NewRiver buys in the south-east
Published: 15 November, 2011
NewRiver Retail has bought the Newland shopping centre in Witham, Essex and a shop unit in Burgess Hill, Sussex
The Newland shopping centre is being acquired from Glanmore Investment for £5.0m, reflecting a net initial yield of 9.7 per cent. The centre last changed hands in February 2007 for £12.92m, showing Glenmore a loss of 60 per cent.
The Newlands Centre provides approximately 66,000 sq ft of retailing and ancillary space anchored by Iceland, New Look, Card Factory, Greggs and Peacocks and benefits from direct links into adjoining Newlands Street and a 200-space car park.
In total there are 24 tenancies and the current gross rent roll is £0.58m pa with an average weighted unexpired lease length of 4.6 years. More than 60 per cent of the income is secured to non-discretionary retail traders such as food, value fashion, discount & health and beauty, offering defensive characteristics.
In addition, NewRiver has bought 60-64 Church Walk, Burgess Hill where the company already owns The Martlets shopping centre. The £1.32m purchase price represents a net initial yield of 10.1 per cent. The property is currently let under a 10 year lease to fashion retailer Store 21 at £140,000 pa.
Nick Sewell, executive director at NewRiver, said: "The pricing of these two assets is very attractive and represents a 50 per cent discount to current replacement costs. The Newland Shopping Centre acquisition fits exactly with our stated strategy of targeting food and value anchored shopping centres with value enhancing asset management and development opportunities which will modernise and revitalise the asset. The property in Burgess Hill strengthens our existing presence in the town and creates additional and exciting development opportunities. Both acquisitions have been obtained at very attractive initial yields, consistent with NewRiver’s strategy of targeting higher yields where we can defend the income as well as adding value to generate higher returns.”
