NewRiver REIT PLC Pre-sale of residential units in Burgess Hill (8165L)
24 July 2017 - 4:00PM
UK Regulatory
TIDMNRR
RNS Number : 8165L
NewRiver REIT PLC
24 July 2017
NewRiver REIT plc
("NewRiver" or the "Company")
Contracts exchanged for pre-sale of residential units in Burgess
Hill
NewRiver is pleased to announce that it has exchanged
conditional contracts for the pre-sale of the entire residential
element of its major mixed-use regeneration of Burgess Hill town
centre.
Delph Property Group, a well-established family run residential
investment company, has agreed to purchase all 142 residential
units for GBP34 million. This residential pre-sale, together with
the pre-lets already secured on the retail & leisure element of
the scheme, significantly de-risks the redevelopment which has
projected construction costs of GBP47 million. Under the terms of
the pre-sale agreement, 10% of the total consideration was placed
in escrow at exchange, and a further 20% will be placed in escrow
ahead of the commencement of construction, with the balance
remitted to the Company on completion in 2020.
Simultaneously, NewRiver also exchanged on the Agreement for
Lease with Mid Sussex District Council for a new Head Lease of the
shopping centre, which is another important milestone for the
redevelopment. As a consequence of this activity, and in line with
its risk-controlled development approach, the Company expects to
begin its phased programme of works imminently.
NewRiver acquired the 123,000 sq ft Martlets Shopping Centre in
Burgess Hill in November 2010 for GBP12 million, representing a net
initial yield of 8.5%. Burgess Hill is an affluent catchment area
located within the 'Gatwick Diamond', just 20 minutes from Gatwick
Airport and 50 minutes by train to central London.
NewRiver received full detailed planning consent for the
mixed-use regeneration of Burgess Hill town centre in March 2016.
The 465,000 sq ft redevelopment of the existing shopping centre
forms a key element of NewRiver's 1.9 million sq ft risk-controlled
development pipeline which the Company believes will be a key
driver of long term returns for its shareholders, and is in line
with the Company's strategy to redevelop existing assets within the
portfolio where appropriate.
As well as 142 new residential units, the redevelopment will
provide a 10-screen multiplex cinema, a 63-bed hotel, an improved
retail offer and new restaurant and leisure provisions, additional
car park spaces, an improved public realm and a new purpose-built
library for the Council. The retail & leisure element of the
scheme is already 50% pre-let, with high quality and long dated
income secured from Cineworld, Nandos, Next, Travelodge and
Wildwood.
Allan Lockhart, Property Director, NewRiver commented: "The
pre-sale of the entire residential component of our Burgess Hill
redevelopment to a high quality residential specialist investor
significantly de-risks the project and, in-line with our
risk-controlled approach, puts us in a strong position to begin
construction.
Having recently received planning consent for our major
mixed-use regeneration in Cowley, Oxford, we are seeing real
momentum in our risk-controlled development pipeline, which we are
confident will be a significant driver of long term returns for our
shareholders."
Nicholas Belkin, Head of Acquisitions, Delph Property Group
commented: "We are excited to be involved in the Burgess Hill
regeneration story with NewRiver as it continues to show our firm
financial commitment to residential acquisitions throughout the
UK."
For further information
NewRiver REIT plc +44 (0)20 3328 5800
David Lockhart (Chief Executive)
Mark Davies (Chief Financial Officer)
Will Hobman (Head of Investor Relations)
Bell Pottinger +44 (0)20 3772 2500
David Rydell
Eve Kirmatzis
About NewRiver
NewRiver REIT plc (ticker: NRR) is a premium listed REIT on the
London Stock Exchange and a constituent of the FTSE 250 and EPRA
indices. The Company is a specialist real estate investor, asset
manager and developer focused solely on the UK retail and leisure
sector.
Founded in 2009, NewRiver is one of the UK's largest
owner/managers of convenience-led shopping centres with assets
under management of GBP1.3 billion principally comprising 33 UK
wide shopping centres together with further nationwide retail and
leisure assets. The portfolio totals 8 million sq. ft. with over
2,000 occupiers, an annual footfall of 150 million and a retail
occupancy rate of 97 per cent. Visit www.nrr.co.uk for further
information. LEI number: 2138004GX1VAUMH66L31
This information is provided by RNS
The company news service from the London Stock Exchange
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