Newriver Reit Share Discussion Threads

[speedsgh] 30/8/2018 10:53

@Specto - Great post 603. What is the retail park near you called? Do you know who owns it?

EDIT - That list of occupants is truly scary. The only ones I would be confident about are McD & Currys. And if the owners struggle to fill the empty units, those two will likely been on their way too due to severely reduced footfall.

[spectoacc] 30/8/2018 09:03

Robots for sure, but I'm completely unconvinced by driverless cars. I know that may be like saying the internal combustion engine will never replace the horse, but unless all vehicles were driverless (including bikes?), unmanned vehicles just don't seem to work in the real world.

At least for the retail park I referenced above, converting to resi is an option. Death of the High St is a bit harsh on the (older) minority who don't shop online tho.

Let's hope NRR can navigate it all, as they seem to be thus far. I'd rather have money in them than in Amazon at current valuation.

[fenners66] 30/8/2018 09:00

You are right - the problem with retail spaces - they fold like a pack of cards when some of the once more popular shops depart.

Then you drive up and down the motorways of Britain and see huge warehouses being completed and occupied.

It is obvious the trade is moving on line and the jobs in stores lost to delivery operations - how soon before they employ only robots and driverless vehicles ?

[speedsgh] 30/8/2018 08:48

@Specto - Hmmm. A few spring to mind. Debenhams for one. No idea on timing though.

[spectoacc] 30/8/2018 08:40

Thanks @speedsgh. I should be more reassured than I am, but I see those lists and think "bloody hell, who's next?" :)

[janekane] 30/8/2018 06:07

Do we own any of the house of Fraser sites

[porsche1945] 29/8/2018 10:11

Im not sure it is the quality company so many investors love to believe, like a great deal of stuff listed in the uk it has a decent dividend but fast declining business model, plus that idiot Woodford in it so thats the kiss of death. The UK severely damaged by brexit fiasco and the High St looks to be heading down the toilet. Alot of their proerty portfolio looks like a damage limitation exercise as rents are only likely to fall, especially with the looming brexit recession. The trouble is there are just not many good growth stocks that are not high risk priced in sterling, lots in the US but always the possible currency shock altho sterling looking like it will tank even more so maybe as good a time as ever.

[essentialinvestor] 28/8/2018 10:51

There are societal changes, from the rise of gaming, cheap supermarket alcohol,
the proliferation of food home delivery options, to the easy availability
of recreational drugs. Disposable income pressure is a factor.
Also worth keeping in mind we have generations now starting working life
with significant student debt, combine that with housing/rental costs and you can
see the challenge.

[chucko1] 28/8/2018 10:10

“Beyond my experience of reality” is not an analytic technique that I have much faith in.

1. How do you know that your pub died because of the smoking ban? Perhaps anecdotally - fine(ish).
2. How do you know that this was the same factor “that was repeated all over the country”?
3. Explain why an overnight event (smoking ban) in July 2007 did not cause many more pubs to close in the early years rather than uniformly the past 11 years? Does this not suggest other factors at play also? Strongly suggest, in fact.

Other factors are lower disposable income since the financial crash (2008), 42% in beer duty from 2008 - 2013, supermarket discounting, other lifestyle changes. In fact, the British Beer and Pub Association have said that it is pretty impossible to assess the marginal effects of individual factors.

Additionally, the BBPA goes on to say that many pubs have actually thrived since the ban. To do so, they have altered their business model to entice families and serve better food. I expect that NRR are fully aware of these shifting tides. After all, they do talk about “family-focused destinations” as one of their investment criteria.

[fenners66] 28/8/2018 01:16

Chucko - the decline in pubs since the smoking ban was introduced is marked - how anyone can say it has not contributed statistically is beyond my experience of reality.

I worked part time in a pub once upon a time. It was thriving. It's since been demolished and houses built on it.
A lot of the punters there smoked - when they stopped attending it died.

This has been repeated across the country.

[chucko1] 27/8/2018 11:52

Fenner66, you don’t think the management of NRR has taken all this into account?

14 pubs a week is 700 per year. This has been a constant rate since 2007 (7,000 closures out of a total of about 56,000 the past decade).

People are drinking less beer, so any place that had too many pubs would clearly suffer. Once again, I expect that management of NRR are not unaware of this and have selected locations prudently. That said, those who have shunned pubs will be doing something different with their pub-money. And probably nearby.

The smoking ban, in of itself, has had no statistical effect, I understand, on either pubs or restaurants.

[fenners66] 27/8/2018 10:14

SpectoAcc - yes Pubs are relevant to NRR - but more so the decline of pubs since they introduced a smoking ban is really obvious.

Yes they are getting turned into housing developments and if you own the land you could turn a profit that way.

But the stat of 14 pubs a week closing is for this year....

At the end of the day stock prices are driven (at least initially) by sentiment and the sentiment for this sector is not good.

[topvest] 26/8/2018 18:59

NRR is a quality company, but buying in a clear downtrend like this is risky. Will keep on my watch list for now. Its certainly difficult to see retail assets bouncing back anytime soon. I think the post above somewhere, that if you didn't have the chunky dividend yield, what's the attraction is fair. Think I tend to agree with that assessment actually as your dividend is being wiped by capital losses at the moment.

[eeza] 26/8/2018 17:44

Yes, they're all jumping on the band wagon, but the Landlords are going to have to grow a pair sooner or later.

[skyship] 26/8/2018 15:36

eeza - no doubt in my mind that the landlords should vote down this CVA. Sheer chutzpah and one not really needed!

[eeza] 26/8/2018 08:49

Not specific to NRR.

[spectoacc] 26/8/2018 07:44

High Streets have to change - some are, some aren't. Interestingly, in the few places I have commercial, there's zero rates due to the size of the shops. So to blame rates is too simple IMO. "Blaming" online is a different matter, and critical mass also matters - NRR's still seem well occupied.

@fenners66 - I assume you mentioned the pubs due to NRR's large exposure :)

@Sky - hard Brexit?

[fenners66] 26/8/2018 00:47

"5. Non-family households. Similar to 4, the need for human contact for those that live alone."

I don't think you can count shopping as the saviour for loneliness - even pubs are still closing at the rate of 14 a week.

Rates are killing retail /pubs etc so buildings are being demolished. In response councils are finding more varied ways to raise income from , parking charges and fines, thus discouraging casual shopping making the situation worse.

There will be a balance - where the strongest survive but in my nearest town there are huge areas of vacancy even after a good run for other commercial property.

[skyship] 25/8/2018 17:09

EI - you're too modest.

There is a big, a very big difference twixt now and the last property cycle peak - every propco without fail has adjusted its debt to fixed (or hedged) low interest rates on long maturity.

Without a serious recession; and there is very little sign or reason for that anytime soon, most propcos can now ride out any storm without equity dilution. Couple that to regional property yields still plentiful above 8%, I detect no signs of valuation over-heating.

[essentialinvestor] 24/8/2018 17:51

Hp, SKY has probably forgotten more about this sector than I will
ever know, mine is more of a passing interest, with occasionally large positions,
as per HSTN previously.

On GPOR, the strategy looks to be shrinking the business by capital returns
(accompanied by a matching share consolidation). It's then easier to enjoy
outsized gains through the next cycle, particularly with the benefit of
ultra low gearing, and capital to deploy when needed.

[hpcg] 24/8/2018 16:40

Right - if the smart people are selling rather than buying that does suggest they'd rather have the cash, or not debt, than the rental stream. As EI points out an RI can permanently impair existing equity, which in any case would have be dropping in value because of the distress. Without a capital raise, and with a sufficient time horizon, it would be possible to close ones eyes to a lower NAV if the yield on purchase price was sufficient. To an extent there is some protection here in the latter case, as at today's purchase price a distribution trimmed by a third would still be 6%, which is going to be well above government scrip and cash. Not as good as picking the bottom though, and eyes closed or not a lower share price is a reduction of wealth whether realised or not and as SpectoAcc is keen to point out any reduction in distribution would hit the share price.

[spectoacc] 24/8/2018 15:47

Note Hansteen have been a big net seller lately too; I don't think we're at the top of the market just yet, but we're certainly a long way from the bottom.