LONDON (ShareCast) - (Sharecast News) - NewRiver has signed an asset management agreement with Canterbury City Council for the asset management of Whitefriars Shopping Centre, it announced on Wednesday.
The FTSE 250 real estate investment trust said the agreement was the first it had signed since it announced its longer-term strategies to "adapt to a changing retail real estate market" in May, which included using its asset management platform to manage third-party assets.

Under the terms of the agreement, NewRiver would undertake full asset management responsibilities for the shopping centre in exchange for a management fee calculated as a proportion of net operational income received and a development fee calculated on third-party-tendered development costs.

The agreement would initially be for two years, with the option of a roll-on for a further two years subject to the agreement of both parties.

NewRiver would not acquire an equity stake in the asset as part of the agreement.

The firm described Whitefriars Shopping Centre as the "dominant" regional shopping centre for East Kent, located in the centre of Canterbury with a catchment of 270,000 people within a 30 minute drive and annual footfall of 13 million.

It has 75 units across 474,000 square feet and 530 car parking spaces, and is anchored by Fenwicks, Marks & Spencer, Next and Primark.

The shopping centre had been fully owned by the council since February 2018, when it purchased the remaining 50% of the asset from its 50:50 joint venture with TH Real Estate for £75m, equating to a net initial yield of 6.5%.

NewRiver said the initial joint venture was formed in 2016, when the council paid £79m for its initial 50%, equating to a net initial yield of 6.0%.

"We are delighted to have signed this asset management agreement with Canterbury City Council to bring our asset management expertise to Whitefriars Shopping Centre," said chief executive officer Allan Lockhart.

"NewRiver's selection by the Council in a competitive tender process demonstrates that our strong relationships with retailers and track record of successful asset management makes us the clear choice for third-party retail asset owners."

Lockhart said that, against a growing trend of local authorities purchasing shopping centre assets and taking control of their town centres, NewRiver was "ideally positioned" to provide asset management expertise to them."

Colin Carmichael, chief executive of Canterbury City Council, added that the council's purchase of Whitefriars Shopping Centre in February was a "once-in-a-generation opportunity" to take control of one the city's key sites and ensure it worked for the benefit of the community.

"The council is very pleased to be partnering with one of the UK's leading retail asset managers in NewRiver to realise this ambition," Carmichael explained.

"Their passion and expertise give the council the confidence that Whitefriars will continue to go from strength to strength."

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