NewRiver Retail has bought a portfolio of 202 pubs from Marston’s for £90m in an off-market sale and leaseback deal.
The specialist REIT plans to convert the portfolio into restaurants, shops and supermarkets.
Marston’s has agreed to lease back the pubs for four years, paying a total rent of £12.2m, reflecting a net initial yield of 12.8%.
It will continue to manage the portfolio until the pubs are converted or sold by NewRiver.
The REIT funded the purchase through its BRAVO II joint venture, managed by Pacific Investment Management, in which both parties have a 50% equity stake.
The Portfolio, with an average gross internal area of 3,150 sq ft, site area of 29,000 sq ft and on-site car parking of 24 spaces, is particularly suitable for convenience store use.
David Lockhart, chief executive of NewRiver Retail Limited, said: “This off-market transaction is a highly innovative opportunity for NewRiver to further demonstrate its proven risk-controlled retail development and asset management skills.
“With increasing demand from all of the major supermarket groups for convenience stores substantially outstripping supply, the portfolio provides a very attractive opportunity to generate capital profits through the conversion of the public houses into Convenience Stores underpinned by an attractive cash on equity return from a FTSE 250 company.
“The acquisition marks a major achievement for NewRiver through the effective deployment of proceeds from the summer capital fundraising and further strengthens our joint venture partnership with BRAVO II.”
Jack.Sidders@estatesgazette.com
