NewRiver REIT has acquired retail asset and development manager Ellandi Management in a deal worth up to £9m to create a business with £2bn of assets under management (AUM).
The acquisition involved an initial cash consideration of £5m, with an additional cash consideration of up to £4m subject to EBITDA performance, including realising savings through shared services, over a three-year earn out period.
The combined business will have circa £1.5bn of assets under management across a portfolio of 21 shopping centres and 18 retail parks. Including NewRiver’s wholly-owned portfolio of retail assets, this increases the total AUM to £2bn across a portfolio of 44 shopping centres and 29 retail parks and an existing fee income stream of £8.2m.
The 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.
Ellandi co-founders and owners Morgan Garfield and Mark Robinson, will join NewRiver as head of capital partnerships and head of regeneration, respectively. They will also join NewRiver’s executive committee.
Allan Lockhart (pictured), chief executive of NewRiver REIT, told BE News: “What we’re going to do over the coming months is plan an orderly integration. The Ellandi name will retire and I’m determined that going forward, we’re one company, so we need to work hard to make sure we get that integration right. In many ways they have similar shared values as we do. They’re B Corp certified. We’re very strong on ESG. We are also very focused on our people as they are. We’ve got a really good starting point from that perspective. We want to make sure we get the integration done in the right way and carefully and we move forward as one company under the NewRiver brand.
Lockhart added that the Ellandi team would be integral to the expansion of its capital partnership business. “We think that regeneration and levelling up are going to be a big feature of the market going forward and rightly so because there are many communities up and down the country that have been left behind.
“There’s probably nobody better in the real estate market than Mark in terms of regeneration and levelling up. We think that will be a good growth area for us. Retail real estate has become more and more operational and I think that having a platform with a lot of capability, expertise and experience and access to data and insights, plus having a bit of a balance sheet to be able to co-invest, puts us in a really strong position to grow our capital partnerships business, where we are offering high quality asset management and development management services with the ability to co-invest with investors that want to come into the retail real estate market. The transaction with Ellandi will accelerate the growth of our capital partnership business.”
Robinson said: “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.”
