TIDMNRR
RNS Number : 8096H
NewRiver Retail Limited
01 March 2010
NewRiver forms co-investment partnership with Morgan Stanley Real Estate
Investing to launch GBP250 million UK retail property joint venture
Announces first JV acquisition - GBP49 million
portfolio purchase from UBS
NewRiver Retail Limited (AIM: NRR, "NewRiver"), the specialist value-creating
retail property investment and asset management company, is pleased to announce
that it has been selected to form a new co-investment joint venture (the "JV")
with Morgan Stanley Real Estate Investing (MSREI) targeted at acquiring UK
retail property assets.
The JV, to be called NewRiver Retail Investments LP, is a closed end
Guernsey-registered Limited Partnership, and will have an acquisition capacity
in excess of GBP250 million including appropriate leverage. The JV will
initially be owned equally by NewRiver and MSREI with future respective equity
commitments being decided on a transaction by transaction basis.
NewRiver Capital Limited, the wholly-owned subsidiary and property manager, and
adviser to NewRiver, is pleased to announce that it has been appointed as asset
manager on behalf of the JVand will receive asset management fees as well as
performance-related returns.
The investment period will run for two years with the life of the JV likely to
be for a minimum of five years. The JV will have first right of refusal on any
assets with a value in excess of GBP25 million identified as potential
acquisition opportunities by NewRiver. Under the terms of the Partnership, MSREI
has been granted the right to convert its interest in the JV or part thereof on
an NAV for NAV basis into shares of NewRiver, to up to 10 per cent of the share
capital of NewRiverduring the joint venture period.
In line with the existing NewRiver investment strategy, the JV will target UK
retail property assets with the objective of delivering added value and above
average returns through NewRiver's proven skills in active and entrepreneurial
asset management and risk controlled development and refurbishment.
On behalf of the JV, NewRiver is pleased to announce that it has exchanged
contracts to acquire its first acquisition - a large UK retail portfolio from
the UBS Triton Property Fund for the sum of GBP49 million.
The acquisition commences the JV's investment programme with a nationwide
portfolio reflecting an attractive net initial yield of circa nine per cent and
comprising nine large retail assets totalling more than 400,000 square feet and
let to more than 100 tenants.
Importantly, nearly 90 per cent of the portfolio's rental income is secured by
strong national and regional retailers predominantly operating in food and value
retailing, the two strongest performing retail sectors.
The portfolio properties are as follows:
+----------------------+--------------+------------------------+
| Location | Net Lettable | Key Retail Tenants |
| | Area | |
| | (sq ft) | |
| | | |
+----------------------+--------------+------------------------+
| Andover - High | 30,400 | Poundland/Superdrug |
| Street | | |
+----------------------+--------------+------------------------+
| Canterbury - High | 3,250 | A Jones |
| Street | | |
+----------------------+--------------+------------------------+
| London - East Ham | 30,000 | J Sainsbury |
+----------------------+--------------+------------------------+
| Glasgow - Union | 16,900 | Nobles/Ladbrokes |
| Street | | |
+----------------------+--------------+------------------------+
| Huddersfield- | 103,250 | Argos/Peters/Phones |
| Packhorse S/C | | 4 U |
+----------------------+--------------+------------------------+
| Norwich - Guildhall | 43,250 | Tesco |
+----------------------+--------------+------------------------+
| Shrewsbury - High | 50,800 | HSBC/Starbucks/Viyella |
| Street | | |
+----------------------+--------------+------------------------+
| Widnes - Albert | 84,500 | Iceland/WH |
| Square S/C | | Smith/Argos |
+----------------------+--------------+------------------------+
| Wrexham - Regent | 39,500 | Waterstones/Bon |
| Street | | Marche/JJB |
+----------------------+--------------+------------------------+
The average unexpired lease length is approximately seven years and J Sainsbury
and Tesco are the two largest tenants in the portfolio, accounting for more than
16% of the total rent roll.
Both parties have committed equity capital with the senior debt facility being
provided by Santander Corporate Banking.
NewRiver believes that this opportunistic acquisition fits with its investment
strategy of acquiring assets at an attractive initial yield with identifiable
capital value enhancement opportunities. The portfolio offers a wide range of
compelling value creation opportunities where NewRiver believes it can add
significant value through active and entrepreneurial asset management.
NewRiver believes the formation of the JV and its initial acquisition of a major
portfolio is a further significant step forward since its IPO in September 2009.
A core team has been put in place, some GBP22m of equity deployed in
acquisitions and the co-investment strategy has now been secured. The Company
believes that while UK property market conditions are improving there are still
good value-enhancement opportunities to be found for active asset managers with
sector specific expertise.
Additionally, NewRiver announces the appointment of Cenkos Securities Plc as
Nomad to the Company with immediate effect.
David Lockhart, Chief Executive of NewRiver Capital Limited, said:
"Morgan Stanley Real Estate Investing is one of the premier global property
investors and we are delighted to be partnering with them in this exciting JV.
Having MSREI on board not only endorses our focused sector specific business
strategy and investment case but also validates our view that our opportunistic
approach to acquisition and active asset management is the best route to value
generation at this point of the commercial property and economic cycle. The
acquisition of the UBS Triton retail portfolio fits exactly with the strategy
stated when NewRiver listed on AIM and is a significant step forward in the
development of the NewRiver business."
Philipp Westermann, Managing Director, Morgan Stanley Real Estate Investing,
said:
"We are delighted to form this partnership with a talented retail property
specialist and active asset manager. We are confident that NewRiver can add
substantial value to our first acquisition and we look forward to growing our
joint venture."
- ends -
For further information:
NewRiver Capital Limited Tel:
01481 735 540
David Lockhart
MSREI
Tel: 020 7425 2094
Michael Wang
Cenkos Securities
Tel: 0207 397 8900
Ian Soanes
Max Hartley
Pelham Bell Pottinger
Tel: 0207 337 1500
David Rydell
Rosanne Perry
About NewRiver
NewRiver Retail Limited is a specialist real estate investor and asset manager
with a particular focus on the UK retail sector. NewRiver Retail is advised on
property matters by its wholly-owned subsidiary, NewRiver Capital Limited, whose
management team, led by David Lockhart, have more than 50 years combined
experience in UK commercial property markets. 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.newriverretail.com and
www.newrivercapital.co.uk
About Morgan Stanley Real Estate
Morgan Stanley Real Estate Investing is one of the largest real estate
investment managers globally. Since 1991, it has acquired $173.7 billion of real
estate assets worldwide and currently manages $59.5 billion in real estate
assets on behalf of its clients. For more information about Morgan Stanley Real
Estate Investing, please visit www.morganstanley.com
Morgan Stanley is a leading global financial services firm providing a wide
range of investment banking, securities, investment management and wealth
management services. The firm's employees serve clients worldwide including
corporations, governments, institutions and individuals from more than 1,200
offices in 37 countries. For further information about Morgan Stanley, please
visit www.morganstanley.com
This information is provided by RNS
The company news service from the London Stock Exchange
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