Newriver Reit Share Discussion Threads

[hpcg] 07/11/2018 11:15

Hitting new lows. At some point this is a screaming buy as it will no doubt overshoot long term fair value on a discounted free cash flow basis, but goodness knows when that will be. Well, there some guidelines on the historical chart but that's about it.

[spectoacc] 07/11/2018 09:01

Had a d/g PT 2.60 today, can be routinely ignored.

[jon123] 06/11/2018 15:34

looked at there web site yes its very informative only one site that is in my city and thats been empty for about 3 years now it was a massive B&Q and it has a for sale sign on it.I can't see the council agreeing to a change of use but you never know its in a prime location just can't see it being redeveloped into anything other than commercial use.

[fenners66] 06/11/2018 14:00

From the BBC....

New Look may close about 100 UK stores in a radical revamp intended to cut costs and improve profitability.

In March creditors approved the fashion retailer's plan to shut 60 stores and cut 1,000 jobs.

On Tuesday the chain said 85 stores had closed or were closing, while talks with landlords on a further 13 were continuing.

A further 26 stores are trading rent-free, with landlords or New Look able to end the arrangement at any time.



Once again I get that these are not likely to be NRR stores - but it all adds to the retail environment - 26 stores RENT FREE.

So if Joe Bloggs says he is going to move down the road to rent free premises what does NRR do ?

[salchow] 05/11/2018 18:30

hpcg - without really knowing I suspect Wakefield could be a problem and this could be the sort of location you want to avoid. Looking at Burgess Hill that seems as if it will be a "destination" with its cinemas and restaurants and assuming Burgess Hill is relatively well to do (compared with Wakefield) I would expect it to do well.

I expect that when the next results come out occupancy will remain good, the dividend will be maintained and after an initial rise the price will drop!

[hpcg] 05/11/2018 17:26

salchow - I agree somewhat, but a falling tide will drop all boats, even if proportionately some fall less than others. Cafe Rouge is not the problem on its own, the problem is that every single retailer has changed there model to optimising rent. Lease length is coming down, because that is what you do when a long term surplus is laid out for all to see.

Note that NRR has a substantial in-town shopping centre portfolio where prices will knock on directly. I would urge anyone that hasn't to look through every property on excellent NRR website and observe just how much is at risk of being a permanent void or having to compete with other empty units. The Marlets in Burgess Hill could be a case study perhaps, or maybe The Ridings in Wakefield.

[gswredland] 05/11/2018 17:23

Thank you hpcg
Not dipped my toe in yet either!

[salchow] 05/11/2018 12:10

hpcg - Whenever I have seen a Cafe Rouge it has been situated in a town centre on what they no doubt thought to be a prime position almost certainly on a high rent. Not at all like the small local convenience stores in which NRR seem to be interested which are on very much more affordable rents. I don't think the closures in the poorer town centres have much effect on the out of town local convenience stores other than reducing the previous differential between the high street rents and those on what would have been regarded as secondary locations.

[jon123] 05/11/2018 12:02

just goes to show the terminator films could become reality lol

[fenners66] 05/11/2018 10:31

jon123 - I know we could end up sounding like luddites - but yes there is a view that the future is all self driving vehicles and all public transport , on demand cars etc.
The idea would supposedly cut emissions (electric) reduce congestion and need for car parking as everyone sharing vehicles would mean you don't need to look after it all day - just let it go to its next job - and of course get rid of all the driving jobs - you would need robots to do the deliveries....

Then you get AI answering the phone in call centres - I believe this has started - and before you know it we are in the nightmare world where only the best get jobs.....

So much to look forward to....

[jon123] 05/11/2018 10:25

You could say that about delivery men when the new driverless era comes in how many 1000's of jobs are wagon/van drivers they'll be redundant so no shops with staff no jobs delivering the goods from shops with no staff lol everyone will be unemployed

[fenners66] 05/11/2018 10:20

I wonder if investing in retail property is similar to investing in Canals in the 18/19th century. I mean how long did it take to make canals almost obsolete ?

Yes there are still canals and they are still used - but there must have been some who built them for trade who watched their investments gradually die.

We assume we will always use shops - but I guess its only going to be the strong that survive.

Amazon starting a physical shop presence - but without staff (or many staff?).
A new model for the 21st century?
What happens to all the retail jobs and then their ability to buy stuff ?

[jon123] 05/11/2018 10:16

If i was a landlord of an estate in prime area's and companies came to me demanding rent decrease's i think i'd tell them to go n shove it on the basis that i can re rent the premise's for the same rent to someone else ok i may have to suffer a void for a few months but that's the nature of the business on the other hand if it was a stand alone premises in a not so prime location there maybe some wiggle room but if it was an ultimatum i'd still still them to shove it.

[hpcg] 05/11/2018 10:01

gswredland - Their model is (mostly) robust for two reasons. Firstly convenience shopping is immune to the internet. By convenience I don't just mean convenience stores but non-food consumer staples in general, and placed where people need them. Think airport shopping. This is pertinent where there are hotels and offices. Secondly their rent levels are comparatively low. This isn't the entirety of their estate, and I think they have some right lemons, but overall they have shops where there will continue to be shops.

On the flip side we are yet to see the massive shakeout which is just starting. Rents will go down considerably irrespective of stores closing (e.g. , and there will need to be substantial redevelopment of permanently redundant space. So for me I'd like to see a lot more of that process unfold before getting my toe wet again.

[fenners66] 05/11/2018 08:51

Meat retailer Crawshaw has shut 35 stores with the loss of 354 jobs.

Not a big impact again - but it is the drip of bad news for retail property another potential 35 empty properties, its supply and demand and when there is less demand the price / value must fall.....

Maybe the media is obsessed with only reporting the failures rather than new starts - but I can see what is happening in my nearby town and it is getting worse.

[fenners66] 04/11/2018 22:42

Daily Mail

Cafe Rouge calls in restructuring advisers as it prepares to go head-to-head with landlords in a bid to reduce its rent bill

[gswredland] 02/11/2018 17:19

Can I ask why you feel the model is robust hpcg please?

[hpcg] 02/11/2018 13:35

I have to agree that NRRs model is robust, though not without risk, so I have not (yet) bought back in. Will see if the chart can make a higher low. Also one person's distressed asset is another's value investment opportunity so perhaps the better operators can take advantage. The best way for stores to survive is with much lower rents.

One wonders who are the lenders with this exposure? No doubt PE has been paying themselves hefty dividends and have maximum gearing so probably won't lose out.

[jon123] 02/11/2018 09:20

i'm in NRR for the dividend yield not interested in capital growth, having said that i may need the capital one day so i'm hoping it won't have disappeared all together but i'm quietly confident that they will come good in the end its all about cycles,i think were nearly at the bottom of the cycle in this sector which is out of favour

[spectoacc] 02/11/2018 09:16

@jon123 - Rotherham has been been dying for c.100 years :)

Interesting how some councils are buying up shopping centres to "revitalise" them - fair to say that were private enterprise has failed, the public sector will fail x10.

But lots of scope for councils to get involved in city centres - change planning designations, create housing/flats, bring in bars/street scene instead of failing small department stores.

In all of this, I feel like NRR is well on top of things - priced for being in a failing sector, fair enough, but as likely to thrive as dive.

[jon123] 02/11/2018 09:11

i agree with you on town center's i was in rotherham the other day and it was dying all that is left is book makers, fast food outlets and empty shops

[fenners66] 02/11/2018 09:07

my nearest town is dying - so many empty shops - despite the last few years where the general economy has been doing well.

The shops left are islands and they will give up when their leases run out - I suspect.

[spectoacc] 02/11/2018 08:49

@jon123 - Meadowhall parking definitely insufficient, as the queues back on to the M1 attest. Not sure how they've got that past the planners.

Also - re the PE point above - investment is what's needed, eg the article mentions an £86m refurbishment at one centre. And not just to tart them up - investment to change them, bring in different tenants like dentists, NHS, schools (also mentioned in article - above a Lidl no less), convert to flats.

There's options - carrying on as they are isn't one of them.

[jon123] 02/11/2018 08:39

not sure it applies to all shopping centres meadowhall has just announced a big extension but as per usual there building on car parks another retail park near me is doing the same building on car parks when there's not enough parking now let alone at xmas when it gets really busy, another shopping center near me has done the same but i walked around it the other day and had lots of empty shops one reason people don't go there is lack of parking only closure due to the shop ceasing trading was a pound world

[spectoacc] 02/11/2018 07:24

Nothing new, though didn't realise so many were owned by Private Equity. Not surprised PE's "buy/slash/gear/sell" approach isn't working. Shopping centres - and city centres - have been dying for years, and it's only going to accelerate. Even the formerly reliable anchor tenants are going pop (or, like John Lewis, struggling badly).

NRR's "Lidl/Aldi" approach seems to work, & I've more faith in them than in many others.

Did like:

""It's desolate in there. There's a toilet, somewhere to sit and it's out of the rain, that's it.""

:)