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Fri 19th Jun 2015 - NewRiver Retail to raise £150m to fund Marston’s portfolio and acquisitions
NewRiver Retail to raise £150m to fund Marston’s portfolio and acquisitions: NewRiver Retail, the company that bought 202 Marston’s pubs in November 2013 for their potential development as convenience stores, is to raise £150m through a share placing. Around £29m of the £150m will be used to buy the 50% stake in the Marston’s portfolio not owned by NewRiver – the deal will produce a net initial yield of 10.1%. Profit before tax for the year ended 31 December 2014 (audited) attributable to (the Marston’s portfolio) was £7.2 million (recurring) with £15.8 million of fair value adjustments, resulting in a total Profit Before Tax attributable to unitholders for the year ended 31 December 2014 of £23 million. The company will also buy 13 retail parks from the money raised and move from Aim to the main market. The company stated: “NewRiver also continues to pursue a pipeline of other potential acquisitions and development opportunities, all within its target investment criteria. In particular, Heads of Terms have been agreed and respective board approvals have been obtained for the acquisition of a portfolio of 13 retail park assets for circa £70 million. The portfolio comprises 13 sites, of which nine are investment properties (£64 million) and four are assets which also have development potential (£6 million). Each property asset is adjacent to a store occupied by one of the major grocers. Under the Heads of Terms, the initial yield at acquisition will be approximately 8%. The portfolio is well let, with 97% occupancy and an average rent of £12 per sq ft. The portfolio offers a good investment opportunity as well as development prospects, with a projected capital expenditure requirement of £30 million. Planning consent has already been obtained for the four development assets. Based on the current Heads of Terms, returns on the proposed acquisition are expected to exceed the Company’s target return criteria.” Chief executive David Lockhart said: “NewRiver has enjoyed significant progress from its foundation in 2009, when it commenced business with just £25 million of seed capital. Since then we have demonstrated a track record of delivering strong returns for shareholders by deploying our highly regarded active asset management and risk-controlled development skills. Support for our strategy has been evidenced by a series of successful equity issues to propel growth. Today’s equity fundraising will give us the ability to boost the gross asset value of the business to in excess of £1 billion. We continue to seek asset acquisitions which meet our target criteria and believe the company is well positioned to continue to deliver long term value for shareholders.”


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