NewRiver Retail Limited Completes the acquisition of remaining 90% of Shopping Centre Joint Venture from LVS Luxembourg IV Sarl
NewRiver Retail Limited (AIM: NRR), the UK REIT specialising in value-creating retail property investment, active asset management and risk controlled development, announces that it has today completed the acquisition (the "Acquisition") from LVS, a subsidiary of Bravo (a fund advised or managed by Pacific Investment Management Company LLC), of the remaining 90 per cent of a joint venture (the "NewRiver Retail Property Unit Trust") not already owned by NewRiver, as previously announced on 3 December 2014, for a cash consideration of £71 million.
The Company has financed the acquisition through the proceeds of an equity issue of 27,272,727 new Ordinary Shares in NewRiver (the "Placing Shares") at a price of 275 pence per Placing Share, raising gross proceeds of approximately £75 million, as announced on 8 January 2015.
The underlying property portfolio comprises five shopping centres located in Oxford, Hull, Bridlington, Kilmarnock and Leamington Spa; and a single high street asset also in Hull. Together these assets have a net lettable area of almost one million square feet across over 200 tenancies with an average lease length exceeding 7.2 years. Since NewRiver's acquisition of the original 10 per cent interest in 2012, the assets have performed well and have benefited from the Company's active asset management programme. Looking forward, the assets present a range of significant opportunities to enhance value through further asset management initiatives and risk-controlled development which are already being progressed by the Company. Whilst these opportunities are being pursued the portfolio will continue to provide an attractive income return.
The Acquisition was made off-market at a net initial yield of 7.75 per cent. on the acquisition price. The Acquisition is expected to be enhancing to NAV and EPS in the current financial year and beyond. Profit Before Tax for the year ended 31 December 2013 (audited) attributable to Unitholders of the NewRiver Property Unit Trust was £6.3 million (recurring) with a £3.6 million fair value surplus, resulting in a total Profit Before Tax attributable to Unitholders for the year ended 31 December 2013 of £9.9 million.
David Lockhart, Chief Executive of NewRiver Retail, commented:
"We are delighted to have completed the off-market acquisition of this shopping centre portfolio from Bravo - resulting in NewRiver owning and controlling 100% of the assets which providean attractive income stream. Having managed the portfolio from the initial acquisition in December 2012, we know the assets extremely well and are in an excellent position to pursue a range of exciting value-enhancing asset management and risk controlled development opportunities. We are confident that the Acquisition will add significant long term value for the Company and it is expected to be NAV and EPS enhancing in the current financial year and beyond."