The properties are sited throughout the UK, with most in central, eastern and northern England. The majority will be new-build projects to be constructed on surplus land adjacent to the existing public houses, said the Co-op.
A smaller number of public houses will be either converted to convenience stores or redeveloped as standalone convenience retail stores. Some of the assets will be significantly expanded in size through the addition of an extension or new-build.
Open early next year
Unit sizes will range from 279m2 to 418m2, with the first of the new stores expected to open early next year.
Most of the new stores will use surplus land, such as car parks and garden space, while a small number of pubs will continue to operate in their original format under lease to NewRiver Retail.
The 15-year rental deal includes a no break clause and links rents to the annual Retail Price Index.
Chief executive of the Co-operative’s retail division Steve Murrells said the deal will help the retailer establish a leading position in local sales. “The Co-operative Group has a clear vision to establish itself as the best local food retailer in the UK and over the coming years our focus will be to develop and grow our existing convenience estate of over 2,000 stores,” said Murrells.
“Our focus is on convenience stores and a move away from larger stores, as we look to highlight our strengths and consolidate our position as number one in the competitive convenience market. To do this we are investing in our stores to ensure that the product offering, the service and the prices appeal to shoppers.”
Creative way to acquire stores
Stuart Hookins, head of portfolio strategy, acquisitions and disposals at The Co-operative Food, added the deal was a creative way to acquire stores. “The speed at which this acquisition was completed – four months from start to finish – is a testament to our decision making and ability to progress deals quickly,” he said.
Allan Lockhart, property director at NewRiver Retail, said the business had delivered on its intention to identify viable demand from major food store operators to expand their convenience store portfolios.
“The agreement is a prime example of how NewRiver’s successful strategy of strong retailer relationships, active asset management and risk-controlled development generates significant value through the creation of institutional investment class assets,” said Lockhart.
“The agreement significantly develops the Co-operative Group’s UK footprint and we look forward to expanding our strong relationship with them in the future.”
Last November NewRiver announced its £90M acquisition of a portfolio of 202 pubs from Marston’s, with the intention of converting land and buildings to alternative use, notably convenience stores.