NewRiver Retail Limited Acquisition of Newlands Shopping Centre, Witham, Essex

Posted: 14th November 2011 09:50

NewRiver Retail Limited (AIM and CISX: NRR), the UK REIT specialising in value-creating retail property investment and active asset management, is pleased to announce that it has completed the acquisition of the freehold interest of The Newland Shopping Centre in Witham, Essex. The property is being acquired from Glanmore Investment Limited for a total consideration of £5.0 million in cash, reflecting a net initial yield of approximately 9.7% and a cash on equity return of approximately 15%. The acquisition price reflects a reduction of 60% of the previously traded value in February 2007 at a price of £12.92 million. The Newlands Shopping Centre provides approximately 66,000 sqft of retailing and ancillary space anchored by Iceland, New Look, Card Factory, Greggs and Peacocks and benefits from direct links into adjoining Newlands Street and a 200 space car park.

Witham is a historic market town, situated in north Essex and the town has an above average weighting of ABC socio economic demographics.

In total there are 24 tenancies and the current gross rent roll is £0.58 million per annum with an average weighted unexpired lease length of 4.6 years. More than 60% of the income is secured to non-discretionary retail traders such as food, value fashion, discount & health and beauty, offering defensive characteristics.

Management believe that this is an excellent fit with NewRiver's investment strategy of targeting food and value anchored district centres, with low occupational costs, stable cashflows and identified development and value creating opportunities.

In addition, NewRiver today announces that it has completed the acquisition of 60-64 Church Walk, Burgess Hill where the Company already owns The Martlets shopping centre. The unit has been acquired for a total consideration of £1.32 million which represents a net initial yield of 10.1%. The property is currently let under a 10 year lease agreement to fashion retailer Store 21 on an annual charge of £140,000.

Executive Director at NewRiver, Nick Sewell said:

"The pricing of these two assets is very attractive and represents a 50% discount to current replacement costs. The Newland Shopping Centre acquisition fits exactly with our stated strategy of targeting food and value anchored shopping centres with value enhancing asset management and development opportunities which will modernise and revitalise the asset. The property in Burgess Hill strengthens our existing presence in the town and creates additional and exciting development opportunities. Both acquisitions have been obtained at very attractive initial yields, consistent with NewRiver's strategy of targeting higher yields where we can defend the income as well as adding value to generate higher returns."



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