Deals



NewRiver Retail Limited Acquires Sands Portfolio


Posted: 18th December 2014 08:29

NewRiver Retail Limited (AIM: NRR), the UK REIT specialising in value-creating retail property investment and active asset management, announces it has completed contracts for the acquisition of the Sands Portfolio, which includes the Arndale Shopping Centre in Morecambe and five UK High Street assets (the "Portfolio"), for a total consideration of £19 million, equating to a net initial yield of just under 9.75%. NewRiver has completed the acquisition of the portfolio using existing cash resources.
 
Individually, the assets were last traded between 2005 and 2007 for a combined total of £40 million and the sale to NewRiver at £19 million is as a result of a distressed debt situation.
 
In total, the portfolio comprises 141,000 sq ft and benefits from a high occupancy of 95%.
 
The Arndale Shopping Centre, acquired for £14 million reflecting a net initial yield of 9%, is the largest asset, providing the principle retail destination in Morecambe, Lancashire, the busy North West coastal town recognised as a key tourist and community-led shopping destination attracting 3.3 million day trip visitors per annum.
 
This centre includes 40 retail units comprising 107,300 sq ft of lettable space and is underpinned by a strong income stream with a WALE of 9.3 years. A value and convenience-led shopping centre, 85% of the rent is secured against a strong covenant of occupiers, including Poundland, Boots, Iceland, Argos, Travelodge, Halifax, Greggs and a 16,772 sq ft Tesco Metro.
 
The five high yielding High Street retail assets provide quality retail covenants, located nationally in Rugby, Nuneaton, Spalding, Blackpool and Perth. The five High Street assets in total comprise 33,800 sq ft and have been purchased for £5 million at a blended net initial yield of 12.2%. Retailers within the High Street portfolio include: Boots, McDonalds, Halifax, Monsoon and Top Shop.
 
The acquisition delivers on NewRiver's strategy of investing in convenience led Community Shopping Centres and High Street retail assets with stable income streams and opportunities to create significant value. NewRiver has identified a number of asset management opportunities across the Sands Portfolio to enhance value through refurbishment, re branding and improvement to retailer mix.
 
Allan Lockhart, Property Director at NewRiver Retail, said:
 
"Following another highly active year for NewRiver, we are pleased to continue to deliver on our careful stock selection and active acquisition strategy by acquiring the Arndale Shopping Centre in Morecambe and five nationally located High Street assets at an attractive price reflecting a NIY of 9.75%."
 
"The Arndale Shopping Centre offers excellent value-enhancing opportunities having been impaired by a lack of investment for a number of years owing to the financial position of the previous owner. We are committed to improving the shopping centre with our plans to invest fresh capital and work closely with Lancaster City Council. We have identified a number of active asset management initiatives, including attracting new occupiers for an improved retail mix, a centre rebrand and refurbishment, together with improvements to the adjoining public realm, all of which will drive increased footfall and dwell time."

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