NewRiver has sold two high street units in Market Harborough, Leicestershire, to Harborough District Commercial Services (HDCS), which is wholly-owned by Harborough District Council, for €4.4m (£3.8m), reflecting a net initial yield of 6.6%. The assets comprise an 11,700ft² store let to Tesco, with five residential units on the first floor, a 6,200ft² store let to B&M, and a service yard between the units. This transaction brings the company’s total disposals in FY19 to €65.9m (£56.7m), and reduces the proportion of high street assets in its portfolio to just over 1%.
NewRiver purchased the properties from a private property company in June 2015 for a net initial yield of 9.0%. Over its period of ownership, the assets have delivered a blended unlevered IRR of 15.0%. NewRiver has also signed an Asset Management Agreement with HDCS for the assets, whereby it will undertake full asset management responsibilities in exchange for a management fee calculated as a proportion of net operating income received.
Norman Proudfoot, Director of HDCS, said: “We are continually looking to undertake and support new investment opportunities which will provide benefits to residents and businesses across the district. As part of this, we were made aware of this new and exciting opportunity to buy two retail buildings and some land surrounding these buildings in Market Harborough town centre. The purchase of these buildings will not only support the future economic regeneration of Market Harborough but also provide a return on the council investment and this will be used to support wider council services across the district.”
Stuart Mitchell, Director, commented: “We are delighted to sign this deal with HDCS, further advancing our profitable capital recycling programme and expanding our asset management platform. HDCS recognise the key role that NewRiver’s asset management expertise can play in enhancing town centres and realising ambitious local plans, and we look forward to working closely with them. As the trend of local councils taking ownership of their town centres through retail asset acquisitions continues, NewRiver stands ready to take advantage of the asset management opportunities it will bring.”
