NewRiver Retail Limited Announcement of £23.8 million of transactions (2501I)

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RNS Number : 2501I

NewRiver Retail Limited

24 March 2015

NewRiver Retail Limited

("NewRiver" or "the Company")

NewRiver announces GBP23.8 million of transactions

Three acquisitions totalling GBP18.26 million at an average net initial yield of 8.7%,

and three disposals totalling GBP5.53 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 GBP18.26 million and three disposals totalling GBP5.53 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 GBP18.26 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 GBP14.6 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 GBP6 per sq. ft. to GBP12 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 GBP2.1 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 GBP183,000 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 GBP1.56 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 GBP7.50 per sq ft, the property offers realistic prospects of rental growth.

DISPOSALS TOTALLING GBP5.53 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 GBP2.3 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 GBP1.8 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 GBP1.4 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 GBP1.43 million to a private investor at a yield of 5.96%.

NewRiver acquired the freehold of the former bank in April 2014 for GBP0.7 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 GBP0.3 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 31(st) 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 GBP332 million of acquisitions of which 89% have been shopping centres and we have disposed of GBP40.2 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          Tel: [phone] 
  David Lockhart, Chief 
  Executive 
  Mark Davies, Finance 
  Director 
 Bell Pottinger                   Tel: [phone] 
  David Rydell/David Bass/James 
  Newman 
 Liberum                          Tel: [phone] 
  Richard Crawley/Jamie 
  Richards 
 

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 GBP811 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.

This information is provided by RNS

The company news service from the London Stock Exchange

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