NewRiver Retail, the UK-based specialist food and value retailer, is set to acquire a portfolio of 202 public houses from Marston’s in a deal worth £90m, to convert the locations into retail outlets.

The companies have exchanged the contracts for the acquisition, which is funded by BRAVO II joint venture partnership, managed by Pacific Investment Management Company. Both the partners will take up equal stake in the portfolio.

The acquired property comprises of an average gross internal area of 3,150ft2, site area of 29,000ft2, and on-site car parking of 24 spaces.

NewRiver Retail chief executive David Lockhart said that the acquisition marks a major achievement for NewRiver through the effective deployment of proceeds from the summer capital fundraising and further strengthens its joint venture partnership with BRAVO II.

"This off market transaction is a highly innovative opportunity for NewRiver to further demonstrate its proven risk-controlled retail development and asset management skills," added Lockhart.

NewRiver is keen to expand its foothold in food store chain by transforming the public houses into food convenience stores, drive-through food outlets, residential, and medical centres.

"With increasing demand from all of the major supermarket groups for Convenience Stores substantially outstripping supply, the Portfolio provides a very attractive opportunity to generate capital profits through the conversion of the public houses into Convenience Stores underpinned by an attractive cash on equity return from a FTSE 250 company," explained Lockhart.

Under the agreement, Marston’s has secured a minimum four-year leaseback term, which can be extended to five years.

During this period, the pub-owner will undertake management and operation responsibilities, paying an annual rent of £12,23m.