NewRiver teams up with Singapore-based investors for £73.5m Leeds retail park acquisition
A newly-formed capital partnership between NewRiver REIT and two Singapore-based investors has made its first acquisition, a retail park in Leeds, for £73.5m.
NewRiver – alongside affiliates of Soilbuild Group Holdings Limited and United Engineers Limited – has acquired The Springs retail park from Legal & General.
Constructed in 2018, The Springs spans approximately 275,000 sq ft and has an occupancy rate of 96% and an average rent of £19.2 per sq ft. Tenants at the scheme, which is supplemented by over 900 car parking spaces, include M&S, Next, TK Maxx, Boots, Mango, The Range, Nando’s, and Odeon. The retail park has a weighted average lease expiry of 7.5 years and is expected to be fully occupied within six months.
NewRiver said the acquisition price of £73.5m reflects a topped up net initial yield of 7.0% and an equivalent yield of 7.9%
The real estate investment trust holds a 25% interest in the partnership, resulting in a net equity investment of £9.3m following the completion of a loan facility. NewRiver said the capital partnership advances its strategy by expanding its capital-light asset management and capital partnerships business, increasing its exposure to retail parks and generating long-term recurring fee income alongside attractive direct investment returns.
Allan Lockhart, chief executive of NewRiver, said: “This Capital Partnership is a strong endorsement of the retail sector and of NewRiver’s own retail expertise and operating platform. Retail parks are one of our highest conviction investment sectors, and this Capital Partnership creates a scalable platform for long-term growth.
“By combining NewRiver’s operating expertise with long-term international capital, we can expand our presence in the sector in a capital-efficient way, generating recurring fee income alongside attractive investment returns.
“The Springs is an exceptional first acquisition for the Capital Partnership. It is a high-quality asset with attractive fundamentals, strong occupier performance and clear opportunities to deliver further income and value growth.
“This transaction also establishes a long-term relationship with partners who share our conviction in the retail park sector. Together, we have the ambition to build a significant portfolio over time while maintaining our disciplined approach to capital allocation.”
Lim Han Qin, director of Soilbuild Group Holdings Limited, added: “The launch of this partnership marks a significant milestone in the growth of our UK retail portfolio, a sector which aligns firmly with our broader real estate strategy, to undertake scalable investments into high-quality assets with growing cash flows. This partnership is complementary to our Group’s existing PBSA business in UK and demonstrates our commitment and focus in expanding and growing our UK business.”
Zhong Ming, executive director of United Engineers Limited, said: “We are excited to be partnering with NewRiver, which brings a leading operating platform and a long-standing track record of successfully investing in the UK retail market. We look forward to working closely with the NewRiver team to execute our strategy and grow the partnership over the coming years.”