LONDON: Property investor NewRiver and Morgan Stanley Real Estate Investing have created a joint venture to acquire UK retail property which has bought its first portfolio for £49 million (RM253.83 million).
The closed-end NewRiver Retail Investments LP JV's deal capacity is more than £250 million, including leverage, NewRiver said in a statement on March 1.
Both NewRiver and Morgan Stanley Real Estate Investing have committed equity capital, and the senior debt facility is being provided by Santander Corporate Banking.
The maiden deal comprised a nationwide portfolio of nine large retail assets, bought from UBS Triton Property Fund and totalling more than 400,000 sq ft, with a net initial yield of about 9%, NewRiver said.
"Importantly, nearly 90% of the portfolio's rental income is secured by strong national and regional retailers predominantly operating in food and value retailing, the two strongest performing retail sectors," it said.
The JV's investment period is two years, with its life probably being five years, NewRiver said, adding its unit NewRiver Capital Ltd would be asset manager.
The JV will have first right of refusal on any assets worth more than £25 million identified as potential acquisition targets by NewRiver.
Morgan Stanley Real Estate Investing can convert all or part of its JV interest into NewRiver shares during the JV's life, so long as its does not own over 10% of NewRiver's shares. -- Reuters