Major portfolio acquisition and creation of JV

RNS Number : 9345T

NewRiver Retail Limited

19 December 2012

 



NewRiver Retail Limited

("NewRiver" or "the Company")

Creation of Joint Venture with LVS Luxembourg IV Sarl ("LVS"), a subsidiary of PIMCO BRAVO Fund, L.P.

Joint Venture conditionally exchanges contracts for first acquisition:
£85 million UK wide major shopping centre portfolio at 9.7% net initial yield

Placing of NewRiver shares with LVS to take an 8.7% equity stake

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 entered into a new joint venture with LVS (the "Joint Venture").

NewRiver has invested in a 10% interest in the Joint Venture with the remaining 90% invested by LVS. The Joint Venture has conditionally exchanged contracts to acquire a major retail portfolio of five UK shopping centres from Zurich Assurance Limited for a total consideration of £85 million (the "Acquisition"). 

Highlights of the Joint Venture and Acquisition:

Joint Venture

§ Joint Venture established with LVS to be named the NewRiver Retail Property Unit Trust                                                                                   

§ NewRiver will own 10% of the Joint Venture's first acquisition and up to 50% of any future acquisitions

§ NewRiver will receive asset management fees, its share of recurring earnings and incentivised promote fees

§ LVS will subscribe for 2.95 million new Ordinary Shares in the Company and become an important shareholder with an 8.7% equity stake

Acquisition

§ A portfolio of five UK shopping centres comprising three freehold and two long-leasehold shopping centres located in Leamington Spa, Cowley, Kilmarnock, Bridlington and Hull at an attractive net initial yield of 9.7%

§ Total lettable area of circa 1 million sq ft

§ 205 tenancies providing good income diversification and sustainable rental income

§ Annual footfall in excess of 21.5 million

§ Key tenants include leading covenants such as BHS, Boots, Sainsbury's, Poundland and Wilkinson

§ Significant asset management and development opportunities identified

§ Weighted Average Lease Expiry of 8.1 years

§ Senior debt provided by Santander and HSBC

§ Acquisition will be accretive to EPRA recurring earnings and EPRA earnings per share in the first full financial year

The Acquisition will be made through a newly created co-investment joint venture between NewRiver and LVS, to be named the NewRiver Retail Property Unit Trust. LVS will provide 90% of the equity simultaneously and as a condition of the transaction subscribe for 2.95 million new Ordinary Shares in NewRiver, representing an interest of 8.7% in the enlarged share capital of the Company.

NewRiver will invest the proceeds from the new share issue to provide the remaining 10% of the total equity for the Acquisition. The subscription of new Ordinary Shares by LVS will be at a price of 165 pence per share which is a discount of 10.8% to the average closing share price on the 20 days prior to 19 October 2012, the date the heads of terms with LVS were signed.

In line with the Company's core strategy of active asset management, NewRiver has also identified a significant level of value-enhancing opportunities across the portfolio. Subject to completion, NewRiver will receive a projected annual fee of approximately £0.4m for management of the assets being acquired by the Joint Venture.  Taken together with NewRiver's share of the net rental income, the transaction is expected to lead to a significant projected increase in EPRA recurring earnings and an increase in EPRA earnings per share in the first full financial year. Accordingly the Company believes that the transaction is in the long term interests of the shareholders as a whole.

Applications are being made to the London Stock Exchange and to the Daily Official List of the Channel Islands Stock Exchange ("CISX") for the Company's enlarged share capital to be admitted to trading on AIM and CISX.  It is expected that Admission will become effective and dealings will commence at 8.00 a.m. on 21 December 2012. The 2.95 million Ordinary Shares will be issued free of all liens, charges and encumbrances and will, upon Admission, rank pari passu in all respects with the existing Ordinary Shares including as regards the right to receive all dividends or other distributions declared, made or paid after Admission.

-Ends-

For further information

NewRiver Retail Limited  David Lockhart, Chief Executive Mark Davies, Finance Director	Tel: [phone]
Pelham Bell Pottinger David Rydell/Guy Scarborough	Tel: [phone]
Cenkos Securities Ian Soanes/Max Hartley	Tel: [phone]
Investec Bank plc Garry Levin/David Anderson	Tel: [phone]

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 £400 million comprising 23 UK wide shopping centres, 16 high street retail units and two supermarkets, the portfolio has 732 occupiers, a total of 2.8 million square feet, total annual footfall of over 65 million and an occupancy rate on its retail estate of 96%. 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 

 

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