NewRiver has exchanged contracts on the acquisition of a portfolio of four retail parks for a total consideration of €68.7m (£60.5m), reflecting a net initial yield of 9.8%, from Zurich Assurance. It is intended that the acquisition of the portfolio will be completed by the new 50:50 joint venture with BRAVO Strategies III (BRAVO), a fund managed by the Pacific Investment Management Company. NewRiver's share of the transaction will be satisfied from existing resources and available credit facilities.
The portfolio comprises four retail park parks: Kittybrewster Retail Park, Aberdeen; Telford Retail Park, Inverness; units in Kingsway East Retail Park, Dundee and Wakes Retail Park on the Isle of Wight. The retail parks have an affordable average rent of €16.77 (£14.77) per ft², an Affordable Rent to Sales ratio of 6.5% and a WAULT of 6.3 years, and are let to a high quality and well-diversified line-up of occupiers that complements NewRiver's existing portfolio.
Allan Lockhart, Chief Executive, commented: "We are delighted to be forming this joint venture with BRAVO, re-establishing a successful partnership that dates back to 2012, and has a track record of delivering growing returns to our shareholders. Recycling our capital from disposals into joint ventures enables us to secure a superior return on our capital and provides us with significant additional firepower to take advantage of the current dislocation in the retail real estate market. The portfolio of retail parks we have contracted to acquire is highly complementary to our existing portfolio, providing a low entry price, robust cash flows and opportunities to extract further income through active asset management and risk-controlled development opportunities."
