PROPERTY investor NewRiver and Morgan Stanley Real Estate Investing have created a joint venture (JV) to acquire UK retail property which has bought its first portfolio for £49m.
The NewRiver Retail Investments deal capacity is more than £250m under the JV.
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 first deal includes a nationwide portfolio of nine large retail assets, bought from UBS Triton Property Fund and totalling more than 400,000 square feet, with a net initial yield of about nine per cent.
NewRiver said in a statement: “Importantly, nearly 90 per cent 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.”
The JV’s investment period is two years, with its life probably being five years. Morgan Stanley Real Estate Investing can convert all or part of its JV interest into NewRiver shares as long as its does not own over 10 per cent of NewRiver’s shares