UK retail real estate investment trust NewRiver REIT is investing up to £9m (€10.6m) to acquire Ellandi Management, an asset and development management business focused on retail and regeneration.
NewRiver is paying an initial £5m and will pay an additional amount of up to £4m, depending on Ellandi reaching certain performance targets over an agreed period.
As part of the deal, the two co-founders and owners of Ellandi, Morgan Garfield and Mark Robinson, will join NewRiver as head of capital partnerships and head of regeneration, respectively and also join NewRiver’s executive committee.
NewRiver said the acquisition of Ellandi provides its existing capital partnership business with “additional scale and diversification, as well as introducing complementary experience of managing destination shopping centres and regeneration projects”.
Ellandi has a portfolio of 16 shopping centre asset management mandates with 10 different partners.
London-listed NewRiver owns a £540m UK-wide portfolio of 24 community shopping centres and 12 retail parks. It also manages 18 retail parks and 21 shopping centres on behalf of capital partners, taking its total assets under management (AUM) to £2bn.
Following the deal, the combined capital partnership business will have £1.5bn of AUM with a portfolio of 21 shopping centres and 18 retail parks, with 13 different partners. Adding NewRiver’s owned portfolio of retail assets, increases the total AUM to £2bn across a portfolio of 44 shopping centres and 29 retail parks and an existing fee income stream of £8.2m.
Allan Lockhart, NewRiver’s CEO, said the acquisition of Ellandi “supports our ambitions to expand our capital partnerships business and grow its fee income”.
Lockhart added: “By bringing together two high-quality teams with complementary skills and experience in asset management and regeneration, together with the balance sheet resources we have available, we are well positioned to participate in these opportunities, both on the balance sheet and through capital partnerships.”
Robinson said: “Morgan and I are extremely proud of what the team at Ellandi have achieved to date in delivering sustainable change to the UK’s retail places and believe this transaction creates an exciting opportunity to combine two market-leading retail asset management businesses with shared growth ambitions.
“Together we will bring unrivalled insights into UK consumer and retailer trends through the extensive data of our enlarged footprint.”
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