NewRiver buys Essex shopping centre for £20.2m

NewRiver Real Estate Investment Trust on Thursday said it had bought Grays Shopping Centre in Essex for £20.2m.

The community shopping centre has 177,300 sq ft of retail space and a 32,000 sq ft office building with permitted development rights for residential conversion, on a 4.7 acre site, the company said.

The acquisition price represents a net initial yield of 9.4% on the shopping centre element, and a capital value across the whole site of £40 per sq ft.

NewRiver said the site had an average rent of £9.62 per sq ft and a weighted average unexpired lease term of 4.6 years, which will facilitate asset management and risk-controlled development opportunities.

Chief executive Allan Lockhart said the shopping centre was a community asset “with excellent asset management and development potential, acquired at a very attractive entry price, which is well below previously traded values and the residential residual value of the asset”.

“The site is central to ambitious town centre redevelopment plans put forward by the local authority and we look forward to working closely with them to deliver the right mix of residential, retail and leisure for the local community, while providing attractive and sustainable returns for our shareholders.”