NewRiver Regulatory News (NRR)

NewRiver Retail Limited

("NewRiver" or "the Company")

Acquisition of Sands Portfolio

for £19 million, reflecting net initial yield of 9.75%

NewRiver Retail Limited (AIM: NRR), the UK REIT specialising in value-creating retail property investment and active asset management, announces it has completed contracts for the acquisition of the Sands Portfolio, which includes the Arndale Shopping Centre in Morecambe and five UK High Street assets (the "Portfolio"), for a total consideration of £19 million, equating to a net initial yield of just under 9.75%. NewRiver has completed the acquisition of the portfolio using existing cash resources.

Individually, the assets were last traded between 2005 and 2007 for a combined total of £40 million and the sale to NewRiver at £19 million is as a result of a distressed debt situation.

In total, the portfolio comprises 141,000 sq ft and benefits from a high occupancy of 95%.

The Arndale Shopping Centre, acquired for £14 million reflecting a net initial yield of 9%, is the largest asset, providing the principle retail destination in Morecambe, Lancashire, the busy North West coastal town recognised as a key tourist and community-led shopping destination attracting 3.3 million day trip visitors per annum.

This centre includes 40 retail units comprising 107,300 sq ft of lettable space and is underpinned by a strong income stream with a WALE of 9.3 years. A value and convenience-led shopping centre, 85% of the rent is secured against a strong covenant of occupiers, including Poundland, Boots, Iceland, Argos, Travelodge, Halifax, Greggs and a 16,772 sq ft Tesco Metro.

The five high yielding High Street retail assets provide quality retail covenants, located nationally in Rugby, Nuneaton, Spalding, Blackpool and Perth. The five High Street assets in total comprise 33,800 sq ft and have been purchased for £5 million at a blended net initial yield of 12.2%. Retailers within the High Street portfolio include: Boots, McDonalds, Halifax, Monsoon and Top Shop.

The acquisition delivers on NewRiver's strategy of investing in convenience led Community Shopping Centres and High Street retail assets with stable income streams and opportunities to create significant value. NewRiver has identified a number of asset management opportunities across the Sands Portfolio to enhance value through refurbishment, re branding and improvement to retailer mix.

Allan Lockhart, Property Director at NewRiver Retail, said:

"Following another highly active year for NewRiver, we are pleased to continue to deliver on our careful stock selection and active acquisition strategy by acquiring the Arndale Shopping Centre in Morecambe and five nationally located High Street assets at an attractive price reflecting a NIY of 9.75%."

"The Arndale Shopping Centre offers excellent value-enhancing opportunities having been impaired by a lack of investment for a number of years owing to the financial position of the previous owner. We are committed to improving the shopping centre with our plans to invest fresh capital and work closely with Lancaster City Council. We have identified a number of active asset management initiatives, including attracting new occupiers for an improved retail mix, a centre rebrand and refurbishment, together with improvements to the adjoining public realm, all of which will drive increased footfall and dwell time."

For further information

About NewRiver

NewRiver Retail Limited is an AIM listed REIT. The Company is a specialist real estate investor and asset manager focused solely on UK retail with a particular focus on food and value retailing. NewRiver Retail was named Property Company of the Year - Retail & Leisure at the Estates Gazette Awards at the close of 2014. 

The management team, with over 100 years combined experience in the UK commercial property market, actively engages with retailers, stakeholders and consumers. NewRiver Retail is one of the UK's largest shopping centre owner/managers with assets under management of approximately £767 million principally comprising 28 UK wide shopping centres, further nationwide retail assets and a portfolio of 202 public houses principally suitable for conversion to alternative uses. The portfolio has 1,280 occupiers, a total of over 5 million sq ft, total annual footfall of over 110 million and a retail occupancy rate of 96 per cent. 

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.

Founded in 2009, NewRiver has become the UK's leading retail-focused property investment business. The Company's shares were admitted to London's AIM in September of the same year. For more information on NewRiver, please visit www.nrr.co.uk.