UK-listed real estate investment trust NewRiver REIT and PAF Lux SCA have divested two retail parks in the UK for £62.6 mln (€72.6 mln) to RI UK 1 Limited.
The Glendoe and Telford Road Retail Parks in Inverness extends to 16,679 m2 with 10 retail units, including tenants such as B&M, Oak Furnitureland, Tapi, Go Outdoors, Poundstretcher, Farmfoods, Sterling Furniture and Infinity.
The Kittybrewster Retail Park in Aberdeen comprises of 14,314 m2 of ground floor accommodation with 13 units let to the likes of Carpetright, Oak Furnitureland, Tapi Carpets, TK Maxx, Dreams, DFS & McDonald's.
The two retail parks generated net rental income of £5.7 mln (€6.6 mln) during FY 2023 and had a gross asset value of £64.4 mln (€74.7 mln) at 31 March 2023.
The sale proceeds will go towards reducing NewRiver's net debt as at 31 March 2023 by £31.8 mln (€36.9 mln) to £169.5 mln (€196.5 mln), reducing the loan-to-value ration to 30.3% on a proforma basis.
NewRiver REIT CEO Allan Lockhart said: ‘The Napier joint venture is a great example of why we like retail parks and working in capital partnerships. Over our four years of ownership and management, we have been able to crystallise compelling returns for ourselves and our partner by utilising our specialist retail platform at each stage of the process, all the way from disciplined stock selection to successful delivery of asset management plans in order to secure a successful exit. In addition, the disposal means that the strength of NewRiver's balance sheet position is further improved, with proforma LTV now at 30.3% and significant cash resources giving maximum flexibility and optionality around capital allocation.’
The disposals comprise the final properties in the Napier JV with PAF Lux SCA, SICAV RAIF of Luxembourg, acting on behalf of its compartment Bravo.
They bring total sale receipts from Napier to £76.0 mln (€88.1 mln), reflecting a blended net initial yield of 7.4%.
The total receipts are 26% higher than the price paid for the portfolio in June 2019 from a UK institute for £60.5 mln (€70.1 mln), which reflected a blended net initial yield of 9.8%.
Following the disposal of Napier, NewRiver and Bravo continue to own two assets within a separate venture.
