NewRiver REIT plc
(“NewRiver” or the “Company”)
Acquisition of Hollywood Retail & Leisure Park, Barrow-in-Furness, for £15.3 million
NewRiver is pleased to announce the acquisition of Hollywood Retail & Leisure Park, Barrow-in-Furness, from an institutional investor for £15.3 million.
The asset offers NewRiver a number of opportunities to extract further value, including the immediate conversion of two existing units to introduce a 20,000 sq ft store let to Aldi on a 20 year lease with RPI rental increases. Including the Aldi store, the retail park has a weighted average unexpired lease term of 8.3 years, an affordable and sustainable average rent of £11.36 per sq ft, and the pricing represents an attractive net initial yield of 8.7%.
The acquisition comprises a ten-unit 124,400 sq ft retail and leisure park providing 665 free car parking spaces. Aldi will join an occupier line-up consisting of quality national retailers and leisure operators including TK Maxx, Currys PC World, Dunelm, Nuffield Health and a six-screen Vue cinema. The asset will be 100% occupied following the introduction of Aldi later this year.
The asset is conveniently located in the main retail park concentration in Barrow-in-Furness, a town with a large catchment and limited retail competition, and will provide the primary discount food offer for the community following the introduction of Aldi. Barrow-in-Furness benefits from an employment level above national and regional averages, and BAE Systems, the dominant local employer with a workforce of more than 8,000 people, was awarded a major £2.4 billion government contract in May 2018 to build the next generation of Royal Navy submarines in the town, which will lead to further investment and job creation.
Allan Lockhart, Chief Executive commented: “Hollywood Retail & Leisure Park is a high quality asset acquired for a very attractive entry price, and presents some immediate asset management and development opportunities, including the introduction of a new 20,000 sq ft Aldi, let on a long lease. Barrow-in-Furness has a large catchment, an ambitious Local Plan and favourable economic prospects, especially following the government's recent recommitment to BAE Systems' shipyard in the town. Since the start of this financial year we have invested over £140 million across our core sectors of community shopping centres, retail parks and community pubs at a blended initial yield of 13% demonstrating our disciplined approach to capital allocation and our commitment to deliver growing and sustainable cash returns to shareholders.”