NewRiver wins Co-op convenience store deal

7th Apr 2014 14:44

The Co-operative Group has signed an agreement with shopping centre owner and manager NewRiver Retail to lease 54 convenience stores based on its existing portfolio of pubs and neighbouring land.The two companies have agreed to a phased development programme over two years that will create almost 200,000 square feet of new retail space with and agreed rental income between £15 and £17.50 per square foot.The majority of the locations will be new-build projects constructed on surplus land adjacent to NewRiver's 200-strong pub portfolio, which it bought for £90m in November from pub group Marston's.The AIM-listed company said the remaining part of the Portfolio will be conventional conversions from public house use to convenience stores, or redeveloped as standalone convenience retail stores.The lease terms are 15 years with no break clause and an annual RPI-linked rental increase formula capped at 4% and collared at 1%.If NewRiver delivers all tranches of the portfolio before certain dates it can receive total incentive fees of up to £2.7m.Allan Lockhart, Property Director at NewRiver Retail, said: "NewRiver has efficiently delivered on its stated intention to identify viable demand from major food store operators to expand their convenience store portfolios. "The agreement is a prime example of how NewRiver's successful strategy of strong retailer relationships, active asset management and risk-controlled development generates significant value through the creation of institutional investment class assets."Shares in NewRiver were up 3.4% to 293.5p at 15:05 on Monday.OH