New River in £67m placing to fund growth

PROPERTY investment trust New River Retail could almost double the size of its portfolio by raising £67m through a share placing to fund more shopping centre acquisitions across the UK.

The Aim-listed real estate investment trust yesterday said the 32.6m new shares would be priced at 205p each.

The cash will be used to accelerate the expansion of New River Retail’s portfolio of UK secondary shopping centres.

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New River has a portfolio worth around £400m across the UK. It manages 23 shopping centres, including four in Yorkshire.

It owns The Packhorse in Huddersfield, Bramley Shopping Centre near Leeds, Prospect Shopping Centre in Hull and Promenades in Bridlington

Tenants include Sainsbury’s, Tesco, Co-op, Boots, Wilkinsons and Poundland.

It said the cash could be used for standalone acquisitions, co-investments and joint ventures, such as further deals with Pimco, the world’s biggest bond investor.

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New River joined up with Pimco last December to buy five secondary UK shopping centres, including the Hull and Bridlington centres, from Zurich Assurance for £85m.

Allan Lockhart, property director at New River Retail, told the Yorkshire Post: “We have the ability to invest capital either from our own balance sheet or through our joint venture with Pimco. Using this capital, we could significantly increase the size of our portfolio.

“We are effectively doubling the size of the business through the share placing, adding up to £300m to our portfolio.”

Mr Lockhart said the trust was targeting high-yielding assets, which were underpinned by strong underlying cash flows, with well trading retailers, affordable rents, and where it believed it could add value through time and capital.

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“We have a pipeline of transactions that we are currently reviewing,” he said. “The retail market in real estate terms is a big market.”

New River sees 80m shoppers a year flock to its shopping centres.

Mr Lockhart said its Yorkshire centres were performing particularly well. “The customers who use our centres are very loyal and that is a trait particularly associated with Yorkshire,” he said. “The centres there are well supported by their local communities. We are very pleased with the way our shopping centres, particularly in Yorkshire, are performing.”

Chief executive David Lockhart said: “Our proven investment strategy focused on driving income returns and enhancing value through active asset management and risk-controlled development has... led NewRiver to its third consecutive year of growth.”

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He added: “Retail is a dynamic sector that is pivotal to the UK economy and provides considerable opportunities for growth.

“The directors believe that New River is well-positioned to take advantage of current favourable market conditions and is taking the opportunity to raise further equity for investment to enlarge the asset base and increase long-term shareholder value.”

New River is the fourth largest owner and operator in the UK by number of retail assets over 50,000 sq ft.

Allan Lockhart added: “New River has been going for less than four years and in that time we have gone from no assets to being the fourth largest in the UK.

“We are active owners of shopping centres and we are long-term investors as well.”

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