NewRiver REIT (NRR) continued to show that there are still some attractive areas of the retail world. With chief executive Allan Lockhart at the helm, the portfolio has been built largely on convenience-related assets focused on non-discretionary spending. And the key point here is that rents remain relatively low at £12.36 per square foot (sq ft), which goes some way towards explaining tenant retention of 95 per cent and occupancy of 97 per cent. NewRiver has a risk-controlled development pipeline of 1.9m sq ft, but no new developments are started unless they are pre-sold or at least 70 per cent pre-let.
The portfolio also contains a number of pubs, to which it added a further 298 after the March 2018 year-end with the acquisition of Hawthorn Leisure, taking the total to 629. Some of these will come with surplus land that has the potential to be used to build retail outlets. There is already an agreement with the Co-op to deliver up to 40 convenience stores, on 15-year leases, with RPI-linked rents. More than 20 stores have already been handed over.
Analysts at Peel Hunt are forecasting adjusted net asset value at the March 2019 year-end of 297.2p, up from 292p in FY2018.
| NEWRIVER REIT (NRR) | ||||
| ORD PRICE: | 287p | MARKET VALUE: | £869m | |
| TOUCH: | 287-288p | 12-MONTH HIGH: | 369p | LOW: 265p |
| DIVIDEND YIELD: | 7.3% | TRADING PROPERTIES: | nil | |
| DISCOUNT TO NAV: | 2% | |||
| INVESTMENT PROP: | £1.23bn* | NET DEBT: | 39% | |
| Year to 31 Mar | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 241 | 23.1 | 38.0 | 16 |
| 2015 | 267 | 39.5 | 37.5 | 17 |
| 2016 | 295 | 69.5 | 39.2 | 18.5 |
| 2017 | 292 | 37.4 | 15.5 | 20** |
| 2018 | 294 | 46.9 | 16 | 21 |
| % change | +1 | +25 | +3 | +5 |
| Ex-div: | ** | |||
| Payment: | ** | |||
| *Including joint ventures **Not including 3p a share special dividend. Dividends paid quarterly. Fourth-quarter dividend of 5.25p paid on 25 May | ||||
