NewRiver Reit (NRR) has had a busy six months to the end of September, changing its name and moving to the main listing on the London Stock Exchange. The retail property landlord also delivered a master class in how to prosper in such times of uncertainty, and while the inevitable downward valuation on the property portfolio hit headline profit, the more important net property income figure, boosted by acquisitions, rose by 41 per cent to £33.6m.
NewRiver was quick to spot a distressed sale by an open-ended property fund, and bought a retail warehouse in Sheffield for £18m. The existing tenant then agreed to a £12.25m payment for early surrender of the lease. As this is classed as property income, there could be a special dividend next year.
Specialising in convenience stores and non-discretionary spending, NewRiver has avoided the markdown afflicting the broader retail sector, delivering an ungeared total property return of 2.6 per cent, outperforming the IPD All Retail benchmark by 310 basis points.
NewRiver also made its biggest acquisition to date with the £120.3m purchase of the Broadway shopping centre and Retail Park in Bexleyheath. As well as an attractive entry price, there is scope for superior rental growth and sharper asset management.
Analysts at Peel Hunt are forecasting adjusted net asset value at the March 2017 year-end of 285p (from 295p in 2016).
| NEWRIVER REIT (NRR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 319p | MARKET VALUE: | £745m | |
| TOUCH: | 316-319p | 12-MONTH HIGH: | 362p | LOW: 269p |
| DIVIDEND YIELD: | 6.1% | TRADING PROPERTIES: | nil | |
| PREMIUM TO NAV: | 10% | NET DEBT: | 64% | |
| INVESTMENT PROPERTIES: | £1bn | |||
| Half-year to 30 Sep | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p)* |
|---|---|---|---|---|
| 2015 | 295 | 42.2 | 28.3 | 9 |
| 2016 | 289 | 11.6 | 4.7 | 10 |
| % change | -2 | -73 | -83 | +11 |
Ex-div: 29 Dec Payment: 27 Jan *Dividends paid quarterly. Second quarter paid on 28 October. XD and pay dates refer to third-quarter dividend of 5p | ||||
