NewRiver REIT has announced that it has exchanged contracts for the pre-sale of the entire residential element of its major mixed-use regeneration of Burgess Hill town centre.
Delph Property Group, which NewRiver REIT describes as a well-established family run residential investment company, has agreed to purchase all 142 residential units for £34 million. It also says that this residential pre-sale, together with the pre-lets already secured on the retail & leisure element of the scheme, significantly de-risks the redevelopment which has projected construction costs of £47 million. Under the terms of the pre-sale agreement, 10% of the total consideration was placed in escrow at exchange, and a further 20% will be placed in escrow ahead of the commencement of construction, with the balance remitted to the Company on completion in 2020.
Exchanged on an agreement for lease with Mid Sussex District Council
NewRiver also says that, simultaneous to the residential pre-sale described above, it exchanged on the Agreement for Lease with Mid Sussex District Council for a new Head Lease of the shopping centre, which is another important milestone for the redevelopment. As a consequence of this activity, and in line with its risk-controlled development approach, the Company expects to begin its phased programme of works imminently.
About the Martlets Shopping Centre, Burgess Hill
NewRiver acquired the 123,000 square foot Martlets Shopping Centre in Burgess Hill in November 2010 for £12 million, representing a net initial yield of 8.5%. NewRiver describe Burgess Hill as an affluent catchment area located within the ‘Gatwick Diamond’, just 20 minutes from Gatwick Airport and 50 minutes by train to central London.
NewRiver received full detailed planning consent for the mixed-use regeneration of Burgess Hill town centre in March 2016. This includes the 465,000 square foot redevelopment of the existing shopping centre. The company says that, as well as 142 new residential units, the redevelopment will provide a 10-screen multiplex cinema, a 63-bed hotel, an improved retail offer and new restaurant and leisure provisions, additional car park spaces, an improved public realm and a new purpose-built library for the Council. The retail & leisure element of the scheme is already 50% pre-let, with what NewRiver describes as ‘high quality and long dated income secured from Cineworld, Nandos, Next, Travelodge and Wildwood’.
About New River REIT and its manager, New River
New River REIT is a Real Estate Investment Trust that is focussed on the UK food and value retail sector. It was founded in 2009, and listed on the AIM segment of the London Stock Exchange. On the 18 August 2016 it moved to a premium listing on the Main market of the London Stock Exchange as a plc.
New River REIT is managed by New River. New river describes itself as a leading property investor, asset manager & developer specialising in the UK retail sector. It says that its mission is to, “own and operate best-in-class retail properties that generate a high, sustainable income and provide a vibrant attractive environment for our retailers and shoppers.”
New River says that it is one of the UK’s largest shopping centre owner/managers with assets under management of £1.3 billion, as at 31 March 2017, comprising 33 UK-wide shopping centres, 22 retail warehouses, 15 high street assets and a portfolio of 344 pubs.
NewRiver REIT announces pre-sale of residential element of Burgess Hill regeneration : NRR