TIDMNRR
RNS Number : 7333M
NewRiver Retail Limited
22 August 2011
NewRiver Retail Limited
("NewRiver" or "the Company")
Portfolio Update
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 portfolio
activities.
Acquisition of The Sovereign Centre, Boscombe
The Company is pleased to announce that it has completed the
acquisition of the long leasehold interest of The Sovereign
Shopping Centre, Boscombe. The property is being acquired from UBS
Global Asset Management (UK) Ltd for a total consideration of
GBP12.0 million, funded through a mixture of cash and debt,
reflecting a net initial yield of circa. 9.6%. The shopping centre
provides approximately 86,000 sqft of retailing space anchored by
Sports Direct, Poundland, Peacocks, 99p Stores and New Look
together with direct links into adjoining anchor tenants Wilkinson,
Lidl and Boots.
Boscombe is a busy Bournemouth district centre with consistent
year on year footfall of over 6 million people. The Sovereign
Centre is located close to the town's principal bus station and
includes a 620 space car park. The Centre links directly into
Christchurch Road, the pedestrianised retail thoroughfare.
In total there are 48 tenancies and the current gross rent roll
is GBP1.6 million per annum with an average weighted unexpired
lease length of 10.7 years. 64% of the income, including the car
park is secured to non-discretionary retail traders offering
defensive characteristics.
Management believe that this is an excellent fit with NewRiver's
investment strategy of targeting food and value anchored district
centres, with low occupational costs, stable cashflows and
identified development and value creating opportunities.
Acquisition of 23-24 Market Place, Great Yarmouth
The Company has recently completed the purchase of 23-24 Market
Place, Great Yarmouth for a total consideration of GBP2.5 million.
The property, which is located in a prime retailing position, has a
total gross internal area of 41,280 sqft. Based on NewRiver's
purchase price the capital value per sqft is GBP60.56 which is
below replacement cost.
The property was let to Life & Style Retail Ltd at
GBP200,000 per annum, although they are currently in administration
and no longer trading from the premises. Simultaneously with the
purchase, an agreement for lease was negotiated with Poundland for
a new 10 year lease at GBP295,000 per annum, reflecting a net
initial yield on purchase costs of 11.2%. The purchase has been
funded with cash and once a debt facility has been arranged the
cash on cash return is estimated to be 45% per annum.
This is an opportunistic purchase enabling value creation from
day one through the Company's excellent relationship with
Poundland. It fits with the Company's investment strategy of
targeting retail properties where the predominant tenant profile is
from value retailers occupying "big box" space. Furthermore, this
acquisition is highly profitable and will provide an attractive
annual cash on equity return.
Disposal of 41 George Street, Canterbury
The Company has completed the sale of 41 George Street,
Canterbury to a private client of Henderson Global Investors, for a
total consideration of GBP5.0 million, reflecting an exit yield of
6.3%. The property was the lowest yielding investment in the
REDEVCO portfolio acquired in May 2010 and is currently let to
Wilkinson. NewRiver successfully increased the rent at review
following a full store refit and branding.
The sale yielded a profit over the original purchase price and
also exceeds the most recent valuation of 31 March 2011. It
delivered a geared IRR of 16% and the cash realised will be
recycled into new high yielding, value creating opportunities.
Appointment as development and asset manager for The Market
Centre Crewe by Scottish Widows Investment Partnership (SWIP)
NewRiver is delighted to announce that the Company has been
appointed by SWIP as the development manager on The Market Centre,
Crewe. The partially covered shopping centre provides 155,000 sq ft
of retail accommodation in 25 units and benfits from a 290 space
surface car park. This further extends NewRiver's relationship with
SWIP, as the Company also advises on asset management and
development at Abbey Shopping Centre in Abingdon, Oxon.
Property Director of NewRiver, Allan Lockhart said:
"The transactions announced today demonstrate the capabilities
of NewRiver to acquire attractive real estate, enhance value and
recycle capital through sales. In particular the purchase and
simultaneous re-let of the asset at Great Yarmouth demonstrates our
opportunistic capabilities and strong relationships with dynamic
and growing retailers. We are also delighted to extend the existing
relationship with Scottish Widows Investment Partnership who we
regard as an important partner. Total assets under management by
NewRiver are now circa GBP250 million and involve a range of risk
controlled development and refurbishment opportunities.
- ends -
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: 0207 397 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 assets
under management at circa GBP250 million 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.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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