The UK REIT NewRiver Retail has exchanged contracts to acquire the Neptune Portfolio for £92.3 million, equating to a net initial yield of 8%, an equivalent yield of 9.6% and a reversionary yield of 10.5%.
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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.
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.
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%);
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. ■