NRR : NewRiver raising £75m to buy out joint venture partner
NewRiver Retail is raising £75m via a placing of new shares to fund the acquisition of the 90% stake it doesn’t already own in the “NewRiver Retail Property Unit Trust” – the cost of which will be £71m. The underlying property portfolio comprises five shopping centres and a single high street asset which together have a net lettable area of approximately one million square feet across over 200 tenancies which have an average lease length outstanding of 7.2 years. They say that, since NewRiver’s acquisition of its initial 10 per cent. interest in 2012, the assets have performed well and have benefited from the Company’s active asset management. They believe they have a range of significant further opportunities to enhance value through asset management and risk-controlled development activities, some of which are already being progressed by the Company.
The acquisition is being made off market at the equivalent to a net initial yield of 7.75 per cent. on the acquisition price and they reckon the deal will be enhancing to NAV and EPS in the current financial year and beyond. (For the year ended 31 December 2013, recurring profit before tax attributable to unitholders of the NewRiver Property Unit Trust was £6.3m.