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Commercial Property News
New River Retail buy 6 large retail units for £19 million
New River Retail, the AIM-listed retail property investor started up last year, announced that it has exchanged contracts to acquire a portfolio of 6 retail investment properties, totalling 304,000 sq ft from property manager REDEVCO for £19.01 million.
The properties include a 150,000 sq ft unit in Glasgow let to TJ Hughes, a 47,000 sq ft unit in Romford also let to TJ Hughes, stores in Poole, Canterbury and Basingstoke let to Wilkinson Hardware and a store in Harlow let to New Look, all between 23 -34,000 sq ft.
The transaction has been 65% funded by Santander.
Allan Lockhart, Property Director of NewRiver Capital Ltd, said:
"We are delighted with this acquisition which fully accords with the NewRiver investment strategy. There are a number of attractive features within this portfolio including the excellent income security that an unexpired lease term average of 12.6 years provides; current rental levels are very modest, offering excellent prospects of rental growth and each of the properties offers identifiable capital value enhancement opportunities, from releasing significant marriage value from lease extensions to re-gearing the leases with the freeholders through to redevelopment.
Given the attractive net initial yield of this portfolio, the annual cash on equity returns are 14% and with the identifiable capital value enhancement opportunities, we are confident that this acquisition will exceed NewRiver's minimum total return target of 15%. This acquisition demonstrates NewRiver's continuing ability to source attractive deals that compliment the Company's disciplined and well researched investment strategy."
The properties include a 150,000 sq ft unit in Glasgow let to TJ Hughes, a 47,000 sq ft unit in Romford also let to TJ Hughes, stores in Poole, Canterbury and Basingstoke let to Wilkinson Hardware and a store in Harlow let to New Look, all between 23 -34,000 sq ft.
The transaction has been 65% funded by Santander.
Allan Lockhart, Property Director of NewRiver Capital Ltd, said:
"We are delighted with this acquisition which fully accords with the NewRiver investment strategy. There are a number of attractive features within this portfolio including the excellent income security that an unexpired lease term average of 12.6 years provides; current rental levels are very modest, offering excellent prospects of rental growth and each of the properties offers identifiable capital value enhancement opportunities, from releasing significant marriage value from lease extensions to re-gearing the leases with the freeholders through to redevelopment.
Given the attractive net initial yield of this portfolio, the annual cash on equity returns are 14% and with the identifiable capital value enhancement opportunities, we are confident that this acquisition will exceed NewRiver's minimum total return target of 15%. This acquisition demonstrates NewRiver's continuing ability to source attractive deals that compliment the Company's disciplined and well researched investment strategy."
Mon, 7th Jun 2010