NewRiver REIT plc (NewRiver) has sold 90% of its interest in Sprucefield Retail Park, Lisburn in Northern Ireland, to its joint venture partner BRAVO Strategies III LLC (BRAVO) for £34.7 million.
The sale price reflects a net initial yield of 9.0% and a 5% discount to its March 2020 valuation. This transaction increases the company’s total completed disposals so far in FY21 to £50.4 million.
NewRiver will retain a 10% interest in the retail park (NewRiver share: £3.9 million), and will benefit from 10% of the net rental income (NewRiver share: £0.4 million per annum). NewRiver has also been appointed as asset manager, in return for a management fee calculated by reference to the gross rental income of the asset, and will receive a promote based on financial performance.
NewRiver’s current joint venture relationship with BRAVO was formed in May 2019, with the aim of acquiring and managing a portfolio of retail parks in the UK. Following this transaction announced today, this joint venture relationship has made acquisitions totalling £143.7 million (NewRiver share: £38.5 million).
The transaction was supported by £20 million of debt financing provided by AIB, representing a new key banking relationship for NewRiver.
“We are pleased to complete this sale, further expanding and strengthening our joint venture relationship with BRAVO as part of NewRiver’s capital partnerships strategy. One of our key priorities for this financial year is to dispose of £80 million to £100 million of assets, in order to improve our LTV in-line with Company guidance. This sale means we are ahead of target at the end of the first half, and we continue to add to our disposal pipeline,” said Allan Lockhart, Chief Executive.