Pre-sale of residential units in Burgess Hill
NewRiver REIT plc
("NewRiver" or the "Company")
Contracts exchanged for pre-sale of residential units in Burgess Hill
NewRiver is pleased to announce that it has exchanged conditional contracts for the pre-sale of the entire residential element of its major mixed-use regeneration of Burgess Hill town centre.
Delph Property Group, a well-established family run residential investment company, has agreed to purchase all 142 residential units for £34 million. This residential pre-sale, together with the pre-lets already secured on the retail & leisure element of the scheme, significantly de-risks the redevelopment which has projected construction costs of £47 million. Under the terms of the pre-sale agreement, 10% of the total consideration was placed in escrow at exchange, and a further 20% will be placed in escrow ahead of the commencement of construction, with the balance remitted to the Company on completion in 2020.
Simultaneously, NewRiver also exchanged on the Agreement for Lease with Mid Sussex District Council for a new Head Lease of the shopping centre, which is another important milestone for the redevelopment. As a consequence of this activity, and in line with its risk-controlled development approach, the Company expects to begin its phased programme of works imminently.
NewRiver acquired the 123,000 sq ft Martlets Shopping Centre in Burgess Hill in November 2010 for £12 million, representing a net initial yield of 8.5%. Burgess Hill is an affluent catchment area located within the 'Gatwick Diamond', just 20 minutes from Gatwick Airport and 50 minutes by train to central London.
NewRiver received full detailed planning consent for the mixed-use regeneration of Burgess Hill town centre in March 2016. The 465,000 sq ft redevelopment of the existing shopping centre forms a key element of NewRiver's 1.9 million sq ft risk-controlled development pipeline which the Company believes will be a key driver of long term returns for its shareholders, and is in line with the Company's strategy to redevelop existing assets within the portfolio where appropriate.
As well as 142 new residential units, the redevelopment will provide a 10-screen multiplex cinema, a 63-bed hotel, an improved retail offer and new restaurant and leisure provisions, additional car park spaces, an improved public realm and a new purpose-built library for the Council. The retail & leisure element of the scheme is already 50% pre-let, with high quality and long dated income secured from Cineworld, Nandos, Next, Travelodge and Wildwood.
Allan Lockhart, Property Director, NewRiver commented: "The pre-sale of the entire residential component of our Burgess Hill redevelopment to a high quality residential specialist investor significantly de-risks the project and, in-line with our risk-controlled approach, puts us in a strong position to begin construction.
Having recently received planning consent for our major mixed-use regeneration in Cowley, Oxford, we are seeing real momentum in our risk-controlled development pipeline, which we are confident will be a significant driver of long term returns for our shareholders."
Nicholas Belkin, Head of Acquisitions, Delph Property Group commented: "We are excited to be involved in the Burgess Hill regeneration story with NewRiver as it continues to show our firm financial commitment to residential acquisitions throughout the UK."
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
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 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
This information is provided by RNS
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