(Alliance News) - Real estate investment trust NewRiver REIT PLC said Monday it acquired a Northern Ireland retail park for GBP40 million from London and Johannesburg-listed property peer Intu Properties PLC.
NewRiver bought the Sprucefield Retail Park in Lisburn for GBP40.0 million, equivalent to a net initial yield of 8.7%.
The park has 231,000 square foot of retail space as well as a 1,200 spaces car park and 18 acres of development land. The site has as its anchor tenants, the supermarket chain J Sainsbury PLC and do-it-yourself retailer B&Q - owned by Kingfisher PLC.
"We are pleased to announce that we have exchanged contracts to acquire Sprucefield Retail Park," NewRiver Chief Executive Officer Allan Lockhart said. "This high-quality asset will generate GBP3.7 million of annualised net property income, which will be highly accretive to underlying funds from operations and significant in improving our dividend cover, which is our key priority."
"In addition to an attractive long-term income return, the development land offers the opportunity to deliver significant capital growth, leading to a very attractive total return," Lockhart added.
Intu Chief Executive Officer Matthew Roberts said: "We announced our new strategy at the interim results in July. A key element of this is fixing the balance sheet which includes creating liquidity through disposals. We are pleased to conclude this transaction, which along with the part-disposal of intu Derby and other sundry asset sales in 2019 brings the year to date disposals total to GBP268 million."
Shares in Intu were 0.6% higher at ZAR7.23 in Johannesburg on Monday. In London, shares has not begun trading for either firm but closed at 38.70 pence for Intu and 179.60p for NewRiver on Friday.
By Ahren Lester; ahrenlester@alliancenews.com
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