LONDON: NewRiver REIT plc announces the formation of a new retail park Capital Partnership with affiliates of Soilbuild Group Holdings Ltd (“Soilbuild”) and United Engineers Limited (“United Engineers”), two long-established and leading Singapore-based real estate investors.

The Capital Partnership creates a scalable platform through which NewRiver can grow its exposure to retail parks, one of its highest conviction investment sectors, in a capital-efficient manner whilst generating long-term recurring fee income alongside attractive direct investment returns, a statement said.

The Capital Partnership announces it has completed its first acquisition, The Springs retail park in Leeds, for £73.5m from Legal & General. The purchase price reflects a topped up net initial yield of 7.0% and an equivalent yield of 7.9%.

NewRiver holds a 25% interest in the Capital Partnership, resulting in a net equity investment of £9.3m following completion of a loan facility.

NewRiver has been appointed to provide acquisition, financing and asset management services to the Capital Partnership, generating recurring fee income. The transaction is in line with the Group’s strategy to expand its capital-light asset management and capital partnerships business.

The Springs is a c.275,000 sq ft retail and leisure park located at the intersection of junction 46 of the M1 and the Leeds Ring Road (ELOR) with over 900 car parking spaces and occupiers including M&S, Next, TK Maxx, Boots, Mango, The Range, Nando’s and Odeon.

Allan Lockhart, Chief Executive, commented: “This Capital Partnership is a strong endorsement of the retail sector and of NewRiver’s own retail expertise and operating platform. Retail parks are one of our highest conviction investment sectors, and this Capital Partnership creates a scalable platform for long-term growth.

By combining NewRiver’s operating expertise with long-term international capital, we can expand our presence in the sector in a capital-efficient way, generating recurring fee income alongside attractive investment returns.

The Springs is an exceptional first acquisition for the Capital Partnership. It is a high-quality asset with attractive fundamentals, strong occupier performance and clear opportunities to deliver further income and value growth.

This transaction also establishes a long-term relationship with partners who share our conviction in the retail park sector. Together, we have the ambition to build a significant portfolio over time while maintaining our disciplined approach to capital allocation.”

Lim Han Qin, Director of Soilbuild Group Holdings Limited, commented: “The launch of this partnership marks a significant milestone in the growth of our UK retail portfolio, a sector which aligns firmly with our broader real estate strategy, to undertake scalable investments into high-quality assets with growing cash flows. This partnership is complementary to our Group’s existing PBSA business in UK and demonstrates our commitment and focus in expanding and growing our UK business.”

Zhong Ming, Executive Director, United Engineers Limited, commented: “We are excited to be partnering with NewRiver, which brings a leading operating platform and a long-standing track record of successfully investing in the UK retail market. We look forward to working closely with the NewRiver team to execute our strategy and grow the partnership over the coming years.”