NewRiver has announced its joint venture with Bravo Strategies has exchanged contracts to acquire retail estate The Moor from CEP ASI UKPF Nominee 1 Limited and CEP ASI UKPF Nominee 2 Limited, for a total consideration of £41m.
The Moor estate, which is located in Sheffield city centre, is close to the city’s railway station, council offices, and both Sheffield University and Sheffield Hallam University.
It is one of Sheffield’s “designated city centre” shopping quarters, centred around an open-air pedestrianised thoroughfare, the estate provides 680,000 sq ft of retail and leisure space.
The space is anchored by retailers Next, Sainsbury’s, and an occupier-owned Primark, alongside a 670-space car park, a nine-screen cinema and The Moor Market, a covered marketplace owned by Sheffield City Council.
The estate comprises 15 assets which are “capable of being sold separately”, which provides “inherent liquidity” and offers a “range of mixed-use development” opportunities.
The acquisition price reportedly reflects a “significant discount” to the breakup value of these individual assets, as provided by an independent valuer.
It also represents a “net initial yield” of 9.1%, which is expected to rise following the completion of a number of leasing deals to 9.8%, with an “equivalent yield” of 11.3% and a reversionary yield of 14.6%.
Allan Lockhart, chief executive, NewRiver, commented: “The acquisition of The Moor with our joint venture partner Bravo represents a rare opportunity to acquire a 28 acre estate in one of the UK’s largest and fastest-growing cities, at a very attractive price which is far below the breakup value of the site.
“This acquisition will generate very attractive returns for NewRiver, driven by sustainable rental income and capital growth through the redevelopment of parts of the estate, principally for residential uses.”
He added: “Taking a 10% stake ensures we maintain our financial discipline, as we remain on track to meet our target of £80m to £100m of disposals this financial year.”