City shopping and leisure centre acquired for £41m

A 28-acre retail and leisure destination in Sheffield city centre has been acquired by a joint venture.

NewRiver REIT says its joint venture with BRAVO Strategies III LLC – in which it holds a 10% stake – has acquired The Moor from CEP ASI UKPF Nominee 1 Limited and CEP ASI UKPF Nominee 2 Limited, for £41m. It represents a capital value of £60 per sq ft.  

The Moor estate is close to the city’s railway station and has benefitted from significant private and public sector investment.

Centred around an open-air pedestrianised thoroughfare, the estate provides 680,000 sq ft of retail and leisure space anchored by Next, Sainsbury’s, and an occupier-owned Primark, alongside a 670-space car park, a nine-screen cinema and The Moor Market, a covered marketplace owned by Sheffield City Council.

NewRiver says it has identified the potential to develop up to 1,100 build-to-rent residential units and up to 300 purpose-built student accommodation units, offering significant capital growth opportunities.

The listed business says The Moor benefits from being close to Sheffield City Council’s £470m ‘Heart of the City II’ regeneration project, which is delivering a mixed-use district in the city centre that connects all neighbouring quarters.

The project aims to generate 7,000 jobs in the city by 2030 and has already seen the development of a five-storey office building, which is fully let to HSBC and CMS, and a commitment by John Lewis to a new 20-year lease and refurbishment of its city centre store. 

NewRiver says its share of the acquisition consideration will be satisfied from existing resources, with completion scheduled for 1 April 2021.

It will hold a 10% interest in the asset (NewRiver share: £4.1m) and will benefit from 10% of the net rental income of £4m per annum (NewRiver share: £0.4m per annum). 

Allan Lockhart, chief executive, said: “The acquisition of The Moor with our joint venture partner BRAVO represents a rare opportunity to acquire a 28 acre estate in one of the UK’s largest and fastest-growing cities, at a very attractive price which is far below the breakup value of the site.

“This acquisition will generate very attractive returns for NewRiver, driven by sustainable rental income and capital growth through the redevelopment of parts of the estate, principally for residential uses.

“Sheffield City Council has demonstrated it is a forward-thinking and proactive local authority, and we look forward to working with them to deliver a vibrant and connected city centre.

“Taking a 10% stake ensures we maintain our financial discipline, as we remain on track to meet our target of £80m to £100m of disposals this financial year.”