Portfolio Update

RNS Number : 8620B

NewRiver Retail Limited

09 April 2013

 



NewRiver Retail Limited

("NewRiver" or "the Company")

Portfolio Update

Further to the Company's announcement of 26 March 2013, NewRiver Retail Limited (AIM and CISX: NRR), the UK REIT specialising in value-creating retail property investment and active asset management, announces the following portfolio update.

The Company has now entered its close period and will announce its Final Results for the year ended 31 March 2013 on 23 May 2013.

Disposal, refurbishment and letting agreements at The Piazza Shopping Centre, Paisley, Glasgow

A series of value enhancing asset management initiatives have recently been completed. Notably, Gilmore House, a vacant 45,000 sq ft office building located above The Piazza Shopping Centre in Paisley in Glasgow, has been sold for £850,000.

The Centre was one of four shopping centres acquired in August 2011. The vacant building has been sold to Freshstart Living, a specialist residential and student buy-to-let property investment company and will be converted to student accommodation for the University of West Scotland. As well as creating value and recycling equity, the sale increases NewRiver's net operating income by reducing non-recoverable void rates.

Additionally, NewRiver has signed a new 15-year lease with Iceland at an annual rent of £135,000 for a new 10,000 sq ft unit expected to open late summer 2013. NewRiver will amalgamate three vacant units to create the enlarged space and is currently on site carrying out the amalgamation works.

In addition the Company has signed a 10-year lease agreement for an enlarged unit of 7,500 sq ft for leading value-retailer Poundland at an annual rent of £115,000. To provide the additional space NewRiver relocated Carphone Warehouse to a vacant unit within the Centre on extended lease terms.

The conversion of the vacant office building to student accommodation and the new letting agreements will increase footfall to the Centre, enhance the retail offering and results in the Centre being virtually fully let.

Disposal of 35 High Street, Canterbury, Kent

NewRiver has completed the sale of its retail unit in Canterbury for £1.18 million to a private investment company. The sale price reflects a net initial yield of 6%.

The unit was acquired in 2010 for £850,000 as part of its joint-venture with Morgan Stanley. The property comprises a 3,200 sq ft prominent retail unit with frontage to pedestrianised High Street arranged over the basement, ground and upper ancillary floor.

Through its active asset management initiatives the Company negotiated a renewed lease with Jones the Bootmaker for a 10-year term from June 2011 at a passing rent of £75,000 pa. NewRiver also negotiated for the retailer to increase its occupation to include the vacant upper floor and thereby eliminating void costs to the Company.

Significant lettings and major redevelopment at the Forum Shopping Centre, Wallsend, Newcastle-upon-Tyne

NewRiver secured two significant pre-lettings as part of its active asset management strategy and will shortly commence its redevelopment programme for The Forum Shopping Centre. These plans comprise the re-modelling the adjacent former Co-operative store,  the development of three new retail units and the refurbishment of the existing centre.

NewRiver has signed an agreement with North Tyneside Council for a modern 50,000 sq ft library and community centre. The Council has signed a 30-year break-free lease agreement at an initial rent of approximately £363,000 per annum which will be subject to RPI increases. Additionally, the Company has signed a 10-year lease agreement with Home Bargains at a rent of £125,000 pa for one of the three new ground-floor retail units. Advanced legal negotiations with two other national retailers are underway to lease the final two units.

The development is anticipated to begin in May 2013 with the partial handover of the retail units expected in October 2013 and completion of the library and community centre anticipated in early 2014.

Updated planning approval for The Martlets, Burgess Hill, West Sussex

The project is one of the largest redevelopment operations being undertaken by NewRiver. Working in partnership with Mid-Sussex County Council, the vision is to create a major town centre revitalisation for the market town. The Company expects to submit a comprehensive master plan later this year to redevelop The Martlets which could include a new 50,000 sq ft food store, eight-screen cinema, 51,000 sq ft of new retail units, 70-room hotel, a circa 275-space car park together with a full refurbishment of the existing Centre. The Company is also currently in final negotiations to re-gear the head lease of the Centre with Mid-Sussex District Council.

Primark to open in Golden Square, Warrington, Cheshire

NewRiver commenced development in April to amalgamate two retail units within this important Wirral town to provide a single 56,000 sq ft unit for Europe's leading value-fashion retailer Primark. NewRiver signed a lease with Primark in November 2012 for a term of 25-years at an annual rent of £475,000. Completion is anticipated for late summer, marking the introduction of the first Primark store to Warrington.

Planning application awarded for Albert Square Shopping Centre, Widnes, Cheshire

NewRiver has been awarded planning consent to redevelop the vacant public house located adjacent to Albert Square Shopping Centre in Widnes which was acquired in 2010 as part of its joint venture with Morgan Stanley. The proposed plans comprise the demolition of the existing building and development of a new 10,000 sq ft retail unit. The Company is in advanced legal negotiations with a national value retailer. Development will commence upon completion of the pre-letting agreement.

Completion of the refurbishment of The Abbey Shopping Centre, Abingdon, Berkshire

NewRiver, as asset manager of the Abbey Shopping Centre for Scottish Widows Investment Partnership, has managed the extensive £3.7 million refurbishment and modernisation of the Centre through to completion. As part of the redevelopment NewRiver has constructed two new large retail units for which it is in advanced letting negotiations with leading retailers, has redesigned the Centre's entrance and frontage and is currently engaged in the rebranding of the Centre.

Updated master plan for Locksheath Shopping Village, Fareham, Hampshire

NewRiver, working in conjunction with Fareham Borough Council, is engaged in a public consultation exercise to improve the local area and introduce a new food store and leisure scheme. NewRiver has entered into detailed negotiations with a major food operator and expects to sign a pre-let in the coming weeks.

Submission of planning application for Central Square Shopping Centre, Erdington, Birmingham

NewRiver has submitted a detailed planning application for the development of a new 55,000 sq ft food store.  The proposed plans, prepared with the support of ASDA, comprise a 25,000 sq ft sales area, four new retail units totalling 8,000 sq ft and a 230-space car park.

Refurbishment and lease agreement signed with Nando's Leamington Spa

Following the recent acquisition of Regents Court Shopping Centre in December 2012 in its newly established joint venture with PIMCO, NewRiver has agreed a 15-year lease with Nando's to occupy two vacant shops totalling 3,200 sq ft at an annual rent of £70,000 pa. NewRiver has commenced the amalgamation works of the units with completion anticipated in late spring.

This new letting, combined with NewRiver's intention to submit planning application to further the provision of restaurant use in the Centre, accelerates the Company's strategy to transform the Centre into a restaurant destination in response to the high level of demand from restaurant operators.

Significant rent review for Tesco unit, Bramley, Leeds

NewRiver has completed the significant rent review of its 41,000 sq ft Tesco food store at its Shopping Centre in Bramley increasing the annual rent from £414,000 to £487,000.

Significant asset-management instruction on behalf of Zolfo Cooper

NewRiver was appointed as asset manager for two shopping centres, The Beacon Shopping Centre in North Shields, North Tyneside and Newkirkgate Shopping Centre in Leith, Edinburgh and one high street parade, La Porte Precinct in Grangemouth, Scotland, on behalf of administrator Zolfo Cooper.

On-going commercialisation

The Company continues to enhance its customer experience with the rollout of free wi-fi internet connectivity across the entire portfolio of shopping centres in May 2013. As part of its agreement with BSKYB, the provision of free wi-fi demonstrates NewRiver's recognition of the importance of enhancing multi-channel retail experience.

The company is also exploring various virtual shopping initiatives to extend the integration of the internet to increase dwell-time and benefit its retailers. NewRiver has undertaken further investment in customer convenience, experience and technology with the roll-out of Coca-Cola vending, Amazon Lockers installed in four of its centres, and the pilot of a bespoke brand partnership, "Greggs Week", at The Forum Shopping Centre in December 2012. The Company has also successfully launched a series of pop-up shops within the portfolio - further reducing voids.

David Lockhart, Chief Executive of NewRiver Retail, said: "NewRiver continues to identify opportunities to create and realise value in the resilient food and value-retail sectors. The two sales are clear examples of our ability to effectively recycle capital and enhance the value of our assets.

"The Company has achieved significant progress with its portfolio-wide risk controlled development programme and is engaged in a wide range of active asset management initiatives from single-unit lettings to major town centre redevelopment schemes. Initiatives such as the rollout of wi-fi within all our centres are further testament to NewRiver's determination to innovate the retail space and deliver the true value of retail.

"Importantly the Company continues to progress its occupancy rate, increase footfall and improve the customer experience - all of which increases the value of our growing asset base."

-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 94%. 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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