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NewRiver in the press

CoStar: NewRiver to raise £200m to buy out Bravo JV

CoStar website
15th June 2017
Kasmira Jefford

NewRiver REIT has announced plans to raise £200m through a placing to help fund the £60m acquisition of its Bravo joint venture portfolio and provide a war chest for future buying opportunities. 

The FTSE 250 high street and shopping centre landlord said around £133m will be raised by way of a firm placing and a further £67m through a placing and open offer, all at price in the range of 330p to 340p. This reflects a discount to last night’s closing price of 369p. 

Liberum Capital and Peel Hunt are acting as joint bookrunners on the placing, which will take place via an accelerated bookbuild. 

The placing comes at a time of increased caution and uncertainty in the market following last week’s election result, ongoing Brexit talks, and the potential for rises in inflation and interest rates. 

However NewRiver’s chief executive David Lockhart said the group was “well placed to meet the challenges” that could arise in this environment thanks to its sizeable, cash generative and geographically diverse portfolio. 

“NewRiver has a proven track record of delivering growing and sustainable cash returns to shareholders through its focused strategy of acquiring and managing convenience-led and community-focused retail and leisure assets combined with risk-controlled development and value enhancing active asset management.” 

“Given the investment made into the BRAVO assets to date, we are confident that this acquisition will produce attractive long term returns for our shareholders," he added. 

NewRiver will use £60m of the proceeds to buy the remaining 50% it does not already own in two joint ventures set up with funds advised by PIMCO for which it has already entered heads of terms. 

A further £30m will be spent on existing developments, which includes converting pubs into convenience stores and the development of the group’s Canvey Island retail park. The remainder will be used to help fund any future buying sprees. 

The placing comes after the company tapped investors for around £150m in January last year. Since that date, it has spent in excess of £158m on acquisitions, including Broadway Shopping Centre and Broadway Square Retail Park in Bexleyheath, Cuckoo Bridge Retail Park in Dumfries and a retail warehouse in Sheffield which, in aggregate, added a further 765,000 sq ft of retail space to the group’s portfolio. 

NewRiver said it continues to see opportunities to purchase assets at attractive yields and "with the potential to secure good quality income streams which can be distributed to NewRiver REIT shareholders through the Company’s quarterly dividend programme”.