This agreement is the first to be signed by NewRiver since it announced in May 2018 its longer-term strategies to adapt to a changing retail real estate market, which included using the Company's market-leading asset management platform to manage third-party assets. Under the terms of the AMA, NewRiver will undertake full asset management responsibilities for the shopping centre in exchange for a management fee calculated as a proportion of net operational income received and a development fee calculated on third-party-tendered development costs. The agreement will initially be for two years, with the option of a roll on for a further two years subject to the agreement of both parties. NewRiver will not acquire an equity stake in the asset as part of the agreement.
Whitefriars Shopping Centre is the dominant regional shopping centre for East Kent and is located in the heart of Canterbury, with a catchment of 270,000 people within a 30 minute drive and annual footfall of 13 million. It has 75 units across 474,000 sq ft and 530 car parking spaces, and is anchored by Fenwicks, Marks & Spencer, Next and Primark. The shopping centre has been fully owned by the Council since February 2018, when it purchased the remaining 50% of the asset from its 50:50 joint venture with TH Real Estate for £75 million, equating to a net initial yield of 6.5%. The joint venture was formed in 2016, when the Council paid £79 million for its initial 50%, equating to a net initial yield of 6.0%.
Allan Lockhart, Chief Executive, NewRiver said: “We are delighted to have signed this Asset Management Agreement with Canterbury City Council to bring our asset management expertise to Whitefriars Shopping Centre. NewRiver's selection by the Council in a competitive tender process demonstrates that our strong relationships with retailers and track record of successful asset management makes us the clear choice for third-party retail asset owners. Against a growing trend of local authorities purchasing shopping centre assets and taking control of their town centres, NewRiver is ideally positioned to provide best-in-class asset management expertise to them, delivering thriving assets for local communities and sustainable, long-term revenue for our shareholders.”
Colin Carmichael, Chief Executive, Canterbury City Council said: “Our purchase of Whitefriars Shopping Centre in February 2018 was a once-in-a-generation opportunity to take control of one our city's key sites and ensure it works for the benefit of the community. The Council is very pleased to be partnering with one of the UK's leading retail asset managers in NewRiver to realise this ambition. Their passion and expertise give the Council the confidence that Whitefriars will continue to go from strength to strength.”