Newriver Reit Share Discussion Threads

[eeza] 24/9/2019 09:42

And NRR has a nice pub business.

[chucko1] 24/9/2019 09:12

RC, nothing new in this phenomenon at all. Idiotic landlords since time began, but they get found out in each cycle. You would have thought they would have learned, but there is a wide range of ability in this area. Makes it difficult to extrapolate bigger trends from local information.

[spectoacc] 24/9/2019 09:12

Apparently not as many betting shops as headlined are going to close - seems a lot of the FOBT money is now going over the counter.

Probably by-the-by in the scheme of things.

[fenners66] 24/9/2019 09:09

Debs also got the green light to close 50 dept stores - arguably destination shops -and so there should be further knock on.

[rcturner2] 24/9/2019 09:08

Indeed. A friend of mine ran a second hand book shop and at the rent review basically had to quit as could not afford the hike. The shop was replaced with a trendy baby clothes shop at the higher rent, which of course went bust within 2 years. The shop is now of course empty.

[fenners66] 24/9/2019 09:07

marksp2011 - in answer :

>wskill
"the build cost of the retail units must come into it as well and presently the value of them is less than the cost to build in many instances."

He tried to make the point that if it costs more to build a shop than they are currently selling for - then surely that would create a demand for those empty units.

My point is supply and demand is key. If there is no demand for shops the fact that you can buy the buildings for less than the cost of building them is meaningless. The Chinese example is to illustrate that its not just individual shops but that it is possible to create whole cities that no one wants - so quite clearly with no demand to run shops in vast numbers, price will not create demand or at least not at an economic level for the current owners.

Not forgetting that an empty shop still attracts Business Rates ,maintenance costs and interest on the borrowings.

So another 1500 or more betting shops and TC to close this year.

[marksp2011] 24/9/2019 09:02

RCT

It is hard to tell. My local High St has two primary landlords. One side of the street has decent shops and is 100% full. The other side has voids. The primary difference seems to be rents and lease terms according to one of the shop keepers I drink with occasionally.

The ganme seems to be that they set the rent based on what other rents they have achieved. If they manage to let to a muppet or a charity shop at an inflated rent, ALL the other rents will reset on renewal to that higher rent and the development empties out. It is a barking system. A charity shop run by a woman (ie not part of a chain), paid 50% more than the baseline on a two year lease. The impact of that was that other shops in the same area were baselined against what she paid and the parade emptied. After a year, they cut the rent demands and it has filled up with hairderssers and nail shops.... the useful shops have gone and, there is little reason to go there unless you want a haircut of your nails painted

it is all very predictable and short termist. I would call it bad property management.

[spectoacc] 24/9/2019 08:55

And it snowballs - the fewer the shops, the less reason to go there. And it snowballs for the owners - the more empty shops, the lower the re-lets, the higher the empty rates bills, the less money to spend on refurbs/maintenance. Gets to the point where you can pick empty shops up for the same in capital value as they used to get in annual rent.

NRR well aware of all this of course.

[rcturner2] 24/9/2019 08:50

The main problem is that there are far more shopping centres in the UK than are actually needed. Possibly as many as 25% of shopping centres will close. There was a massive retail over expansion and there simply isn't the demand for the shops from the general public.

I was in Buckingham yesterday, which is a pretty well off middle class town in the SE and the number of empty shops was striking.

[marksp2011] 24/9/2019 08:42

Footfall is dropping as there is less need to go out to buy anything. Going shopping neds to be more of an event and I think NRR are trying to mix it up to make it more of a pleasurable experience

fenners - what exactly does Chinese Government, keynesian infra projects have to do with NRR? Things may not be bright butI don't think we can read across from there

For every TCG shop that closes we will gain a nail bar or a Vapestop :)

I am deeply unconvenced that betting shops have a positive effect on footfall. They have resulted in a proliferation of security cameras in my area where fools and drunks sit outside drinking cans of beer until the next race runs.

[hugepants] 24/9/2019 08:26

Seems like most of the shopping centres have a Betfred or a William Hill. Ouch! Plenty of Argos, NewLooks and River Islands in there as well. The management are too busy congratulating themselves at avoiding exposure to the likes of Debenhams etc but gloss over some obvious potential dangers in their tenant base. Beginning to understand better why the footfall keeps declining.

[fenners66] 23/9/2019 21:29

I think the Chinese still have whole cities where the buildings are worth less than the build cost - without any demand they stay deserted.
Low price does not necessarily equate to value

[wskill] 23/9/2019 13:55

Yes agree with the supply and demand control on rents also the build cost of the retail units must come into it as well and presently the value of them is less than the cost to build in many instances.

[cc2014] 23/9/2019 13:29

Invesco bought 2.5% at sub 166p so unsurprising they are selling a few.



They are now back to 16.9% so assume they will sell down to around 16.0% and then stop.

I think their next lowest buying price is around 220p. I shall have to check and happy if someone knows a more precise figure to share.

[hugepants] 23/9/2019 11:07

Thanks zho. I think there are others - just checked a couple at random and Locksheath, Fareham has one.

Edit. Also 3 Horseshoe walk, Warminster.

The revenue drop to NRR is probably very low but its the potential snowball effect

[fenners66] 23/9/2019 09:23

Its not just the direct exposure - but more supply of arguably "prime" location small shops....
I have made the point for long enough about more supply than demand , it has to bring down all values eventually.

[zho] 23/9/2019 09:08

HugePants - I found 4 TCG outlets in TRR centres - Bexleyheath, Oxford, Newton Mearns, Newtonabbey - but there may be more.

[hugepants] 23/9/2019 09:01

What's their exposure? The NRR shopping centre near me has a Thomas Cook store.

[marksp2011] 23/9/2019 08:43

TCG didn't have enough cash
An independent review said they would run out again in Feb. Why give them money now and then need to bail them out again in 6 months?

The model doesn't work any more they have been overtaken by online.

[wskill] 23/9/2019 07:47

Unless a vulture fund is waiting in the wings,which is probably why the banks were pushing Thomas Cook over the edge for an extra £200m .

[fenners66] 23/9/2019 01:04

Likely 560 Thomas Cook shops to be added to the list of empty retail units

[eeza] 20/9/2019 08:50

Barnett = Woody2.

[spectoacc] 20/9/2019 08:12

I chose AV. over LGEN :) Getting a bit OT tho!

Not sure about the "..Is said to be selling.." comment above re NRR - Woody sold the lot some time ago, as we all know. He should instead refer to Invesco/Mark Barnett, who did slot a % recently, and would have a heavy effect on the price if he's going to slot more going forward.

But as @Chucko1 would point out, that's largely irrelevant to us LTBH'ers of NRR.

[rcturner2] 20/9/2019 08:07

Alongside LGEN, Aviva seems incredibly cheap to me.

[spectoacc] 20/9/2019 06:58

LGEN & BOOT the other two, for anyone interested! Personally I think the banks are starting to look interesting too - in BARC, but LLOY would interest me if Brexit resolved OK.

@warranty - you'll note Next is doing rather well from its online offering!