Retail landlord buys Grays shopping centre for £20.2m
NewRiver has bought the Grays shopping centre in south Essex for £20.2 million. The community shopping centre provides 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 acquisition price represents a net initial yield of 9.4 per cent on the shopping centre element, and a capital value across the whole site of just £40 per sq ft.
The convenience-led, community shopping centre is anchored by value and grocery retailers including Wilko, Poundland, Iceland and Peacocks, and has a 700-space multi-storey car park. At acquisition, it has an affordable and therefore sustainable 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 development opportunities.
NewRiver has already identified a number of value creating opportunities at the asset, to meet demand for a budget hotel, budget gym and discount food retailer, and to deliver up to 300 much-needed residential units.
Chief executive Allan Lockhart said: “Grays shopping centre is 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.”