M&A Activity • Dec 24, 2015
M&A Activity
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RNS Number : 0933K
NewRiver Retail Limited
24 December 2015
NewRiver Retail Limited
("NewRiver" or "the Company")
Swift deployment of majority of proceeds of £150 million equity raise
Acquisitions totalling £108 million for four shopping centres and
two retail warehouses an average yield of 8%
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 the Neptune Portfolio (the "Portfolio") for a total consideration of £92.3 million, equating to a net initial yield of 8.0%, an equivalent yield of 9.6% and a reversionary yield of 10.5%.
NewRiver has also completed the acquisition of three further retail assets for a combined total of £15.6 million at a blended net initial yield of 7.3%.
The acquisitions will be funded utilising a portion of the funds to be raised following completion of the Company's proposed conditional placing of 46,153,846 new ordinary shares which is intended to raise gross proceeds of approximately £150 million, as announced on 10 December 2015 (the "Placing").
These acquisitions demonstrate the Company's proven ability to swiftly deploy funds and deliver on its business model by acquiring strategically selected retail assets that will generate attractive cash on equity returns with identifiable opportunities to deliver capital growth through the Company's active asset management and risk-controlled development.
The Neptune Portfolio
NewRiver has exchanged contracts to acquire the Neptune Portfolio for a total consideration of £92.3 million, equating to a net initial yield ('NIY') of 8%, an equivalent yield of 9.6% and a reversionary yield of 10.5%. The Portfolio, assembled between 2005 and 2006, was acquired in the market at a then combined total of £312 million.
This geographically diverse portfolio comprises three assets: the Ridings Shopping Centre, Wakefield in West Yorkshire; the Cornmill Shopping Centre, Darlington in the North East of England; and the Capitol Shopping Centre, Cardiff in South Wales.
The Portfolio has been acquired significantly below replacement cost and comprises 727,000 sq. ft. of multi-use lettable space combining retail and leisure units currently let to strong anchor retailers. The portfolio is highly reversionary with a combined reversionary yield of 10.5%, a high occupancy of 96% generating a strong and a sustainable income stream underpinned by a WALE of 5.30 years.
The Portfolio benefits from a range of high quality retailers and anchor stores, complementary to the Company's existing portfolio, including Next, Primark, Tesco, Morrisons, TK Maxx, Easy Gym and Boots and attracts a combined annual footfall of 22 million. Existing total net income for the portfolio is £7.75 million per annum with affordable average rents of £11.80 per sq. ft. offering excellent opportunities for future income growth.
The Portfolio presents significant asset management, extension and development opportunities following a period of under investment. Initiatives include the reconfiguration of units to create more attractive units appropriate to retailer demand, improvements to the existing retail mix, and specifically, the repositioning of the Capitol Shopping Centre as a leading food and leisure destination.
Three further acquisitions in Daventry, York and Penge in South-East London
In addition to the acquisition of the Neptune Portfolio, NewRiver has completed the acquisition of three further retail assets comprising one shopping centre in south-east London and two retail warehouses for a combined total of £15.6 million, at a net initial yield of 7.3%.
These comprise: Blenheim Shopping Centre in Penge, in the London Borough of Bromley for £6.85 million (NIY: 6.2% and equivalent yield of 7.9%); Daventry Retail Park in Northamptonshire for a consideration of £4.1 million (NIY: 8.5% and equivalent yield of 10.5%); and a retail warehouse adjacent to the Clifton Moor Retail Park in York for £4.65 million (NIY: 7.9% and equivalent yield of 7.9%) currently let to discount retailer B&M. The three retail assets each offer excellent value-enhancing asset management and development opportunities.
Further details of the acquisitions are included in the Notes to editor below.
David Lockhart, CEO at NewRiver Retail, said:
"Following our recently over-subscribed £150 million equity raise, we are delighted to announce the swift deployment of the majority of the proceeds into these strategic acquisitions. The Neptune Portfolio marks another major shopping centre portfolio acquisition for NewRiver and the combined acquisitions present a range of immediate value-enhancing asset management and risk controlled development opportunities. We are confident that these acquisitions will add significant long term value for our shareholders."
- ends -
| NewRiver Retail Limited David Lockhart, Chief Executive Mark Davies, Finance Director |
Tel: 020 3328 5800 |
| Bell Pottinger David Rydell / James Newman / David Bass |
Tel: 020 3772 2500 |
| Liberum Richard Crawley / Jamie Richards |
Tel: 020 3100 2000 |
| Peel Hunt LLP Capel Irwin / Hugh Preston |
Tel: 020 7418 8900 |
Notes to editors
The six assets acquired include the following investment properties:
The Ridings Shopping Centre, Wakefield
- Covered multi-level shopping centre with 10 million annual footfall and primary catchment population of 309,000
- 320,000 sq. ft with a 1,070 space landlord controlled car park
- WALE of 6.08 years
- Equivalent yield of 13.5%
- Reversionary yield of 15.5%
- Key retailers: Primark, Morrisons, TK Maxx, Marks & Spencer and BHS
Cornmill Shopping Centre, Darlington
- Dominant Shopping Centre with balanced retail offer and strong occupier demand with a catchment population of 311,000 and annual footfall of 6 million
- 242,000 sq. ft with a 400 space landlord controlled car park
- WALE 4.91 years
- Equivalent yield of 7.6%
- Reversionary yield of 7.8%
- Key retailers: Primark, Next, Topshop, Waterstones and Superdrug
Capitol Shopping Centre, Cardiff
- Substantial city centre site extending to 2.6 acres benefiting from annual footfall on Queen Street of 30 million
- 167,000 sq. ft with 388 parking bays
- WALE 5.05 years
- Equivalent yield of 11.1%
- Reversionary yield of 11.7%
- Key retailers: Tesco Metro, EasyGym, Hobbs, Boots, Poundworld, Café Nero and Pret-a-Manger
Blenheim Shopping Centre, Penge
- Located in the London Borough of Bromley with strong transport links into Central London
- Opportunity for risk controlled extension and development
- Four units totalling 43,000 sq. ft of retail space
- The centre is served by a 216 space multi-storey car park over three floors accessed from the centre
- WALE 6.46 yrs
- Equivalent yield of 7.9%
- Reversionary yield of 8.99%
- Key retailers: Wilkinsons, Iceland and Peacocks
Daventry Retail Park, Northamptonshire
- Property is held on a freehold basis and is located 15 miles west of Northampton and 19 miles south east of Coventry
- Asset management and extension opportunities to create new units
- Gross internal area of 23,000 sq ft with 200 parking bays
- Let to Cemex Investments
- WALE 6.76 yrs
- Equivalent yield of 10.5%
- Reversionary yield of 11.65%
Retail Warehouse adjacent to the Clifton Moor Retail Park in York
- Located adjacent to Clifton Moor Retail Park which is the 4th largest retail park in the UK
- Core holding for retail warehousing portfolio with secure income stream given the successful trading performance of B&M
- Asset management opportunities to re-gear
- 25,000 sq ft benefiting from 95 customer car spaces
- WALE 2.71 yrs
- Equivalent yield of 7.9%
- Reversionary yield of 7.9%
About NewRiver
NewRiver Retail Limited is an AIM listed REIT. The Company is a specialist real estate investor, asset manager and developer focused solely on the UK retail sector. At the close of 2014 NewRiver Retail was named Property Company of the Year - Retail & Leisure at the Estates Gazette Awards.
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 £1 billion principally comprising 29 UK wide shopping centres, further nationwide retail assets and a portfolio of 359 pubs with retail and mixed-use extension opportunities. The portfolio has 1,440 occupiers, a total of 6.4 million sq. ft., total annual footfall of 126 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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