Newriver Reit Share Discussion Threads

[fenners66] 25/7/2019 10:43

Whilst I agree that the update is trying to be generally positive and the figures that they do quote is just that - they are also playing games , games that the market all too often swallow, hook line and sinker.

So; "We have progressed our strategies to deliver Underlying Funds From Operations growth"

Underlying - once again another company couches the FFO as underlying and by definition non-underlying

What is the non-underlying ?
Though I accept that it could also be an exceptional gain - I do not recall mention of such - so is it instead added costs that they just want to ignore ?

[spectoacc] 25/7/2019 10:41

@marksp2011 - it couldn't be clearer, NRR sold c.£27m of assets, and "..Recycled the proceeds.." into the JV. ie, NRR are investing in more shopping centres. Yes, only having 50% is a plus - the risk is spread.

Or you could go back to the June RNS:

"NewRiver announced on 23 May 2019 that it had exchanged contracts on the acquisition of a portfolio of four retail parks for total consideration of GBP60.5 million, reflecting a net initial yield of 9.8%, from Zurich Assurance Ltd. This acquisition has now been completed by the JV, and NewRiver's share of the transaction was satisfied from existing resources and available credit facilities. Initially, NewRiver will hold a 50% interest in the gross assets of the JV (NRR share: GBP30.2 million) and NewRiver will benefit from 50% of its net rental income (NRR share: GBP3.1 million per annum)."

[marksp2011] 25/7/2019 10:37

@Specto

Sorry, I don't see the point. The way I read the BRAVO statements was that PIMCO provide 50% of the funding and get 50% of the return net of costs. Management is by NRR

What do you think the issue is?

[hpcg] 25/7/2019 10:33

I still read that as aspirational ramellous but possibly. Both occupancy and average rent up so not out of the question. It is an expensive share to hold a short position in and if they really will be paying out 100% or less that is one string of the short thesis cut. There is a fair degree of safety built into the price so I think shorts need to reduce before they are on the hook for the next dividend. Unless they anticipate economic turmoil later this year, which is not out of the question.

[chucko1] 25/7/2019 10:19

Covering the dividend was the stated target, mainly within this FY and finally by next FY. They are fighting headwinds to achieve it, but seem on target to do so with the assistance of some recycling gains (turned into increased rental income) on top of other items more explicitly stated in their annual statement.

[ramellous] 25/7/2019 10:07

“We have progressed our strategies to deliver Underlying Funds From Operations growth and to re-establish a fully covered dividend “

So the lovely dividend is covered now?

[hpcg] 25/7/2019 07:51

SpectoAcc - my thoughts exactly, though a bit more positive on the recycling as that is a little bit like backwardation in a declining commodity.

[spectoacc] 25/7/2019 07:45

@marksp2011:
"-- Disposed of GBP27.5 million of assets at a blended net initial yield ('NIY') of 6.7% and 1.6% below book value, comprising an Asda foodstore and petrol filling station at St Elli Shopping Centre, Llanelli for GBP17.9 million, one shopping centre, six c-stores and three pubs; exchanged or under offer on a further GBP10.7 million of assets; altogether representing a blended NIY of 6.0%; on track to recycle 5% of our portfolio in FY20

-- Deployed proceeds into acquisition in BRAVO JV of four retail parks: Kittybrewster Retail Park in Aberdeen, units at Kingsway East Retail Park in Dundee, Telford Retail Park in Inverness, and Wakes Retail Park on the Isle of Wight, for GBP60.5 million (NRR share: GBP30.3 million), reflecting a NIY of 9.8%"

[marksp2011] 25/7/2019 07:40

Specto

They aren't "comanaged". They are being paid to manage them on behalf of others using their software platform - it is a nice steady revenue stream that reduces NRR costs through leverage benefits

[spectoacc] 25/7/2019 07:21

Reads well, doing well, but - the move into co-managed shopping centres makes me a little nervous, as does the "recycling" being done at just below Book. Masses in the price of course.

[hpcg] 24/7/2019 08:10

B&M opening more stores:

[marksp2011] 22/7/2019 12:42

Comparing US to Uk is ridiculous
The country is full of little strip malls because it is a long drive to get anywhere. You need to recognise the size of the place

[zccax77] 22/7/2019 11:30

4.7 times more retail space per capita.

[propinv] 22/7/2019 11:25

Capital & Regional having a shocker with one of their malls on fire at moment

[hindsight] 22/7/2019 11:20

The us is 500% over retailed compared to the uk.

When you say 500%, is that 5x sqft per head of population ?

[zccax77] 22/7/2019 10:33

The us is 500% over retailed compared to the uk.

[propinv] 22/7/2019 10:00

On this US retail point. There is nowhere as much over supply in UK as some places in US.

[hpcg] 22/7/2019 09:47

UK is ahead of the US in online take up. I have to say though the US is as different retail wise from the UK as the UK is from Europe and so one has to be cautious about any analogue. Even the largest metros in the US differ quite substantially from each other in their retail landscape.

[zccax77] 21/7/2019 18:41

Yet analysts said the aggregate totals masked turmoil at the bottom end of the US shopping centre market. While occupancy rates average about 97 per cent for highest performing “A++” grade malls, they stand at only about 67 per cent for the worst quality “D” grade centres, according to estimates from Green Street Advisors.

The UK is 2 years behind the US.

[stemis] 20/7/2019 23:48

However yield is 12.7% and even if they reduced it to a level with 120% coverage, the yield would be over 9%

[propinv] 20/7/2019 15:48

Hi DTaliadoros. Yes. Dividend not fully covered by earnings. I know, I know ....

[porsche1945] 20/7/2019 11:31

What a dire investment these have been, usual uk basket case company with declining business model and unsustainable dividend, capital destruction for income only, pointless. I should have known to steer clear of abso anything that utter imbecile Woodford was involved with.

[dtaliadoros] 20/7/2019 10:43

Just had a quick look at results for this REIT and there is quite a lot to digest. Clearly the story is that there is a forced seller with further positions to unwind buy his former employer seems happy to pick them up. Am I right I reading that dividend is not fully covered at 88%?

[propinv] 19/7/2019 15:43

Thanks SteMiS. Most of this is sensible and agree. Where we differ is I can buy, and do, ungeared assets which generate a net yield of 10% (after management). Yes, they are management intensive but that's what they should be able to hit, ok maybe 9%, not 10% net, but that still puts share price lower using that metric.