NewRiver Retail Limited a UK REIT announced that it has exchanged contracts to acquire the Ramsay Retail Warehouse Portfolio for a total consideration of £69.1 mln (approx. € 96 mln), equating to a net initial yield of 8.0%. on the income producing assets.
The Portfolio is to be acquired from a major foodstore operator utilising a portion of the funds to be raised following completion of the Company's proposed conditional placing of 50,000,000 new ordinary shares which is intended to raise gross proceeds of approximately £150 million (approx. €208.4 mln), as announced on 19 June 2015.
The acquisition is in line with the Company's proven business model of acquiring carefully selected retail assets that will generate attractive cash on equity returns with identifiable opportunities to unlock additional value through the Company's active asset management and risk-controlled development.
The Ramsay Portfolio, a geographically diverse portfolio comprising 13 assets, includes nine value-led retail parks and four development sites each with approved planning consents and pre-let interest from retailers.
The portfolio comprises 462,916 ft² (approx. 43,006 m²) of lettable space let to 36 occupiers located in successful retail locations adjacent to upper-quartile performing foodstores. The portfolio has a high occupancy of 97% and generates a strong, sustainable income stream underpinned by a WALE of 6.27 years. The portfolio's high quality retail covenants, reflective of the Company's existing portfolio, include leading retailers such as TK Maxx, Argos, Poundstretcher, B&M, Matalan and Boots. Existing total Net Income for the portfolio is £5,607,009 per annum (approx. €7.79 mln) with average rents of £12 per ft² offering excellent opportunities for future income growth.
The Portfolio presents significant asset management, extension and development opportunities given the existing planning consents totalling some 300,289 ft² (approx. 27,897 m²) of retail space. NewRiver has already made good progress agreeing terms with leading retailers including B&M, Wickes, Pets at Home and Sports Direct.
Source: NewRiver Retail Limited