NewRiver Retail Limited to acquire the Ramsay Retail Warehouse
NewRiver Retail Limited (AIM: NRR), the UK REIT specialising in value-creating retail property investment and active asset management, announces that it has exchanged contracts to acquire the Ramsay Retail Warehouse Portfolio (the "Portfolio") for a total consideration of £69.1 million, equating to a net initial yield of 8.0 per cent. on the income producing assets.
The Portfolio is to be acquired from a major foodstore operator utilising a portion of the funds to be raised following completion of the Company's proposed conditional placing of 50,000,000 new ordinary shares which is intended to raise gross proceeds of approximately £150 million, as announced on 19 June 2015 (the "Placing").
The acquisition is in line with the Company's proven business model of acquiring carefully selected retail assets that will generate attractive cash on equity returns with identifiable opportunities to unlock additional value through the Company's active asset management and risk-controlled development.
The Ramsay Portfolio
The Ramsay Portfolio, a geographically diverse portfolio comprising 13 assets, includes nine value-led retail parks and four development sites each with approved planning consents and pre-let interest from retailers.
The portfolio comprises 462,916 sq. ft. of lettable space let to 36 occupiers located in successful retail locations adjacent to upper-quartile performing foodstores. The portfolio has a high occupancy of 97% and generates a strong, sustainable income stream underpinned by a WALE of 6.27 years. The portfolio's high quality retail covenants, reflective of the Company's existing portfolio, include leading retailers such as TK Maxx, Argos, Poundstretcher, B&M, Matalan and Boots. Existing total Net Income for the portfolio is £5,607,009 per annum with average rents of £12 per sq. ft. offering excellent opportunities for future income growth.
The Portfolio presents significant asset management, extension and development opportunities given the existing planning consents totalling some 300,289 sq. ft. of retail space. NewRiver has already made good progress agreeing terms with leading retailers including B&M, Wickes, Pets at Home and Sports Direct.
David Lockhart, CEO at NewRiver Retail, said:
"We are delighted to announce the Ramsay Retail Warehouse Portfolio acquisition which will be funded by the proceeds from our recent fundraise, the result of which reflects the great support we continue to receive from new and existing shareholders for the Company's growth strategy.
This attractive yielding Portfolio benefits from a strong retailing covenant leading to a secure and sustainable income stream and presents an immediate opportunity for NewRiver to pursue a range of value-enhancing asset management and risk controlled development initiatives. We are confident that this acquisition will add significant long term value for our shareholders."