Real estate investment trust Newriver has exchanged contracts for the disposal of its regeneration Shopping Centre in Cowley, Oxford for gross proceeds of £38.8m, reflecting a 4.9% premium to the asset’s latest valuation.
Newriver said on Wednesday that it had sold the Templars Square Shopping Centre asset to real estate investment manager and developer Redevco, subject to Oxford City Council’s freeholder approval to assign the headlease, release from a previous agreement and the expiry of a six-week judicial review period in relation to the planning decision notice.
Of the gross proceeds from the sale, £5.5m will be held in escrow as a rental and service charge guarantee and to cover the purchaser’s costs of agreeing to a new headlease. However, Newriver stated it expects to recover “a significant proportion of these funds”.
The disposal, excluding the escrow amount, reflects a net initial yield of 6.3%.
The consideration will be satisfied in cash and the disposal was expected to complete in the first quarter of 2022.
As of 0910 GMT, Newriver shares were up 0.58% at 86.40p.
