TIDMNRR
RNS Number : 0902K
NewRiver Retail Limited
14 April 2015
NewRiver Retail Limited
("NewRiver" or "the Group" or "the Company")
Fourth Quarter Portfolio Update
Strong performance in final quarter with successful equity
financing, acquisitions and continued active asset management
across the portfolio
NewRiver Retail Limited (AIM: NRR), the UK REIT specialising in
value-creating retail property investment and active asset
management, announces the following portfolio update for the fourth
quarter, 1 January 2015 to 31 March 2015.
The fourth quarter has been another highly active period for
NewRiver. The Group completed a number of key acquisitions which
has grown the portfolio by 1.4% to a record GBP811 million at the
end of March 2015 (December 2014: GBP800 million) and continued to
achieve a significant number of value-enhancing asset management
and development initiatives.
HIGHLIGHTS
-- Assets under management increased by 1.4% to GBP811 million
at the end of March (December 2014: GBP800 million)
-- Completion of the GBP75 million equity fundraise at 275 pence
per share, enabling the Company to acquire the remaining 90% equity
stake of a shopping centre portfolio within the Bravo joint venture
(a fund advised or managed by Pacific Investment Management Company
LLC)
-- Total of GBP89.26 million of acquisitions at an average net
initial yield of 7.89%, comprising the shopping centre portfolio
within the Bravo joint venture, one major retail and leisure park
and two separate retail warehouse investments
-- Total of GBP5.53 million of disposals at an average net initial yield of 7.3%
-- Agreed two new debt facilities which together reduce
NewRiver's cost of debt from 4.02% to 3.82%, increase debt maturity
from 3.7 years to 4.6 years and further strengthening the Company's
banking relationships
-- Active asset management continues to create income growth
with the total rent roll under management for the period increasing
1.6% to GBP71.8 million per annum (December 2014: GBP70.7
million)
-- Completed 55 new lettings and lease renewals securing a total
of GBP973,425 per annum in rent. New long-term leasing events
achieved a rental income of 10.9% above valuation ERV with an
average lease length of 10.5 years
-- Maintained a stable retail portfolio occupancy rate of
96%
-- Weighted Average Lease Expiry ("WALE") for the retail
portfolio remained stable at 7.4 years (December 2014: 7.6
years)
-- Sustained an affordable average retail rent of GBP12.64 per
sq ft (December 2014: GBP12.72 per sq ft)
-- During the period the top 15 retailers within the portfolio
defined by rental income accounted for 26.6% of total rent. These
are all strong national covenants including Poundland, New Look,
Primark, Boots, Superdrug, Asda, Wilkinson, Argos and Dixons
Carphone
-- Footfall continues to perform well with a total of 22 million
across the portfolio for the period; annual footfall for the
portfolio totals over 122 million
-- Significant progress continues in the pub portfolio
conversion programme with a number of planning applications
submitted for which several planning permissions have been
successfully secured
-- Plans are well-advanced to submit five major planning
applications enabling the Company to deliver nearly one million sq
ft of new development space for retail led and mixed-use, including
hotels, leisure and residential
Fourth Quarterly Dividend:
In December 2014, the Board declared a third quarterly dividend
of 4.25 pence per Share to be paid on 30 January 2015. On 8 April
2015, the Company announced a fourth quarterly dividend of 4.25
pence per Share to be paid on 18 May 2015 as a REIT Property Income
Distribution to shareholders on the register at close of business
on 17 April 2015. The total dividend for the year ended 31 March
2015 declared and paid to date will therefore amount to 17 pence
per Share.
David Lockhart, Chief Executive at NewRiver Retail, said:
"We are delighted to have had such a highly active and
significant quarter, resulting in a strong finish to our financial
year ended 31 March 2015. During the period, the Company completed
the key acquisition of the remaining 90% of a portfolio of five
shopping centres contained within the Bravo JV, financed through a
successful placing which reflects continuing shareholder support of
our proven strategy. The Company continues to deliver on its core
strategy of generating above market returns, through targeted
acquisitions supported by an active asset management and risk
controlled development programme."
ACQUISITIONS AND DISPOSALS:
During the period, NewRiver announced the following Acquisitions
and Disposals totalling GBP94.8 million:
-- Acquisition from LVS, a subsidiary of Bravo (a fund advised
or managed by Pacific Investment Management Company LLC), of the
remaining 90 per cent of a joint venture (the "NewRiver Retail
Property Unit Trust") following the Company's successful GBP75
million equity raise. The portfolio, comprising five UK-wide
shopping centres and one high street asset all previously
part-owned by NewRiver, was acquired for a cash consideration of
GBP71 million, reflecting a net initial yield of 7.75% on the
acquisition price
-- Acquisition of Lower Audley Street Retail and Leisure Park,
Blackburn, for a total consideration of GBP14.6 million, reflecting
a net initial yield of 8.85%
-- Acquisition of Sealand Road, Chester, a 10,591 sq ft retail
unit let to Staples from a local authority pension fund for GBP2.1
million, reflecting a net initial yield of 8.24%. Staples has a 25
year lease on the unit expiring in 2017 at a rent of GBP183,000
pa
-- Acquisition of Great Eastern Square, Felixstowe's only retail
warehouse scheme, a 17,180 sq. ft. unit let to Homebase with 5.75
years remaining on the lease, from a private investment company for
GBP1.56 million reflecting a net initial yield of 7.84%
-- Sale of a 34,705 sq. ft. retail unit within the Dolphin
shopping centre in Poole, let to Wilkinson, to Legal and General
for GBP2.3 million, reflecting a net initial yield of 7.27%
resulting in an IRR of 15.5% since acquisition in 2010
-- Sale of a 20,100 sq. ft. unit in Paisley occupied by
Halfords, for GBP1.8 million, at a net initial yield of 8.44% to a
private investor reflecting a levered profit on cost of 56%. The
Company acquired the unit as part of the Linear portfolio in June
2014 for GBP1.4 million at a net initial yield of 10.93%
-- Sale of 40 Fishergate, a 10,000 sq. ft. former HSBC bank in
Preston for GBP1.43 million to a private investor at a yield of
5.96%. Acquired in April 2014 for GBP0.7 million, NewRiver
subsequently secured planning consent to convert the building to a
city centre convenience store which the Company simultaneously
pre-let to J Sainsbury on a 15 year lease. The sale reflects an
unlevered profit on cost of 45%
Financing:
During the final quarter of the financial year, the Company has
agreed two new debt facilities. Both facilities reduce the
Company's cost of debt, increase debt maturity and further
strengthen the Group's banking relationships.
The first facility, arranged by Santander and HSBC, has
refinanced the Camel II debt which the Company recently acquired
from LVS, a subsidiary of Bravo (a fund advised or managed by
Pacific Investment Management Company LLC). The bank margin has
reduced from 350 bps to 175 bps (initially 195 bps), maturity
improved from 2017 to 2019 and total facility size increased from
GBP43 million to GBP69 million.
The second facility is a Revolving Credit Facility ("RCF")
arranged by Barclays Bank Plc, totalling GBP53 million. The RCF has
refinanced the Company's Camel I portfolio which was initially
funded by the Clydesdale Bank. The bank margin has reduced from 250
bps to 195 bps and debt maturity increased from 1.3 to 5 years.
As a result of these transactions, the Group's average interest
rate will reduce from 4.02% to 3.82% and average debt maturity
increases from 3.7 years to 4.6 years.
ACTIVE ASSET MANAGEMENT & DEVELOPMENT:
Marston's pub portfolio (2)
The final quarter of the financial year has seen a major
acceleration in progress across the Company's pub portfolio. A
number of planning applications were submitted to meet targets that
were set for the delivery of the Company's development programme
and the first planning permissions have been successfully secured
in several locations. The progress follows the Agreement for Lease
with The Co-operative Group Limited in September 2014 to lease 63
new convenience stores from the portfolio. The current portfolio
EBITDA is performing above the guaranteed income received from
Marston's Plc by 2.08%. The Company continues to register strong
interest from national retailers seeking to expand their footprint
by growing their convenience store penetration, which is ideally
suited for the potential alternative use identified at the time of
the original portfolio purchase.
Shopping Centres:
Abbey Centre, Newtownabbey, Belfast (2)
NewRiver has completed the enabling works for the delivery of a
brand new 43,000 sq ft Next store across three storeys, for which
the Agreement for Lease will generate a rent of GBP475,000 per
annum for the Company. NewRiver is now undertaking the tendering
process for the construction works.
Regent Court, Royal Leamington Spa (1)
The Company is well-advanced in the delivery of its strategy to
re-position Regent Court to be the town's principal food leisure
destination and has secured three new lettings. Lease terms range
from 5-20 years and generate a combined new rental income of
GBP132,000 per annum. The landmark new lease was with the upmarket
French restaurant chain Cote, which signed a new 20 year lease on a
3,500 sq ft unit generating a rental income of GBP85,000.
Refurbishment work to upgrade the common parts including
re-painting, improved signage and new branding is due to commence
in spring this year.
Priory Meadows, Hastings (2)
Following the Company's acquisition of Priory Meadows last year
(the main shopping centre in Hastings, West Sussex) NewRiver has
quickly secured a number of lease renewals and new lettings
attracting a number of key retailers to enhance the overall retail
mix. The Company exchanged contracts with UK-wide footwear retailer
Deichmann to occupy a 3,500 sq ft unit reactivating a unit that had
remained vacant for over three years prior to NewRiver's purchase.
Deichmann is paying a rent of GBP100,000 per annum on a new 10 year
lease. In addition, fashion retailer Schuh has taken a 3,900 sq ft
unit in the centre on a 10 year lease at a rent of GBP50,000 per
annum. Books and stationery operator Cards Direct has taken a 2,803
sq ft unit on a 10 year lease at a rent of GBP60,000. These new
lettings are ahead of forecast rental value.
Furthermore, NewRiver has agreed lease renewals with a number of
existing strong covenant retailers ranging from one to five years.
These include H Samuel and Eem Sabai, generating annual rental
income of GBP61,000.
The Sovereign Centre, Boscombe (1)
NewRiver has agreed terms with new value family fashion retailer
Pep&Co to take a 4,153 sq ft unit on a five year term.
Pep&Co launches in the UK this summer selling a range of
affordable fashion products similar to the fashion lines offered
within British supermarkets. To date Pep&Co has taken two
stores within the NewRiver portfolio, in Boscombe and newly
acquired Warminster, and are in advanced negotiations with NewRiver
on a number of other locations as part of the retailer's roll-out
of its first 50 stores within the UK by July 2015.
The Promenades, Bridlington (1)
This popular Spa town in East Yorkshire attracts a wide footfall
from across the region and NewRiver has secured key lettings,
including the creation of a new anchor food court. National
pharmacy chain Boots, has taken a 10 year lease on a prominent
3,367 sq ft unit at an annual rent of GBP30,000. The previous
retailer, Sole Diva, is to maintain its presence in The Promenades
by relocating to a near-by unit within the centre.
Demonstrating the Company's ability to enhance and unlock
additional value, NewRiver has secured a letting to Milcliffe Ltd
on a new 20 year lease on a 10% turnover rent with a minimum of
GBP65,000 per annum creating a new food court to the centre.
Milcliffe Ltd will incorporate Burger King and Roosters Chicken, to
operate as a key food court anchor through the amalgamation of four
formerly vacant units.
Merlin's Walk, Carmarthen (1)
Surf fashion retailer Saltrock has taken a new lease for a 1,300
sq ft unit on a 10 year term, generating GBP25,000 in rental income
per annum for this West Wales coastal shopping destination.
Templars Square, Cowley (1)
Cheltenham & Gloucester has renewed its lease in Oxford's
largest indoor shopping centre, Templars Square, increasing the
term to five years on the 1,475 sq ft unit increasing the rental
income to GBP28,750 per annum. Pleasingly, Templars Square has seen
two further renewals in the period generating an additional
GBP26,500 of annual rental income.
Burns Mall, Kilmarnock (1)
Premium jeweller Warren James has taken a new 10 year lease for
a 1,195 sq ft unit which will generate a rental income of GBP22,500
per annum.
Newkirkgate, Leith, Edinburgh (2)
The City of Edinburgh Council have removed their break option,
due later this year, and extended their lease of 6,800 sq ft of
office space at GBP74,000 per annum to 2025. In addition to this,
Store Twenty One, the value fashion retailer, has taken a turnover
based 5 year lease for Unit 37/38 extending to 3,400 sq ft and are
trading above expectations. The completed programme of enhancement
work which includes the creation of a brand, signage, the
installation of cedar panelling, free WiFi, redecoration and
improved lighting throughout, together with the mall resurface work
due to complete this summer, will significantly revitalise and
enhance the shopping experience at the centre.
The Beacon Centre, North Shields (2)
NewRiver has secured a new 5 year lease to Nail Fairy at
GBP22,000 per annum in addition to two lease renewals to leading
retail operators Poundland and Card Factory. Poundland has signed a
new 10 year lease to remain in the existing 9,000 sq ft unit at a
rent of GBP70,000 per annum. Card Factory has renewed their lease
for a further five years generating an income of GBP27,800 for the
existing 1,748 sq ft unit.
Gloucester Green, Oxford (2)
NewRiver's strategy to re-develop and position Oxford's market
square as a food and leisure destination is progressing well with
the Company securing a significant new food operator, El Mexican,
which has signed a 10 year lease at a rent of GBP45,000 per annum
for a 1,099 sq ft unit.
The Forum, Wallsend (1)
Following the successful planning consent in January 2015, work
will begin on site in early summer 2015 for the delivery of phase
two of the major regeneration at The Forum. Phase two comprises the
development of an adjoining site to create a new 18,500 sq ft food
store, drive-through, new car park and improved common parts
together with an extensive centre refurbishment programme.
NewRiver has also secured a lease renewal with Greggs on a five
year term for the 2,410 sq ft unit generating GBP32,220 in rental
income per annum.
Three Horseshoes Walk, Warminster (1)
Acquired in September 2014, NewRiver has quickly agreed terms
with Pep&Co, the new-to-market value fashion retailer, on a new
10 year lease for a 4,528 sq ft unit. The new occupier will
generate a rental income of GBP75,000 per annum.
Albert Square, Widnes (3)
The Company has completed a lease re-gear with Iceland on its
8,468 sq ft store to extend its term by an additional 10 years from
1 Jan 2018 and incorporating a minimum rental uplift from GBP76,000
per annum to GBP82,650 per annum or open market rent. The terms
agreed are ahead of ERV and secures another long term key anchor
retailer.
Horsefair, Wisbech (1)
NewRiver is pleased to confirm that Santander Bank has renewed
its lease signing a new 10 year lease at an annual rent of
GBP21,750 per annum for its existing 1,220 sq ft unit.
Retail Warehouses:
Mount Street Retail Park, Wrexham (1)
Following the acquisition of Mount Street Retail Park in
Wrexham, part of a strategic portfolio of retail warehouses that
NewRiver acquired in June 2015, the Company has secured a new
letting to Euro Car Parts for a 8,000 sq ft unit on a 10 year lease
at a rent of GBP89,628 per annum ahead of business plan forecast.
The unit had been vacant for over three years prior to NewRiver's
acquisition.
Clough Road Retail Park, Hull (1)
NewRiver has successfully secured planning consent for Clough
Road Retail Park, acquired in June 2015 as part of a strategic
portfolio of retail warehouses. The consent allows for the
amalgamation of two existing units to create a single 30,000 sq ft
unit with full cover mezzanine, widening consent and removing
previous inhibitive restrictions for the retail park, demonstrating
NewRiver's ability to efficiently unlock additional value.
Commercialisation:
In the final quarter, commercialisation income has performed 11%
ahead of forecast for the period accounting for the anticipated
post-Christmas dip to achieve GBP459,490 (December 2014:
GBP511,042). Notable Q4 performers included Leamington Spa,
Newtownabbey, Hastings, Newton Mearns and Fareham, performing
between 10 to 25% ahead of forecast.
Leasing:
Effective from 1(st) April 2015 NewRiver has adopted the Model
Commercial Lease ("MCL") across the portfolio. The MCL was devised
by the British Property Federation with input from multiple
solicitors, institutional landlords and occupiers, to produce a
standardised modern lease which reflected the current shift in
acceptable variations and shorter lease terms. The MCL will result
in a more efficient leasing process facilitating earlier occupation
and income generation. Adopting the MCL is a further demonstration
of NewRiver's ability to adapt to changing market conditions and
work with retailers to ensure efficient leasing processes saving
both parties time and costs.
Property Management:
During the period NewRiver has successfully completed the
installation of a fully integrated finance and management system
that provides a sophisticated platform to further drive
efficiencies across the portfolio.
Key
(1) Refers to NewRiver Retail 100% owned assets
(2) Refers to the joint venture with Bravo II (funds advised or
managed by Pacific Investment Management Company LLC)
(3) Refers to the Barley Joint Venture
-ends-
For further information
NewRiver Retail Limited Tel: 020 3328 5800
David Lockhart, Chief Executive
Mark Davies, Finance Director
Bell Pottinger Tel: 020 3772 2500
David Rydell / James Newman /
David Bass
Liberum Tel: 020 3100 2000
Richard Crawley / Jamie Richards
Peel Hunt LLP Tel: 020 7418 8900
Capel Irwin / Alex Vaughan /
Hugh Preston
About NewRiver
NewRiver Retail Limited is an AIM listed REIT. The Company is a
specialist real estate investor and asset manager focused solely on
UK retail with a particular focus on food and value retailing.
NewRiver Retail was named Property Company of the Year - Retail
& Leisure at the Estates Gazette Awards at the close of
2014.
The management team, with over 100 years combined experience in
the UK commercial property market, actively engages with retailers,
stakeholders and consumers. NewRiver Retail is one of the UK's
largest shopping centre owner/managers with assets under management
of GBP811 million principally comprising 29 UK wide shopping
centres, further nationwide retail assets and a portfolio of 202
public houses principally suitable for conversion to alternative
uses. The portfolio has 1,384 occupiers, a total of over 5.4
million sq ft, total annual footfall of over 122 million and a
retail occupancy rate of 96 per cent.
The Company's activities include active and entrepreneurial
asset management and risk-controlled development, utilising both
its own balance sheet and co-investment joint venture
structures.
Founded in 2009, NewRiver has become the UK's leading
retail-focused property investment business. The Company's shares
were admitted to London's AIM in September of the same year. For
more information on NewRiver, please visit www.nrr.co.uk .
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCLXLLFEZFFBBL
Newriver Reit (LSE:NRR)
Historical Stock Chart
From Apr 2024 to May 2024
Newriver Reit (LSE:NRR)
Historical Stock Chart
From May 2023 to May 2024