NewRiver REIT (LSE:NRR) has formed a new retail park Capital Partnership with affiliates of Soilbuild Group Holdings and United Engineers, two Singapore-based real estate investors.
The partnership has completed its first acquisition, buying The Springs retail park in Leeds from Legal & General for £73.5m, at a topped-up net initial yield of 7.0% and an equivalent yield of 7.9%.
NewRiver holds a 25% interest in the partnership, putting its net equity investment at £9.3m following completion of a loan facility.
The company will also earn recurring fee income by providing acquisition, financing and asset management services to the partnership.
The Springs spans roughly 275,000 sq ft at the junction of the M1 and Leeds Ring Road, with over 900 parking spaces and tenants including M&S, Next, TK Maxx, Boots and Odeon.
Built in 2018, the park is 96% occupied with an average rent of £19.20 per sq ft and a weighted average lease expiry of 7.5 years, and is expected to reach full occupancy within six months.
"Retail parks are one of our highest conviction investment sectors, and this Capital Partnership creates a scalable platform for long-term growth," said chief executive Allan Lockhart.
The deal takes NewRiver's pro forma loan-to-value to 44%, within its 50% policy limit, though the company retains an active disposal pipeline for the 2027 fiscal year aimed at returning leverage toward its 40% guidance.
The move follows NewRiver's recent refinancing, which management has said underpins its dividend policy for fiscal 2027.
Soilbuild's Lim Han Qin called the venture "a significant milestone" in growing the group's UK retail portfolio, while United Engineers' Zhong Ming said the partners aim to "grow the partnership over the coming years."