Last checked at 5 Apr 2011 07:00
5 April 2011
NewRiver Retail Limited ("NewRiver" or "the Company")
Signing of MOU for refurbishment and development of The Forum Shopping Centre, Wallsend
Expansion of development activity within existing portfolio
NewRiver Retail Limited (AIM: NRR), the UK REIT specialising in value-creating retail property investment and active asset management, today announces the following update on its risk controlled development activities.
The Company has signed a Memorandum of Understanding (MOU) with North Tyneside Local Authority for a significant refurbishment and extension of The Forum Shopping Centre in Wallsend, Tyne & Weir.
The proposed redevelopment options include comprehensive refurbishment of the current shopping centre, a new 55,000 sq ft anchor food store and a further 65,000 sq ft of additional retail space that creates new and larger units. In conjunction with the local authority, which owns the key adjacent sites, NewRiver intends to create a new town centre that will draw a wider range of retailers and restaurant operators to the town.
It is the intention to secure a pre-let for the food store from a major retailer before commencing redevelopment and the Company has already initiated discussions with a number of major supermarket groups in this regard. NewRiver estimates that between 350 and 500 jobs will be created by the project which also enhances town centre car parking, upgrades the street landscaping and improves local transport connections. It is expected that a planning application will be submitted in the third quarter of 2011.
Additionally, in Bramley, Leeds, the Company has gained planning permission for a 10,000 sq ft extension to the main town centre retail scheme. In Fareham, Hampshire, planning permission has been granted for 25,500 of additional retail space. Shopping centre assets in East Ham, east London, Erdington, West Midlands and Market Deeping near Peterbrough are currently subject to pre planning consultation for refurbishment and extension, totalling 115,000 sq ft of new space. In Burgess Hill, West Sussex, a major 110,000 sq ft project is at pre-planning stage and discussions with food and non-food retailers regarding pre-lets are advancing well.
In Abingdon, Oxon, where NewRiver is advising Scottish Widows Investment Partnership (SWIP), the owner of the main Abbey Shopping Centre, The Vale of White Horse District Council, announced on 23 March 2011 that it had reached agreement for a planned £53 million redevelopment of the Abingdon Charter area and the Abbey Shopping Centre, in conjunction with SWIP. It is anticipated that, subject to planning permission, development will commence in 2013 and NewRiver will manage the entire development on behalf of SWIP.
In total, the Company is currently engaged in a significant risk-controlled development and refurbishment programme that, including joint-owned and managed shopping centres, extends to approximately 500,000 sq ft across eight separate centres throughout the UK. The Company believes that these projects - which are within the Company's existing income-producing portfolio and will be led by pre-leasing agreements - will generate significant value over the medium term.
Since December 2009, NewRiver has completed seven major acquisitions, totalling approximately £150m, making it one of the most active specialist UK REITS. The Company currently owns or manages a total of 1.3 million sq ft of retail space with more than 350 tenants. The Company's active asset management strategy has already resulted in approximately 50 positive leasing initiatives which have extended the portfolio's Weighted Average Lease length to 7.4 years and reduced total void rate to just 4.5 per cent at end March 2011.
The portfolio benefits from strong covenants with the largest ten tenants made up of leading retail groups New look, Wilkinson, Tesco, Superdrug, Peacocks, Co-operative Retail Services, Sainsbury's, TK Maxx, Next and Iceland. Other major tenants include Lidl, Argos, H Samuel and Bank.
The Company recently announced its first disposals as part of its strategy of recycling equity where significant returns can be crystallised.
NewRiver continues to be active in seeking further acquisitions focused on assets with food and value-led retailers, food anchored shopping centres and in-town large space retail units. The Company benefits from the support of two major banking relationships, Santander and HSBC, as well as from its joint venture with Morgan Stanley.
The Company expects to announce its financial results for twelve months ended 31 March 2011 on 1 June 2011. Key performance indicators are in line with market expectations.
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For further information
NewRiver Retail Limited Tel: 020 3328 5808
David Lockhart, Chief Executive
Pelham Bell Pottinger Tel: 020 7861 3232
David Rydell/Rosanne Perry
Cenkos Securities
Ian Soanes/Max Hartley Tel: 020 7397 8900
About NewRiver
NewRiver Retail Limited is a REIT status specialist real estate investor and asset manager focusing solely on the UK retailing sector with a particular focus on food and value retailing. The management team, led by David Lockhart, have more than 75 years' combined experience in UK commercial property markets. With more than £165 million of assets under management 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. It is NewRiver's intention to become one of the leading sector-focused value-creating property investment businesses operating in the UK retail sector. The Company was founded in 2009 and its shares were admitted to London's AIM and Channel Islands Stock Exchange (CISX) in September of the same year. For more information on NewRiver, please visit www.nrr.com