TIDMNRR
RNS Number : 9563U
NewRiver REIT PLC
18 July 2018
NewRiver REIT plc First Quarter Company Update
18 July 2018
Convenience & community focus delivers robust performance
and growing dividend
Allan Lockhart, Chief Executive commented: "This has been an
active period for NewRiver, in which our continued focus on
convenience & community retail and leisure assets,
characterised by frequent spend on everyday essential goods and
services, has enabled us to continue to deliver robust operational
performance despite wider sector headwinds. Our portfolio is
focused on the fastest growing and most sustainable sub-sectors of
the UK retail market, with grocery, convenience stores, value
clothing, health & beauty and discounters forming the core of
our retail portfolio, and a deliberately limited exposure to
department stores of just 0.1% of our total rent roll.
Since the start of this financial year we have invested over
GBP140 million across our core sectors of community shopping
centres, retail parks and community pubs at a blended initial yield
of 13%, demonstrating our disciplined approach to capital
allocation and the diversified nature of our assets. The
integration of Hawthorn Leisure, which we acquired in May 2018, is
progressing well and is on track for completion in early 2019.
Across our portfolio we are progressing a number of
opportunities to unlock further value, having identified the
potential to develop an additional 1,300 residential units across
our retail portfolio and commenced a review of the Hawthorn Leisure
portfolio to identify convenience store development sites. In
addition, we continue to recycle capital profitably, with GBP25
million of disposals completed or under offer, and over GBP30
million in the market. The 3% increase in our first quarter
dividend to 5.4 pence reflects our continued commitment to deliver
growing and sustainable cash returns to shareholders."
Acquisitions completed in core sectors at attractive entry
prices with opportunities for further value creation
-- Hawthorn Leisure acquired in May 2018 for GBP106.8 million,
representing a NIY of 13.6%; acquisition included a portfolio of
298 high quality community pubs and an established pub management
platform which is expected to generate at least GBP3 million of
annualised operating synergies; integration of the business is
progressing well, with a dedicated committee established to involve
all stakeholders in the process; integration completion expected in
Q4 FY19
-- Grays Shopping Centre acquired in June 2018 for GBP20.2
million, representing a NIY of 9.4% on the shopping centre element
and a capital value across the whole site of just GBP40 per sq ft;
well-located with the City of London accessible by train in under
35 minutes; now pursuing opportunities to meet demand for a budget
hotel, budget gym and discount food retailer, and to secure
planning permission to build up to 300 residential units
-- Hollywood Retail & Leisure Park, Barrow-in-Furness,
acquired in July 2018 for GBP15.3 million, representing a NIY of
8.7%; conversion of two existing units to introduce Aldi to the
asset to commence imminently
-- Acquisitions and the strength of our underlying cash flows
supported first quarter ordinary dividend increase of 3% to 5.4
pence (Q1 FY18: 5.25 pence)
Convenience & community focus continues to deliver robust
operating metrics
-- High level of retail occupancy sustained at 96.2% (March
2018: 96.5%); pub occupancy of 99.0% including Hawthorn Leisure
(March 2018: 99.0%); pub portfolio trading performance has
benefitted from World Cup
-- Shopping centre footfall outperformed the UK benchmark by 50
bps, down 2.5% on a like-for-like basis
-- Average retail rent remains affordable and sustainable at
GBP12.35 per sq ft (March 2018: GBP12.36 per sq ft)
-- Over 99% of Q1 rents already collected; retention rate of 94%
based on lease expiries and breaks during Q1
Portfolio contains in-built value creating opportunities
-- 50 leasing events across 160,800 sq ft securing annual rent
of GBP1.4 million; includes the letting of a 12,900 sq ft unit
formerly used for storage at The Broadway Shopping Centre,
Bexleyheath, to low cost gym operator The Gym on a 15 year lease
unlocking GBP162,500 of annualised incremental income; long term
deals on average +2.4% vs March 2018 ERV with an average lease
length of 7.9 years
-- Progress made on strategy to extract value from market
leading asset management platform; selected as asset manager by
local authority shopping centre owner subject to final
agreement
-- During Q1 completed a strategic review of entire portfolio,
identifying the potential to deliver up to 1,300 residential units
adjacent to or above our retail assets over the next 5-10 years, in
addition to the 1,100 units already included within our 1.9 million
sq ft risk-controlled development pipeline; residential opportunity
has potential to deliver up to GBP140 million of development
profit
-- On-site phase of Canvey Island Retail Park development
progressing well, with practical completion scheduled for Q3 FY19;
on completion, activates an annualised rent roll of GBP1 million
and a projected yield on cost of 9%
-- Continued progress with convenience store ('c-store')
development programme for The Co-operative: on-site with three
further c-stores, which on completion would bring our total number
delivered to 23; The Co-operative is currently reviewing sites
across the Hawthorn Leisure portfolio for c-store development
potential
Strong balance sheet underpins growth plans
-- Following acquisition activity, LTV of 35% (based on March
2018 valuations), increased from 28% in March 2018; LTV within
stated guidance of <40%; community pubs now account for 19% of
GBP1.4 billion portfolio following Hawthorn Leisure acquisition
-- Completed GBP2.2 million of profitable capital recycling on
terms 11% ahead of March 2018 valuation with a further GBP22.8
million of disposals under offer and GBP32.2 million in the
market
For further information
NewRiver REIT plc +44 (0)20 3328 5800
Allan Lockhart (Chief Executive)
Mark Davies (Chief Financial Officer)
Will Hobman (Head of Investor
Relations)
+44 (0)20 7251
Finsbury 3801
Gordon Simpson
James Thompson
About NewRiver
NewRiver REIT plc ('NewRiver') is a leading Real Estate
Investment Trust specialising in buying, managing, developing and
recycling convenience-led, community-focused retail and leisure
assets throughout the UK.
Our GBP1.4 billion portfolio covers over 8 million sq ft and
comprises 34 community shopping centres, 21 conveniently located
retail parks and over 600 community pubs. Having hand-picked our
assets since NewRiver was founded in 2009, we have deliberately
focused on the fastest growing and most sustainable sub-sectors of
the UK retail market, with grocery, convenience stores, value
clothing, health & beauty and discounters forming the core of
our retail portfolio. This focus, combined with our affordable
rents and desirable locations, delivers sustainable and growing
returns for our shareholders, while our active approach to asset
management and in-built 1.9 million sq ft development pipeline
provide further opportunities to extract value from our
portfolio.
NewRiver has a Premium Listing on the Main Market of the London
Stock Exchange (ticker: NRR) and is a constituent of the FTSE 250
and EPRA indices. 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 industry, 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 document. 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 document 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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END
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