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Thu 28th Nov 2013 - Breaking News - C-store and supermarket chains eye Marston's package
NewRiver Retail – strong interest from supermarkets and C-stores for Marston’s pubs: NewRiver Retail has reported strong interest from supermarket and convenience store chains for sites among the 202 pubs it bought today for £90m from Marston’s intending to convert them to alternate use and restaurants. The company said the 202 pubs are spread across the UK but predominately located in residential areas with good roadside visibility and car parking. The acquisition is underpinned through leaseback arrangement with Marston’s for the entire portfolio for a minimum term of up to four years, paying a total annual rent of £12,235,000 and reflecting a net initial yield of 12.8%. Marston’s will continue to manage the portfolio as a going concern until conversion and or sale by NewRiver. The company stated: “The portfolio, with an average gross internal area of 3,150 sq ft, site area of 29,000 sq ft and on-site car parking of 24 spaces, is particularly suitable for convenience store use. The average unit value is £445,000 and the total site area equates 6.5 million sq ft with a total 4,500 car parking spaces. The units were selected by the company following detailed due diligence to identify assets with significant potential for asset management and value enhancement initiatives. The portfolio includes adjacent car parking of 4,500 spaces. Additional uses such as branded restaurants, drive-through food outlets, residential, and medical centres have also been identified. NewRiver believes it will be able to pre-let significant tranches of the portfolio to the major supermarket groups before conversion.” David Lockhart, chief executive of NewRiver Retail Limited, said: “This off market transaction is a highly innovative opportunity for NewRiver to further demonstrate its proven risk-controlled retail development and asset management skills. With increasing demand from all of the major supermarket groups for Convenience Stores substantially outstripping supply, the portfolio provides a very attractive opportunity to generate capital profits through the conversion of the public houses into Convenience Stores underpinned by an attractive cash on equity return from a FTSE 250 company.The acquisition marks a major achievement for NewRiver through the effective deployment of proceeds from the summer capital fundraising and further strengthens our joint venture partnership with BRAVO II.”
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