NewRiver snaps up Blackburn retail park
REAL estate investment company NewRiver Retail has announced a clutch of acqusitions and disposals, including three transactions in the region.
Most significantly the AIM listed REIT (Real Estate Investment Trust) has acquired the Lower Audley Street Retail Park in Blackburn for £14.6m, reflecting a net initial yield of 8.85%.
Located within the town’s core retail warehouse provision, the retail park comprises 114,000 sq ft of retail and leisure space and a 403 space car park, and trades adjacent to major national retailers including ASDA, B&Q, TK Maxx, Matalan and Next.
The retail park itself offers an extensive range of food, fashion, electronics, home and leisure outlets including B&M, Maplin, Mothercare, Halfords, Burger King, Chiquitos, Frankie & Benny’s and the town’s only enclosed ice rink. It was acqured from an unnamed private property company.
NewRiver said: “With 100% occupancy, the park will provide NewRiver with attractive cash on cash returns underpinned by a solid income stream, with affordable rents ranging from £6 per sqft to £12 per sq ft. and a weighted average lease to expiry (“WALE”) of 5.35 years.
“NewRiver has identified a range of asset management opportunities to enhance the capital value by improving the retail offer, potential for retail extensions and restaurant pods and improving the income security length through lease re-gears.”
The investor has also acquired the freehold interest of a 10,591 sq ft retail unit on Sealand Road, Chester, let to Staples from a local authority pension fund for £2.1m, reflecting a net initial yield of 8.24%. Staples has a 25 year lease on the unit expiring in 2017 at a rent of £183,000 pa.
The unit is ideally located 1.2 miles north west of Chester City Centre, and is adjacent to Chester’s principal retail park which is anchored by John Lewis at Home. The Staples unit, as well as benefiiting from a 40 space car park, comes with open A1 planning consent. NewRiver has the option to either redevelop to provide three smaller units or to re gear the existing lease with Staples.
Meanwhile it has sold a property at 40 Fishergate, Preston. The asset, a 10,000 sq ft former HSBC bank in fetched £1.43m when it was sold to a private investor at a yield of 5.96%.
NewRiver acquired the freehold of the former bank in April 2014 for £0.7m and subsequently secured planning consent to convert the building to a city centre convenience store which it simultaneously pre-let to J Sainsbury on a 15 year lease.
The sale reflects an attractive profit for the company, which after accounting for £0.3m of capital expenditure, results in an unlevered profit on cost of 45%.
