioned entry price in December 2013 of £91,000.
COMPLETION OF RECENTLY ANNOUNCED EXCHANGE OF CONTRACTS TOTALLING £158.5 MILLION
Swallowtail Portfolio Completion
Following the Company's recent announcement of the exchange of contracts, the Company has completed the acquisition of a portfolio of three shopping centres, part of the Swallowtail Portfolio, for a total consideration of £140 million, reflecting a net initial yield of 8%.
The acquisition was acquired through the existing joint venture with Bravo II (a fund advised or managed by Pacific Investment Management Company LLC) and was funded using existing cash resources ahead of introducing a new debt-facility which is at an advanced stage.
This high performing portfolio comprises 758,000 sq ft of retail space and includes Priory Meadows in Hastings; The Avenue in Newton Mearns, Glasgow; and The Abbey Centre, Newtownabbey, Belfast.
With an annual footfall in excess of 15 million, this quality portfolio is let to 185 occupiers including major retailers such as Marks & Spencer, Asda, Primark, Next, Topshop, H&M and Poundland. The low average vacancy rate of 3.5% reflects the strong underlying retail sales performance of the portfolio.
Bramley Shopping Centre Completion
Following the Company's recent announcement of the exchange of contracts, the Company has completed the sale of Bramley Shopping Centre in Leeds, to Rockspring Property Investment Managers on behalf of Rockspring UK Value 2LP for £18.5 million reflecting a 7.2% yield on exit and an IRR of 13.5%.
NewRiver delivered on its active asset management strategy for the centre during its 4 year ownership completing 20 new lettings, lease re-gears and renewals with key retailers including The Co-Operative Pharmacy, The Post Office, Pizza Hut, Bright House and The Money Shop. NewRiver secured a 17% uplift in the rent review for the anchor Tesco supermarket and installed free income-generating Cloud wifi and an Amazon Locker.
Allan Lockhart, Property Director at NewRiver Retail said:
"The summer period has been another exciting and highly active period for NewRiver. We are delighted to have made excellent progress in deploying our shareholders capital into low risk profile assets that will deliver attractive long-term returns. Recycling of capital is an important objective of the Company and we are pleased to complete the sale of three assets that have delivered attractive returns through the completion of our active asset management programme."
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For further information:
NewRiver Retail Limited David Lockhart, Chief Executive Mark Davies, Finance Director |
Tel: 020 3328 5800 |
Bell Pottinger David Rydell/James Newman/David Bass |
Tel: 0203 772 2500 |
Liberum Tim Graham/Simon Atkinson/Jamie Richards |
Tel: 020 3100 2000 |
About NewRiver
NewRiver Retail Limited is an AIM listed REIT. The Company is a specialist real estate investor and asset manager focusing solely on UK retail 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. NewRiver Retail is the UK's third largest shopping centre owner by number with assets under management of approximately £740 million principally comprising 27 UK wide shopping centres, 17 high street assets, 1 supermarket, five retail warehouses and a portfolio of 202 public houses principally suitable for conversion to alternative uses. The portfolio has 1,302 occupiers, a total of over 5 million sq ft, total annual footfall of over 110 million and a retail occupancy rate of 95 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.
Founded in 2009, NewRiver has become the UK's leading retail-focused property investment business. The Company's shares were admitted to London's AIM in September of the same year. For more information on NewRiver, please visit www.nrr.co.uk
