Last checked at 24 Mar 2015 07:00
NewRiver Retail Limited
("NewRiver" or "the Company")
NewRiver announces £23.8 million of transactions
Three acquisitions totalling £18.26 million at an average net initial yield of 8.7%,
and three disposals totalling £5.53 million at an average net initial yield of 7.3%
NewRiver Retail Limited (AIM: NRR), the UK REIT specialising in value-creating retail property investment, active asset management and development announces three acquisitions totalling £18.26 million and three disposals totalling £5.53 million.
The Company continues to actively deploy capital in line with its strategic objectives through the acquisition of one major retail and leisure park and two separate retail warehouse investments. Furthermore, the Company has demonstrated its commitment to recycling capital with the sale of three retail units following the successful delivery of key asset management initiatives.
ACQUISITIONS TOTALLING £18.26 MILLION AT AN AVERAGE NET INITIAL YIELD OF 8.7%
Lower Audley Street Retail Park, Blackburn
NewRiver has successfully completed the acquisition of Lower Audley Street Retail Park, Blackburn from a private property company for a total consideration of £14.6 million, reflecting a net initial yield of 8.85%.
Located within the town's core retail warehouse provision, the retail park comprises 114,000 sq. ft. of retail and leisure space and a 403 space car park, and trades adjacent to major national retailers including ASDA, B&Q, TK Maxx, Matalan and Next.
The retail park itself offers an extensive range of food, fashion, electronics, home and leisure outlets including B&M, Maplin, Mothercare, Halfords, Burger King, Chiquitos, Frankie & Benny's and the town's only enclosed ice rink.
With 100% occupancy, the park will provide NewRiver with attractive cash on cash returns underpinned by a solid income stream, with affordable rents ranging from £6 per sq. ft. to £12 per sq. ft. and a weighted average lease to expiry ("WALE") of 5.35 years.
NewRiver has identified a range of asset management opportunities to enhance the capital value by improving the retail offer, potential for retail extensions and restaurant pods and improving the income security length through lease re-gears.
Sealand Road, Chester
NewRiver has acquired the freehold interest of a 10,591 sq ft retail unit let to Staples from a local authority pension fund for £2.1 million, reflecting a net initial yield of 8.24%. Staples has a 25 year lease on the unit expiring in 2017 at a rent of £183,000 pa.
The unit is ideally located 1.2 miles north west of Chester City Centre, and is adjacent to Chester's principal retail park which is anchored by John Lewis at Home. The Staples unit, as well as benefiiting from a 40 space car park, comes with open A1 planning consent. NewRiver has the option to either redevelop to provide three smaller units or to re gear the existing lease with Staples.
Great Eastern Square, Felixstowe
NewRiver has acquired Felixstowe's only retail warehouse unit, a 17,180 sq. ft. unit let to Homebase with 5.75 years remaining on the lease, from a private investment company for £1.56 million reflecting a net initial yield of 7.84%.
Located in the heart of the seaside town of Felixstowe, Suffolk and providing the principal retail offer for the surrounding area, Great Eastern Square is situated in a prominent position close to the town centre and opposite a large Co-operative food store.
NewRiver has identified opportunities to add value through widening of the planning consent to allow a broader range of retail uses and given the passing rent equates to a modest £7.50 per sq ft, the property offers realistic prospects of rental growth.
DISPOSALS TOTALLING £5.53 MILLION AT AN AVERAGE NET INITIAL YIELD OF 7.3%
97 Dolphin Shopping Centre, Poole
NewRiver has completed the sale of a 34,705 sq. ft. retail unit within the Dolphin shopping centre in Poole, let to Wilkinsons, to Legal and General for £2.3 million reflecting a yield of 7.27% resulting in an IRR of 15.5% since acquisition in 2010.
Halfords, Paisley
NewRiver has sold a 20,100 sq. ft. unit, occupied by Halfords, for £1.8 million, at a net initial yield of 8.44% to a private investor reflecting a levered profit on cost of 56%. The Company acquired the Unit as part of the Linear portfolio in June 2014 for £1.4 million at a net initial yield of 10.93%.
40 Fishergate, Preston
The Company completed the sale of a 10,000 sq. ft. former HSBC bank in Preston for £1.43 million to a private investor at a yield of 5.96%.
NewRiver acquired the freehold of the former bank in April 2014 for £0.7 million and subsequently secured planning consent to convert the building to a city centre convenience store which the Company simultaneously pre-let to J Sainsbury on a 15 year lease. The sale reflects an attractive profit for the Company, which after accounting for £0.3 million of capital expenditure, results in an unlevered profit on cost of 45%.
Allan Lockhart, Property Director at NewRiver Retail said:
"As we approach our 31st March year end, we are pleased to complete these opportunistic purchases at a blended yield of 8.7% extending our selective investment into the retail warehouse sector. During our financial year we have deployed our shareholders' capital into a total of £332 million of acquisitions of which 89% have been shopping centres and we have disposed of £40.2 million of assets. We remain committed to recycling assets following completion of our asset management strategies with all of the asset sales announced today, sold at a blended yield of 7.3%, delivering attractive financial returns."
For further information
NewRiver Retail Limited David Lockhart, Chief Executive Mark Davies, Finance Director
| Tel: 020 3328 5800 |
Bell Pottinger David Rydell/David Bass/James Newman
| Tel: 020 3772 2500 |
Liberum Richard Crawley/Jamie Richards | Tel: 020 3100 2000 |
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 £811 million principally comprising 29 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 1,384 occupiers, a total of over 5.4 million sq ft, total annual footfall of over 122 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.