Acquisition of ?34.3m shopping centre portfolio

RNS Number : 1291U

NewRiver Retail Limited

28 November 2013

 



NewRiver Retail Limited

("NewRiver" or "the Company")

Acquisition of retail centres in Llanelli and Oxford for £34.3m

NewRiver Retail Limited (AIM: NRR), the UK REIT specialising in value-creating retail property investment and active asset management, announces that it has exchanged conditional contracts to acquire the St. Elli centre in Llanelli, Carmarthenshire, and Gloucester Green in Oxford for a total sum of £34.3 million equating to a net initial yield of 7.78% from insurance group Axa.

The acquisition is being funded through the Company's joint venture with the BRAVO II partnership (a fund advised or managed by Pacific Investment Management Company LLC). Both parties are taking a 50 per cent equity stake in the acquisition and the joint venture will benefit from attractive income returns.

The St. Elli shopping centre, a covered 160,000 sq ft centre at the heart of Welsh market town Llanelli, has been acquired on a predominantly freehold basis for £29.2 million, reflecting a net initial yield of 7.5%. The centre is anchored by a 70,000 sq ft Asda supermarket. Other national retailers trading in the centre include: Argos, Poundland, Sports Direct and Wilkinson.

The centre benefits from a high occupancy rate of 98% and offers 450 car park spaces. The centre has an attractive WALE of 12.7 years, with Asda having an unexpired lease term of 18.5 years and representing 53.1% of the annual total rent. As well as the attractive income yield, a number of significant asset management initiatives have been identified which the Company believes will deliver long term benefits to shareholders.

In Oxford, NewRiver has agreed to acquire the long leasehold Gloucester Green centre for £5.1 million, reflecting an initial yield of 9.6%. The acquisition is conditional on the freeholder, the local authority Oxford City Council, assigning the ground lease in due course.

The centre, which is located in the heart of Oxford city centre, is an open, single level shopping complex comprising 12,000 sq ft of retail with a long-leasehold interest in the residential above. The centre benefits from high footfall owing to its regular popular market use and proximity to Oxford's principal bus station, national restaurants and cinema.

The Company believes Gloucester Green has significant value-enhancing potential arising from a range of asset management initiatives with a particular focus on increasing the restaurant provision. Initiatives also include increasing the promotional income through better use of the large market square within the centre. Furthermore, the Company believes that the centre offers medium term potential for development in conjunction with Oxford City Council which has significant adjoining land holdings.

The acquisition supports the Company's stated intention to efficiently deploy the proceeds of its oversubscribed £67 million equity fundraise, completed in July 2013.

Allan Lockhart, Property Director of NewRiver Retail, said:

"We are very pleased to have acquired a high performing major food anchored shopping centre and a key retail asset in one the UK's strongest economic cities. Both assets will provide NewRiver with sustainable and attractive cash on equity returns with excellent prospects for capital returns through pre identified asset and development management initiatives."

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For further information

NewRiver Retail Limited  David Lockhart, Chief Executive Mark Davies, Finance Director	Tel: [phone]
Pelham Bell Pottinger David Rydell/Guy Scarborough/Charlotte Offredi	Tel: [phone]
Cenkos Securities Max Hartley/Ian Soanes	Tel: [phone]
Liberum Capital Shane Le Prevost/Tim Graham	Tel: [phone]

About NewRiver

NewRiver Retail is a specialist Aim listed REIT focused solely on the UK food and value retail market and is fast-becoming the leading value-creating property investment platform in the sector.

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 fourth largest Shopping Centre owner by number with assets under management of £440 million comprising 24 UK wide shopping centres, 16 high street retail units and two supermarkets. The portfolio has in excess of 950 occupiers, a total of 3.8 million square feet, total annual footfall of over 105 million and an occupancy rate of 96 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

BRAVO II is a fund advised or managed by Pacific Investment Management Company LLC

 

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