NewRiver REIT plc
("NewRiver" or the "Company")
Contracts exchanged to acquire remaining 50% share in BRAVO JVs
Further to the Company's Proposed Capital Raising announcement released on 15 June 2017, NewRiver is pleased to announce that it has now exchanged conditional contracts to acquire the remaining 50% share in its BRAVO Joint Ventures from subsidiaries of BRAVO II for a cash consideration of £59.4 million. The transaction allows NewRiver to gain control over 4 convenience-led shopping centre assets in Belfast, Glasgow, Hastings and Middlesbrough with a total gross asset value of £240 million, representing a topped up net initial yield of 7.3%.
The BRAVO Joint Ventures generated net rental income of approximately £16.5 million for the financial year-ended 31 December 2016 and had net assets of approximately £120.8 million (of which the Group's share was approximately £60.4 million) as at 31 December 2016. They have indebtedness of approximately £120 million outstanding which the Company intends to remain in place and bring onto its own balance sheet following completion of the acquisition.
The acquisition is conditional on obtaining funding which the Company intends to be satisfied by means of £59.4 million of the net proceeds of the capital raising announced on 15 June 2017 and the obtaining of the consent of the BRAVO Joint Ventures' secured lenders to the acquisition to the extent required, in each case, being satisfied by no later than 31 July 2017.
David Lockhart, Chief Executive commented: "Following the recent announcement of our over-subscribed equity raise, I am pleased to report that we have now exchanged contracts to acquire the remaining units in our BRAVO JV, meaning that post completion we will own the 4 convenience-led shopping centre assets in full.
We are very familiar with the BRAVO assets with a clear understanding of their growth potential, having been responsible for their day to day asset management since the joint venture was established in 2013. Given the investment made into the BRAVO assets to date, we are confident that this acquisition will produce attractive long term returns for our shareholders."
Key transaction terms
· Prior to the acquisition, the Company owned 50% of the units in the BRAVO Joint Ventures, being the NewRiver Retail Property Unit Trust No.2, the NewRiver Retail Property Unit Trust No.5, the NewRiver Retail Property Unit Trust No.6 and the NewRiver Retail Property Unit Trust No.7.
· The Joint Ventures hold shopping centre assets in Belfast, Glasgow, Hastings and Middlesbrough which were acquired off-market in 2013 and 2014.
· The Company has exchanged contracts in an off-market transaction to acquire the remaining 50% of the units in the BRAVO Joint Ventures for total consideration of £59.4 million.
· The assets acquired in the transaction have a gross asset value of £240 million representing a net initial yield of 7.3%.
· The transaction is structured as the acquisition of the remaining 50% of the units of the joint venture vehicles, and will involve transferring £121.2 million of gross debt onto the Company's consolidated balance sheet.
Financial impact
· The transaction is expected to increase Funds From Operations ("FFO") in the year to March 2018 by £4.2 million, with a £5.4 million increase in net rental income and a £1.2 million increase in net finance costs. The transaction is expected to generate additional annualised accounting net rental income of £8.3 million.
· On a proforma basis, NewRiver's proportionally consolidated LTV will remain in line with March 2017 at 37% and the proportionally consolidated cost of debt will reduce by 9 bps.
Overview of assets
The Abbey Centre, Newtownabbey, Belfast (NewRiver Retail Property Unit Trust No.6)
· 320,000 sq ft shopping centre located 6 miles north of Belfast providing a convenient alternative to city centre shopping.
· The centre has 3 anchor stores; a 44,000 sq ft Next flagship store completed in December 2016, a 35,000 sq ft Dunnes flagship store handed over to Dunnes in June 2017 and a 17,000 sq ft Primark store.
· The occupier line-up also includes a 15,000 sq ft New Look unit opened on 8 June 2017 and a Nandos unit opened on 20 April 2017 as part of the ongoing re-development of the food court area.
The Avenue Shopping Centre, Newton Mearns, Glasgow (NewRiver Retail Property Unit Trust No.7)
· 202,000 sq ft shopping centre located in an affluent suburb of Glasgow.
· Anchored by a 102,000 sq ft Asda foodstore with an occupier line-up featuring M&S Simply Food and Boots.
Priory Meadow Shopping Centre, Hastings (NewRiver Retail Property Unit Trust No.5)
· 290,000 sq ft shopping centre located in the heart of Hastings, in close proximity to Hastings train station and featuring a 1,000 space car park.
· Anchored by a 43,000 sq ft Marks & Spencer store with an occupier line-up including Poundland, Boots and H&M.
Hillstreet Shopping Centre, Middlesbrough (NewRiver Retail Property Unit Trust No.2)
· 240,000 sq ft shopping centre located in the heart of Middlesbrough.
· Anchored by a 62,000 sq ft Primark store with an occupier line-up including Argos, Sports Direct and Poundworld.
· The Tees Valley devolution deal and the direct London trains due by 2020 has given the Council and the region new impetus and the Company has been working in partnership with them on a number of schemes, including a new passenger transport interchange, leisure, hotel, restaurants, a college and digital media innovation centre located adjacent to Hillstreet Shopping Centre.
For further information
NewRiver REIT plc +44 (0)20 3328 5800
David Lockhart (Chief Executive)
Mark Davies (Chief Financial Officer)
Will Hobman (Head of Investor Relations)
Bell Pottinger +44 (0)20 3772 2500
David Rydell
David Bass
Eve Kirmatzis
About NewRiver
NewRiver REIT plc (ticker: NRR) is a premium listed REIT on the London Stock Exchange and a constituent of the FTSE 250 and EPRA indices. The Company is a specialist real estate investor, asset manager and developer focused solely on the UK retail and leisure sector.
Founded in 2009, NewRiver is one of the UK's largest owner/managers of convenience-led shopping centres with assets under management of £1.3 billion principally comprising 33 UK wide shopping centres together with further nationwide retail and leisure assets. The portfolio totals over 8 million sq. ft. with over 2,000 occupiers, an annual footfall of 150 million and a retail occupancy rate of 97 per cent.
Visit www.nrr.co.uk for further information. LEI number: 2138004GX1VAUMH66L31
