New River snaps up shopping centres for £68m
Listed REIT New River Retail informed the London Stock Exchange this morning that it has agreed to buy a portfolio of four UK shopping centres from Zurich Assurance for £68m, which it says “represents an attractive net initial yield of 8.0%”. Property Week says the centres are The Horsefair in Wisbech, The Piazza in Paisley, Merlin Walk in Carmarthen and The Hildreds in Skegness.
The shopping centres have a net lettable area of 502,500 sq ft and total annual footfall of 19 million, New River said. The vacancy rate is 3.3% and 94% of the rental income is let to multiple retailers – about 60% of the total is let to food and value retailers, it noted. In total there are 122 tenancies, which New River says provides good income diversification.
Chief executive officer David Lockhart said the deal was in line with the company’s strategy of investing in food-anchored and value-led retail centres with stable income profiles and low occupational costs. He noted that the acquisition would add to earnings from the first full financial year following the deal.
New River at the same time announced a placing of shares at 252p to raise £40m to fund part of the cost of the deal. The Financial Times today reported that it would also raise debt from HSBC.
