NewRiver Retail bags Neptune portfolio in the UK at 8% yield

UK REIT NewRiver Retail has exchanged contracts to acquire the Neptune Portfolio for £92.3 mln (€125 mln), equating to a net initial yield of 8%.

'The Neptune Portfolio marks another major shopping centre portfolio acquisition for NewRiver and the combined acquisitions present a range of immediate value-enhancing asset management and risk controlled development opportunities,' CEO David Lockhart said.

The acquisitions will be funded with the proceeds of the company's placing of 46 million new ordinary shares which is intended to raise gross proceeds of £150 mln.

The portfolio, assembled between 2005 and 2006, was acquired in the market at a then combined total of £312 mln. This geographically diverse portfolio comprises three assets: the Ridings shopping centre, Wakefield in West Yorkshire; the Cornmill shopping centre, Darlington in the North East of England; and the Capitol shopping centre, Cardiff in South Wales.

The portfolio has been acquired significantly below replacement cost and comprises 67,540 m2 of multi-use lettable space combining retail and leisure units currently let to strong anchor retailers. The portfolio is 96% let with a weighted average lease term of 5.30 years. It generates a net income of £7.75 mln per annum.

Second deal
NewRiver Retail has also completed the acquisition of another three retail assets for a combined total of £15.6 mln, reflecting a blended net initial yield of 7.3%.

The assets are the Blenheim shopping centre in Penge, the Daventry retail park in Northamptonshire and a retail warehouse adjacent to the Clifton Moor Retail Park in York.