NEWRIVER REIT PLC — M&A Activity 2013

Nov 28, 2013

National Storage Mechanism | Additional information

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RNS Number : 1290U

NewRiver Retail Limited

28 November 2013

NewRiver Retail Limited

("NewRiver" or "the Company")

NewRiver to acquire portfolio of 202 public houses from Marston's Plc

Significant asset management opportunity for conversion to retail use

NewRiver Retail Limited (AIM: NRR), the UK REIT specialising in value-creating retail property investment and active asset management, announces that it has exchanged contracts to acquire a major portfolio (the "Portfolio") of public houses from Marston's Plc ("Marston's") for a total consideration of £90 million.

Highlights:

§ Acquisition of 202 public houses spread across the UK and predominately located in residential areas with good roadside visibility and car parking

§ Intention to convert the Portfolio to alternative uses, primarily into food Convenience Stores and restaurants

§ Acquisition underpinned through leaseback arrangement with Marston's for the entire Portfolio for a minimum term of up to four years (the "Period"), paying a total annual rent of £12,235,000 and reflecting a net initial yield of 12.8%

§ Marston's will continue to manage the Portfolio as a going concern until conversion and or sale by NewRiver

§ Strong initial interest already expressed from national supermarket and convenience store providers

§ Acquisition funded through NewRiver's BRAVO II joint venture partnership (a fund advised or managed by Pacific Investment Management Company LLC) with both parties taking a 50 per cent equity stake

NewRiver has exchanged contracts to acquire an off-market portfolio of 202 public houses from Marston's, the UK's leading brewing and pub retailing business, predominantly located in high population residential areas with good roadside visibility and extensive car parking.

It is NewRiver's intention to convert the majority of the assets to meet the high demand for new convenience store premises from the UK's major food store operators. The Company has already received strong initial interest from the UK's major convenience store operators and supermarket groups.

The Portfolio, with an average gross internal area of 3,150 sq ft, site area of 29,000 sq ft and on-site car parking of 24 spaces, is particularly suitable for convenience store use. The average unit value is £445,000 and the total site area equates 6.5 million sq ft with a total 4,500 car parking spaces.

The units were selected by the Company following detailed due diligence to identify assets with significant potential for asset management and value enhancement initiatives. The Portfolio includes adjacent car parking of 4,500 spaces. Additional uses such as branded restaurants, drive-through food outlets, residential, and medical centres have also been identified. NewRiver believes it will be able to pre-let significant tranches of the Portfolio to the major supermarket groups before conversion.

As part of the agreed terms of the acquisition, Marston's has entered into a minimum four-year term leaseback agreement (extendable to five years) during which time it will continue to manage and operate the Portfolio as public houses. Marston's will pay annual rent of £12,235,000, reflecting a net initial yield of 12.8 per cent on the purchase price.

Importantly, the acquisition represents the deployment of a significant element of the proceeds of NewRiver's oversubscribed £67 million equity fundraise five months since its completion in July.

David Lockhart, Chief Executive of NewRiver Retail Limited, commented:

"This off market transaction is a highly innovative opportunity for NewRiver to further demonstrate its proven risk-controlled retail development and asset management skills. With increasing demand from all of the major supermarket groups for Convenience Stores substantially outstripping supply, the Portfolio provides a very attractive opportunity to generate capital profits through the conversion of the public houses into Convenience Stores underpinned by an attractive cash on equity return from a FTSE 250 company.

"The acquisition marks a major achievement for NewRiver through the effective deployment of proceeds from the summer capital fundraising and further strengthens our joint venture partnership with BRAVO II."

-Ends-

For further information

NewRiver Retail Limited  David Lockhart, Chief Executive Mark Davies, Finance Director	Tel: 020 3328 5800
Pelham Bell Pottinger David Rydell/Guy Scarborough/Charlotte Offredi	Tel: 020 7861 3232
Cenkos Securities Max Hartley/Ian Soanes	Tel: 020 7397 8900
Liberum Capital Shane Le Prevost/Tim Graham	Tel: 020 3100 2000

About NewRiver

NewRiver Retail is a specialist Aim listed REIT focused solely on the UK food and value retail market and is fast-becoming the leading value-creating property investment platform in the sector.

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 the UK's fourth largest Shopping Centre owner by number with assets under management of £440 million comprising 24 UK wide shopping centres, 16 high street retail units and two supermarkets. The portfolio has in excess of 950 occupiers, a total of 3.8 million square feet, total annual footfall of over 105 million and an 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

BRAVO II is a fund advised or managed by Pacific Investment Management Company LLC

This information is provided by RNS

The company news service from the London Stock Exchange

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