Acquisition

RNS Number : 1389N

NewRiver Retail Limited

07 June 2010

 



NewRiver Retail Ltd

("NewRiver" or "the Company")

Portfolio Acquisition

NewRiver Retail Limited, the specialist value-creating retail property investment and asset management company, is pleased to announce that it has exchanged contracts to acquire a portfolio of six long leasehold UK retail assets for a total consideration of £19.01 million.  The assets have been acquired off market from REDEVCO, one of Europe's largest retail real estate managers, and the purchase price reflects a net initial yield of circa. 7.75%.

The portfolio comprises six large space retail units located within the core trading locations of well established and successful retailing towns/cities, the majority of which are in the south east of England.  In total the portfolio comprises 308,400 sqft and the individual retail properties are let to three national multiple retailers: Wilkinson Hardware Stores Ltd (48% of net rental income), TJ Hughes Ltd (36% of net rental income) and New Look Retailers Ltd (16% of net rental income).

The average rent across the portfolio equates to £6.21 psf and based on the purchase price, the average capital value is £61.65 psf. 

The portfolio properties are as follows: -

Location	Net Lettable Area (sq ft)	Key Retail Tenant
Basingstoke, 4 Loddon Mall	23,100	Wilkinson
Canterbury, 17 St Georges St	26,800	Wilkinson
Glasgow, 127-135 Trongate	150,400	TJ Hughes
Harlow, 39 The Broadwalk	26,400	New Look
Poole, 97a Dolphin Centre	34,700	Wilkinson
Romford, 25/29 Market Place	47,000 308,400	TJ Hughes

A debt facility has been put in place with Santander at 65% of the purchase price.

Allan Lockhart, Property Director of NewRiver Capital Ltd, said:

"We are delighted with this acquisition which fully accords with the NewRiver investment strategy. There are a number of attractive features within this portfolio including the excellent income security that an unexpired lease term average of 12.6 years provides; current rental levels are very modest, offering excellent prospects of rental growth and each of the properties offers identifiable capital value enhancement opportunities, from releasing significant marriage value from lease extensions to re-gearing the leases with the freeholders through to redevelopment.

Given the attractive net initial yield of this portfolio, the annual cash on equity returns are 14% and with the identifiable capital value enhancement opportunities, we are confident that this acquisition will exceed NewRiver's minimum total return target of 15%. This acquisition demonstrates NewRiver's continuing ability to source attractive deals that compliment the Company's disciplined and well researched investment strategy."

ends

For further information:

NewRiver Retail Limited

Serena Tremlett                                                                                                               Tel: [phone]

NewRiver Capital Limited                                                                           

David Lockhart                                                                                                                  Tel: [phone]

Cenkos Securities                                                                                                           

Ian Soanes

Max Hartley                                                                                                                       Tel: [phone]

Pelham Bell Pottinger                                                                                                   Tel: [phone]

David Rydell

Rosanne Perry

About NewRiver

NewRiver Retail Limited is a specialist real estate investor and asset manager with a particular focus on the UK retail sector. NewRiver Retail is advised on property matters by its wholly-owned subsidiary, NewRiver Capital Limited, whose management team, led by David Lockhart, have more than 50 years' combined experience in UK commercial property markets. 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.newriverretail.com and www.newrivercapital.co.uk 

 

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