Newriver Reit Share Discussion Threads

[2wild] 13/7/2018 03:39

Powndworld was always just a poor imitation of Powndland. Weak companies failing and making way for more popular, better run and expanding businesses is actually good for the sector.

[killing_time] 12/7/2018 18:36

Thanks speedsgh.

[fenners66] 12/7/2018 12:32

"hedged against online retailers because its tenants typically sell low value, high volume goods."

Whilst I agree that has defensive qualities

Poundworld also sold low value high volume goods.

[speedsgh] 12/7/2018 10:24

NRR features in today's Tempus column in the Times...



Newriver Reit went shopping yesterday and picked up the Hollywood retail & leisure park in Barrow-in-Furness for £15.3 million. It was a modest deal, little more than 1 per cent of its entire portfolio, but typical of Newriver, which specialises in no-frills community-focused shopping centres for locals seeking value (Patrick Hosking writes).

The Barrow retail park has no grand department store as its incoming anchor tenant but Aldi, the discount supermarket group. There are no fancy fashion shops but plenty of strong retailers catering for price-conscious customers, such as TK Maxx, Currys and Dunelm.

The average rent in the park is just £11.36 per square foot, which is affordable for most. Yet the purchase gives Newriver an attractive net initial yield of 8.7 per cent and the economic prospects for Barrow have just picked up a little after the government’s recommitment to the BAE Systems shipyard.

Newriver has grown from a £25 million tiddler in 2009 to a £1.4 billion midweight and member of the FTSE 250 through a string of capital-raisings and acquisitions. It owns 34 shopping centres and argues it is hedged against online retailers because its tenants typically sell low value, high volume goods.

Retail property Reits have been clobbered in the past few months. The drip of bad news has soured sentiment and Newriver has not escaped the general selldown. Its shares used to trade at a premium to net assets and only last year it raised £225 million in new equity at a 15 per cent premium. Closing yesterday at 268.5p, they now languish at an 8 per cent discount.

Yet Newriver has some defensive qualities denied to its peers, including its predilection for value retailers. The balance sheet is relatively conservative after it raised £300 million in ten-year debt with an interest rate of 3.5 per cent last year. Gearing at the year end was 28 per cent.

There are risks. The management have embarked on a blizzard of deals that make you wonder how much attention they can give to all the details. A strategy of diversifying into pubs is not an assured success. But the shares are now looking unloved and cheap.

ADVICE: Buy
WHY: It has been excessively hit by sector-wide sell-off

[fenners66] 11/7/2018 14:34

Whilst the right locations will survive, the question is will sufficient weakness reduce the value of the whole market ?
When there is oversupply of anything the accepted wisdom is the value / price falls.

[minerve] 11/7/2018 13:00

This game is all about location and product sale. Retail is weakening, it isn't dying altogether! The fittest will survive and in retail that is the best locations and product offerings. The question is are NRR delivering here. I just conducted a quick review and I believe they are. Today's announcement WRT Barrow-in-Furness is an example of this, very astute business if you ask me! Forgive the pun.

[fenners66] 10/7/2018 13:41

From the BBC

Poundworld, the struggling discount retailer, will close 25 stores, resulting in 242 job losses, administrators said.

The stores named for closure will operate until 15 July, according to a memo sent to Poundworld staff.

"The administrators have been preparing contingency plans in the event that we are not able to deliver a sale of the business as a whole," the memo said.

The retailer has 355 stores and employs 5,100 people across the UK.

25 more locations going on to the market...

[chucko1] 10/7/2018 09:51

10% might well do it - unless it does not ever get there! 8% + redevelopment profits is good enough compensation for me for the journey this share price might go on in the short term.

I suspect with the recent purchases at yields of 12% or more that the reevelopment profits will see additional dividends giving rise to an overall dividend yield approaching 10% anyway. My bet is that this management are able to deliver this.

[chucko1] 09/7/2018 20:29

A loss of about 2% rent roll per annum if the trend continues. It simply is not bad enough to justify the large discount.

[speedsgh] 09/7/2018 13:05

Page 36 of the latest Annual Report is a worthwhile read. Gives details of NRR's exposure to CVAs up until May 2018...

Annual Report 2018 -

[asmodeus] 09/7/2018 12:21

Or - putting it another way - it is correctly valued in view of those doubts?

[chucko1] 07/7/2018 00:03

At 8% yield (and more) together with the track record they have, this is undervalued by about 35% or so. Or it would be were there not fears about loss of rental or lower rents. I certainly do not see the risk indicating a discount anywhere near as great as that.

It might get cheaper if the sectoral fears increase further, but for those happy to hold over the medium term, I see the current share price as a terrific entry point.

[asmodeus] 06/7/2018 16:02

Done P.S. .Personally, I can't see how they can avoid future problems with tenants failing to afford rents, or people not buying shop premises for the same reason. So look forward to seeing how they think this will be no problem.

[nisbet] 06/7/2018 14:50

It seems that there are some on this bb have not noted the purchase by the deputy chair of 16,000 shares at 275p. Interpret this as you feel appropriate.

[asmodeus] 06/7/2018 10:54

I suggest the first thing would be to assess whether the statement will be good news or bad. If good buy now and sell then If not good then assess whether the next one is likely to be good - if so, buy then. If not, look elsewhere. Personally, I can't see how they can avoid future problems with tenants failing to afford rents, or people not buying shop premises for the same reason. So look forward to seeing how they think this will be no problem.

[tim1478] 06/7/2018 09:27

Is this a bargain, a good firm going through a challenging time, or a trap, a good firm facing an impossible situation? I was about to top up - I buy and sell once a month unless an alarm is hit - and then saw there is a trading statement due about July 18th and thought maybe the decision should be made in August.

[fenners66] 05/7/2018 17:34

Thanks Minerve

I read a section in the i paper today. 50,000 jobs lost in retail this year.
With a forecast that there will be more to come in following years and scaremongering (if you like) that there will be no low skilled retail and cafe style jobs for our workforce to get on the ladder with in a few years time.

They suggested that retail be turned into office space - looking from the angle of jobs - but saying they would be the wrong jobs .

What they did not add up was that would give a surplus of office property on the market....

[minerve] 05/7/2018 13:29

fenners

Even though we have disagreed before your posting is healthy and is adding balance to the thread.

One of our local towns in Cheshire (Northwich) built a new cinema complex complete with very nice parking in town and also built some new shopping outlets - there has only been ONE shopping outlet space taken so far in almost a year! Not good. In fact sad.

New River is basing its business plan around pubs and such which IMO are used by the same demographic who might very well use Just Eat and Amazon.

I am considering selling my holding. Just considering ATM.

I'm not blind to see there is significant strain in the sector and the business plan of NRR will be tested IMO.

[fenners66] 05/7/2018 13:21

From the BBC news page 2nd July

"The founder of Poundworld has said that the discount retailer's administrator is putting a rescue plan at risk by dragging its feet over striking a deal."


So if you are going to try and correct someone - get your facts straight ; or risk making yourself look really stupid.

[david77] 01/7/2018 11:12

"Poundworld into administration next ?" - Poundland is on its way out - that must help Poundworld

[fenners66] 24/6/2018 01:04

Hoouse of Fraser agrees CVA which will see 31 of the 59 stores close and rents reduced on 10 of those remaining open.

This was despite opposition from high street landlords, unhappy at having to shoulder the burden of financial losses.

Again you may say they are not clients - I don't know if they are or not - but there is only so much bad news a sector can take before the whole group falls on the sentiment.

I see this is back to previous lows despite the recent up-tick.

Poundworld into administration next ?

[gswredland] 21/6/2018 16:35

IF the dividend can be maintained that's great.