Last checked at 12 Sep 2019 07:00
NewRiver REIT plc
("NewRiver" or the "Company")
Acquisition of Poole Retail Park in a Joint Venture with BRAVO for £44.7 million
NewRiver is pleased to announce that its joint venture (the "JV") with BRAVO Strategies III LLC ("BRAVO") has exchanged contracts to acquire Poole Retail Park in Dorset, from LS Poole Retail Limited for total consideration of £44.7 million, reflecting a net initial yield of 8.0%.
NewRiver will hold a 10% interest in the asset (NRR share: £4.5 million) and NewRiver will benefit from 10% of the net rental income (NRR share: £0.4 million per annum). NewRiver will be appointed as asset manager, in return for a management fee calculated with reference to the gross rental income of the asset, and will also receive a promote based on financial performance.
The gross asset value subject to the transaction is £44.7 million and NewRiver's share of the transaction will be satisfied from existing resources and available credit facilities.
Poole Retail Park is located between the town centres of Poole and Bournemouth in Dorset, adjacent to the A35 and in close proximity to a large residential area. The fully-let retail park comprises 14 units offering 208,000 sq ft of retail space, with a tenant line-up including John Lewis at Home, DW Sports, Next Home, Homesense, Boots and Home Bargains, and a free car park providing 805 spaces. The asset currently has an attractive weighted average unexpired lease term of 6.7 years, an affordable average rent of £18.24 per sq ft and an average Rent to Sales ratio of 7.8%1. The acquisition provides a number of opportunities to extract further value and enhance income streams through active asset management and risk-controlled development, including the expansion and adaption of units to better meet the needs of current and prospective occupiers.
Including this acquisition, the JV established in May 2019 will have acquired £105.1 million of assets (NRR share: £34.7 million), reflecting a net initial yield of 9.0%.
Allan Lockhart, Chief Executive commented: "We are delighted to announce the acquisition of Poole Retail Park, demonstrating further progress with our strategies to deliver Underlying FFO growth, by recycling capital from lower-yielding assets into higher-yielding acquisitions, primarily through joint ventures. Acquiring through this JV ensures we can maximise our returns on capital deployed through the receipt of rental income, asset management fees and promotes, while maintaining a conservative balance sheet. Poole Retail Park is a high performing asset that benefits from a very convenient location and a strong and diverse tenant line-up, and presents a number of exciting opportunities to extract further value and higher rental income through active asset management and risk-controlled development."
1 Source: Rental affordability analysis undertaken by Harper Dennis Hobbs' Retail Consultancy team for NewRiver
For further information
NewRiver REIT plc | +44 (0)20 3328 5800 | ||
Allan Lockhart (Chief Executive) Mark Davies (Chief Financial Officer) | |||
Will Hobman (Head of Investor Relations & Strategy) |
Finsbury | +44 (0)20 7251 3801 | |||
Gordon Simpson James Thompson |
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About NewRiver
NewRiver REIT plc ('NewRiver') is a leading Real Estate Investment Trust specialising in buying, managing, developing and recycling convenience-led, community-focused retail and leisure assets throughout the UK.
Our £1.3 billion portfolio covers over 9 million sq ft and comprises 33 community shopping centres, 23 conveniently located retail parks and over 650 community pubs. Having hand-picked our assets since NewRiver was founded in 2009, we have deliberately focused on the fastest growing and most sustainable sub-sectors of the UK retail market, with grocery, convenience stores, value clothing, health & beauty and discounters forming the core of our retail portfolio. This focus, combined with our affordable rents and desirable locations, delivers sustainable and growing returns for our shareholders, while our active approach to asset management and in-built 1.9 million sq ft development pipeline provide further opportunities to extract value from our portfolio.
NewRiver has a Premium Listing on the Main Market of the London Stock Exchange (ticker: NRR) and is a constituent of the FTSE 250 and EPRA indices. Visit www.nrr.co.uk for further information.
LEI Number: 2138004GX1VAUMH66L31