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U.K. retail property group NewRiver Retail Ltd. (NRR.LN) Wednesday said it has paid GBP53 million for five U.K. shopping centers which house big-name tenants such as supermarket giant Tesco PLC (TSCO.LN) and clothing retailer New Look.
The firm bought the properties from the CPI Retail Active Management fund after fixed charge receivers were appointed over the portfolio in July by Barclays Bank PLC (BARC.LN).
It said the purchase price represents an "attractive" net initial yield of 8.35% and is about a 32% discount to the GBP78 million price the portfolio was traded for in the market in 2005 and a 42% discount to the portfolio's peak value of GBP92 million in December 2006.
The properties comprise five shopping centers spread across the U.K. in Leeds, Sussex, Birmingham, Hampshire and Newcastle-Upon-Tyne and offer a total approximate lettable area of 518,000 square feet.
The majority of tenants operate in the food, value and mass market retail market sectors and offer good diversification of income in terms of geography, number of tenancies and lease expiries, according to New River Retail.
It funded the buys with a GBP34.58 million facility provided by HSBC PLC (HBA.LN), which marks a new banking relationship for New River.
The outstanding equity requirement of about GBP19 million was funded from the proceeds of the issue of convertible unsecured loan stock.
-By Hannah Benjamin, Dow Jones Newswires; 44-20-7842-9298; email@example.com