Newriver Reit Share Discussion Threads

[lord gnome] 13/6/2019 08:42

An apocalyptic view fenners66, even if I broadly agree with your analysis. Add Brexit to the mix (or, 'despite Brexit') and we can all run round screaming 'the sky is falling in'. Things are rarely as bad as they seem and fwiw, I think NRR will be one of the survivors. Operating at the cheap end of the market will see them through and they seem to be very good at what they do.

My only question is, 'how low can it go?'

[zccax77] 13/6/2019 08:40

@Fenners agree with you, follow the wave of money retraction from London.

[spectoacc] 13/6/2019 08:39

Disorderly Brexit probably more of a worry for economic growth, but in spite of 100,000 jobs lost in retail, employment is at record highs - all-time record highs.

And everybody acknowledges there's a shortage of housing (there isn't necessarily, but all govnt policy is directed as if there is). Build costs are, of course, on the rise..

The legacy holders of retail are in trouble IMO - the tired old estates, the "what used to work" stuff, at sometimes crazy valuations. I'd rather be in the NRR's who've bought from distressed sellers, than the INTU's & HMSO's who'll be the distressed sellers.

But it's a fair point - retail isn't a thriving market, and nor is pubs (a large part of NRR's business now). Retail may be entirely dead, pubs too, in which case NRR is a short and not a buy. My money is where my mouth is.

[zccax77] 13/6/2019 08:38

Dept stores have low rent in places like INTU, they pay £12 psf compared to £48 psf for normal retailers. However, I think DEBS needs to be removed from the market since its offerings are poor value. More selfridges and Harvey Nick's needed, though they are not expanding. The main value add from the dept store model is the cosmetics counters which are usually ram packed and the designer mens/womens clothing the remainder is dross. Secondary sites like CAL with DEBS Dept stores are dead men walking.

[fenners66] 13/6/2019 08:35

At the end of the day the share price is not just about reality but also sentiment and the perception is things get worse .

That may mean of course that at a lower price if you are right these will be a bargain..... but

[fenners66] 13/6/2019 08:33

Yes you can keep knocking down pubs and building flats and houses.
But what if we lose another 100,000 retail jobs or more how is the excess supply of housing going to be bought ?

[fenners66] 13/6/2019 08:31

As I said we discussed the pro's and con's at length about a year to 18 months ago.

And you could try and pin all the share price decline since down to Woodford but I think that would be woodford tinted glasses.

As for the value end of the market.... a Pound store chain has already gone bust.

In the town near me more than half of the high street is empty already.

There are at least a 1000 betting shops to close in the next couple of years.

Rents will fall as a knock on effect - if you don't believe that look at London retail property prices over the last 50 years - when they go up the country follows and vice versa.

Why should house prices go up in Barnsley just because they already did in Islington ? Well they do and if the next property crash starts in the capital the rest of the country will follow.

Retail property is not immune to the same ripple effect.

[anthonyspencer1] 13/6/2019 08:22

Converting retail spaces to retirement villages and low cost houses. Building flats above shops n in the car parks. Over 2 billion invested in this already. Interesting Holding for a few years

[spectoacc] 13/6/2019 07:56

@RCT - if they own dept stores, yes. BLND's last results saw a c.30% drop in Dept Store NAVs, which was pretty stunning for a single period and more no doubt to come. Dept Stores essentially a bust business model IMO.

MKS feels like a bit of an elephant in the room.

NRR not immune, as the last results showed, but they were "value" even before the Woodford-inspired fall.

[rcturner2] 13/6/2019 07:50

I agree with fenners to an extent, as the true impact is not yet clear across the retail sector. The Arcadia CVA included some rents falling by more than 50%, which presumably implies that the valuation will also fall by the same amount. This means that even REITs with sensible LTVs of say 30-40% will suddenly find themselves with LTVs of 60-80%. Valuations are going to come under pressure across the whole sector and the effect of that is as yet unknown.

[spectoacc] 13/6/2019 07:01

Disagree @fenners66 - look at NRR's average rent compared to say INTU, who are exposed to Arcadia, or CAL (going to zero IMO), who have large department store exposure. The whole point is that NRR are at the value end, the pound shops, the B&M's, not the dept stores (in general - you could argue "all retail is dead").

When NRR share price tanks, as it has and will probably continue to thanks to Woodford's holding within IFF (I doubt he's sold a single share yet from WEIF), there'll be more "Look at the state of the High St" posts. Yet NRR isn't falling because something has suddenly changed in the retail market over the past few weeks.

Pubs? Now, they're more interesting. Could argue NRR's large pub exposure works by buying from distressed sellers, working the asset (Co-op conversion etc), then doing it all again. And that Woodford's impending collapse means no money to be raised to keep that ball rolling.

[konkel] 13/6/2019 06:48

Spot on Fenners66

[fenners66] 12/6/2019 22:04

Well I have kept a close eye on these for a few years now.

I have joined the discussion previously (at length ) about the decline in retail and heard the counter about these shops are different.

However even BBC radio managed to explain this morning about the Arcadia CVA that landlords may well be better off allowing Arcadia to fail and have a void period than permanently reducing rents across the board.

There is no doubt -since Green has succeeded, that the landlords feel too weak for the battle and others will follow , either with their own CVA's or just plain hard negotiation, "How can we compete with Arcadia when they have their rents slashed?"

That will ripple out and I firmly anticipate falling rents across the sector - or do some of you believers think that Arcadia's shops were located in poor positions ?
A retail £Billionaire knows how to maximise location so that will not have been the problem.

So it does not matter how good NRR's locations are there will be equally good locations with rent reductions next door (figuratively speaking).

As for the argument that they are not just in retail - there will be a perception that they are among potential investors and that may be just enough for them to ignore the company anyway.

After all there are always sellers of shares and New buyers are required in order to keep the share price up.

Yes the Woodford situation is different and a one off, but he will be selling into a poor market for the reasons above.

I said I should have shorted these from about £3 (or wherever it was it may well have been higher), and the share price has continued to decline since so whatever the reason I feel vindicated.

I just cannot see sentiment changing for the better for some time.

I think property valuations will continue to fall.

[zccax77] 12/6/2019 20:56

The sites are in the middle of nowhere. CAL has better sites from a location perspective, though they need to repurpose them for 'convenience'.

[dragonsteeth] 12/6/2019 18:56

This feels a bit like a Peanuts cartoon I saw years ago where Snoopy was a vulture sitting on his kennel, watching, waiting, watching , waiting , ..... .
It looks like 770k shares sold in the afternoon depressed the share price Its beyond me to figure out just where this will stabilise .
konkel, NRR is much more than retail , which for me is a positive factor in itself and while Woodford is currently dominating the share price action I believe this misperception for some that NRR is pure retail REIT has added to the drop. Meanwhile, I’ll go back to watching, waiting,...

[konkel] 12/6/2019 17:49

While the current weakness may be technical (Woodford a forced seller) it can't hide the fact that retail is dying a painful death and therefore retail landlords are also up against it. Deep rental cuts are coming and that's if you're lucky enough to have a tenant at all. Another massive and obvious trend that NW has failed to spot regretably.

[cc2014] 12/6/2019 17:08

I was afraid of this. Woodford out selling today after not selling much Monday and Tuesday. You can see it across the rest of his stocks.

Looking at the trades though I can't see that he sold more than 500k today.

Not a good day generally for this sector.

[eeza] 12/6/2019 16:50

It has yet to go XD.

[cwa1] 12/6/2019 16:31

OK guys, somebody ring a bell when we hit bottom please...

[spectoacc] 12/6/2019 15:50

Millions and millions.

[cc2014] 12/6/2019 12:55

WIF has assets of around £500m and is still open, WEIF has assets of around £3.5b is suspended and WPCT is of little relevant to NRR as it's a completely different animal and you can sell your shares instantly on the market.

WIF's largest holding as at the last factsheet was NRR, which was 7% of the fund. I suggest the redemptions in WIF can't be that large as a)the fund has stayed open and b)we aren't seeing forced selling on NRR

In WEIF, NRR is the 20th biggest holding at 1.9% of the fund, the sort of level he could hold on to and a stock which fulfills his new mandate if he could sell the smaller less liquid and unquoted stuff. Of course he can't sell much of that at any speed so some NRR will have to go.

Millions of NRR for Woodford to shift yet...

[chucko1] 12/6/2019 12:37

Well, he HAD to say that. He has to speak of his intentions and to remain consistent across all media platforms. In the meantime, he can work out what to say when it turns out to be impossible.

[eeza] 12/6/2019 12:10

Well his 'strategy', reiterated again today, is to sell of the illiquid holdings and increase the liquid holdings.
But that flies in the face of reality, which is that he is selling his most liquid holdings to cover the redemptions in the other 2 funds.

[cc2014] 12/6/2019 10:49

Yeah -pretty clear from this morning trades that the seller wants 195. As far as I can see from the Woodford RNS's the last couple of days which have reduced to very few he's not in a hurry now to sell anything including NRR.

[chucko1] 11/6/2019 16:54

CC2014, I suspect a lot will trade around this price. Both buyer and seller appear content here, but let’s see what kind of volumes are reported.