Acquisition of Ellandi Management Limited

NewRiver REIT PLC

04 July 2024

 

NewRiver REIT plc

("NewRiver" or the "Company")

Acquisition of Ellandi Management Limited

NewRiver is pleased to announce the acquisition of Ellandi Management Limited ('Ellandi'), an asset and development management business focused on UK retail and regeneration. This acquisition provides NewRiver's existing Capital Partnership business with additional scale and diversification, as well as introducing complementary experience of managing destination shopping centres and regeneration projects, and is consistent with NewRiver's strategy to deliver earnings growth in a capital-light way.

Allan Lockhart, Chief Executive, commented: "The acquisition of Ellandi supports our ambitions to expand our Capital Partnerships business and grow its fee income. We have watched the impressive growth of Ellandi over the last 16 years, despite limited capital resources, which has been in no small part due to the entrepreneurial energy and expertise of Morgan, Mark and their team.

We believe there will be considerable opportunities in the retail real estate market to accelerate the growth of our business from this point. By bringing together two high-quality teams with complementary skills and experience in asset management and regeneration, together with the balance sheet resources we have available, we are well positioned to participate in these opportunities, both on the balance sheet and through Capital Partnerships."

Strategic rationale and additional information on Ellandi

The acquisition is aligned with NewRiver's strategy to expand its Capital Partnership business over the medium term, leveraging its position as one of the largest specialist retail real estate asset managers in the UK to partner with new and existing owners of retail property, who recognise the importance of track record and specialism in this highly operational asset class with the potential to deliver compelling forward-looking returns, while maintaining significant cash resources to fund balance sheet growth opportunities.

The two co-founders and owners of Ellandi, Morgan Garfield and Mark Robinson, will join NewRiver as Head of Capital Partnerships and Head of Regeneration, respectively. Morgan and Mark will also join NewRiver's Executive Committee. The Ellandi business brings with it a portfolio of 16 shopping centre asset management mandates, covering over 6.3 million sq ft, with 10 different partners. Ellandi also brings extensive experience working with public sector owners to deliver regeneration, with current projects including the regeneration of Blackpool Town Centre and Strand Shopping Centre in Bootle. During the year ended 30 April 2024, Ellandi's fee income was £5.7 million¹ and EBITDA was £1.1 million¹. The acquisition has been made for an initial cash consideration of £5 million, with additional cash consideration of up to £4 million subject to EBITDA performance, including realising savings through shared services, over a three year earn out period.

The combined Capital Partnership business will have significantly increased scale, with Assets Under Management ("AUM") of c.£1.5 billion across a portfolio of 21 shopping centres and 18 retail parks, with 13 different partners. Including NewRiver's wholly owned portfolio of retail assets, this increases to total AUM of c.£2.0 billion across a portfolio of 44 shopping centres and 29 retail parks and an existing fee income stream of £8.2 million².

Mark Robinson, Co-Founder, Ellandi added: "Morgan and I are extremely proud of what the team at Ellandi have achieved to date in delivering sustainable change to the UK's retail places and believe this transaction creates an exciting opportunity to combine two market leading retail asset management businesses with shared growth ambitions. Together we will bring unrivalled insights into UK consumer and retailer trends through the extensive data of our enlarged footprint. NewRiver is passionate about retail and recognises the important role it plays at the heart of communities, as well as having a similar culture and shared values. I look forward to our business becoming part of the NewRiver team and applying our combined expertise in the sector."

Notes

1.	Consolidated Ellandi Management Limited and Ellandi LLP
2.	The sum of Consolidated Ellandi Management Limited and Ellandi LLP fee income for year ended 30 April 2024 and NewRiver REIT plc Asset management fees for the year ended 31 March 2024

For further information

NewRiver REIT plc				[phone]
Allan Lockhart (Chief Executive) Will Hobman (Chief Financial Officer)

FTI Consulting				[phone]
Dido Laurimore Giles Barrie

About NewRiver

NewRiver REIT plc ('NewRiver') is a leading Real Estate Investment Trust specialising in buying, managing and developing resilient retail assets throughout the UK.

Our £0.54 billion UK wide portfolio covers 6.1 million sq ft and comprises 24 community shopping centres and 12 conveniently located retail parks occupied by tenants predominately focused on essential goods and services. In addition we manage 18 retail parks and 21 shopping centres on behalf of Capital Partners, taking our total Assets Under Management to £2 billion. Our objective is to own and manage the most resilient retail portfolio in the UK, focused on retail parks, core shopping centres, and regeneration opportunities in order to deliver long-term attractive recurring income returns and capital growth for our shareholders.

NewRiver has a Premium Listing on the Main Market of the London Stock Exchange (ticker: NRR). Visit www.nrr.co.uk for further information.

LEI Number: 2138004GX1VAUMH66L31

Forward-looking statements

The information in this announcement may include forward-looking statements, which are based on current projections about future events. These forward-looking statements reflect the directors' beliefs and expectations and are subject to risks, uncertainties and assumptions about NewRiver REIT plc (the 'Company'), including, amongst other things, the development of its business, trends in its operating environment, returns on investment and future capital expenditure and acquisitions, that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statements. 

None of the future projections, expectations, estimates or prospects in this announcement should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects have been prepared are correct or exhaustive or, in the case of the assumptions, fully stated in the announcement. As a result, you are cautioned not to place reliance on such forward-looking statements as a prediction of actual results or otherwise. The information and opinions contained in this announcement are provided as at the date of this document and are subject to change without notice. No one undertakes to update publicly or revise any such forward looking statements. No statement in this announcement is or is intended to be a profit forecast or profit estimate or to imply that the earnings of the Company for the current or future financial years will necessarily match or exceed the historical or published earnings of the Company.

 

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