NewRiver Retail has announced that it has exchanged contracts to acquire the Neptune Portfolio, which comprises the Ridings Shopping Centre (pictured and located in Wakefield, West Yorkshire), the Cornmill Shopping Centre (Darlington in the North East of England) and the Capitol Shopping Centre (Cardiff in South Wales) for £92.3m. In addition to this, the company has also purchased a shopping centre in south-east London and two retail warehouses for a combined total of £15.6m (see below).
The company says that the acquisitions will be funded from a portion of the funds raised following completion of the its proposed conditional placing, which has been oversubscribed, and is intended to raise gross proceeds of approximately £150m (as announced on 10 December 2015).
The Neptune Portfolio, which was assembled between 2005 and 2006 at a cost £312m, has been acquired significantly below replacement cost and comprises 727,000 sq. ft. of multi-use lettable space combining retail and leisure units. The £92.3m purchase price equates to a net initial yield of 8.0%. New River Retail say that it is currently let to strong anchor retailers but the portfolio is highly reversionary, has a high occupancy of 96% and is generating a strong and a sustainable income stream underpinned by a weighted average life to expiry of 5.30 years. They also say that 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.
In terms of the company’s other retail purchases, NewRiver has completed the acquisition the Blenheim Shopping Centre in Penge (London Borough of Bromley) for £6.85m (NIY: 6.2% and equivalent yield of 7.9%), Daventry Retail Park (Northamptonshire) for £4.1m (NIY: 8.5% and equivalent yield of 10.5%), and a retail warehouse adjacent to the Clifton Moor Retail Park in York for £4.65m (NIY: 7.9% and equivalent yield of 7.9%). The warehouse is currently let to discount retailer B&M. The three retail assets each offer excellent value-enhancing asset management and development opportunities. The combined price of £15.6m represents a net initial yield of 7.3%.
NewRiver makes £108m of new acquisitions : NRR