NewRiver in £53m shopping centre deal
Another shopping-centre deal was announced today – NewRiver Retail has bought a portfolio of five shopping malls for £53m from the CPI Retail Active Management (CReAM) fund. The centres are in Bramley in Leeds, Burgess Hill in West Sussex, Erdington in Birmingham, Fareham in Hampshire and Wallsend near Newcastle.
NewRiver, founded by David Lockhart, recently converted to REIT status. The firm told Property Week it will have bought about £150m of retail assets in the past year following this acquisition. It says the portfolio has a number of attractive features including the excellent income security provided by an unexpired lease term average of 6.74 years. It also says four of the five malls have extension potential.
Property Week says the deal for the portfolio, which has a total lettable area of 518,000 sq ft, represents a net initial yield of 8.35% for the REIT. NewRiver Retail says the deal represents a discount of around 32% compared with the last time the portfolio was traded in 2005 at £78.1m, and a 42% discount to the portfolio’s peak value of £92m in December 2006.
The group of shopping centres was put up for sale after Barclays appointed receivers in July. HSBC provided a £34.58m facility to fund the deal.
