Newriver Reit Share Discussion Threads

[flyfisher] 26/11/2019 22:44

If held in an ISA, what amount should have been received from the recent dividend.

[cordwainer] 26/11/2019 11:42

Extract from UBS real estate outlook November 2019:

"The retail sector continues to struggle for reasons that are well documented. The UK is the most affected as capital values have fallen significantly for retail warehouse, shopping center and high street assets. While secondary/tertiary assets have been hit much harder, there is also evidence of stress in the
prime segment of the market. Of the 46 prime locations monitored by CBRE, just 4 saw rents increase while 19 saw them decline. The impact varies by country and is closely linked to the level of ecommerce penetration in that location; Italian prime rents for instance have been quite resilient, with values rising by 5% in Milan. Such examples are, however, few and far between, with even successful retailers far more selective about where to open stores as they look to build a more 'asset-light' omnichannel presence.

Supply data is scarcer for the retail sector, but in the UK the high street vacancy rate is now thought to stand at around 13.8% of units, and retail parks have around 12.6% of units vacant. This does, however, mask a high degree of variation. Weak secondary shopping centers now have one in five units empty, while prime retail parks are around 9%. We consider the retail warehouse sector to be more resilient going forward, due its high income returns, good accessibility and larger format units. In light of this, it is hardly surprising we are seeing such high rental decline which we are expecting to continue at least until 2020. We do, however, believe there will be selective buying opportunities once this process is complete."

[ramellous] 25/11/2019 13:10

From a poster on lse..

For anyone interested, Sprucefield Retail Park has more than half of its area vacant and undeveloped. This was earmarked for a massive John Lewis outlet, but planning was constantly refused and John Lewis pulled after after more than a decade. The land will make an excellent residential development. It sits on the main Belfsat/Dublin road, with a thirty minute commute to central Belfast.

[eeza] 25/11/2019 13:06

Barnett likes NRR, but is under pressure to reduce the %age he holds, so maybe needs to reduce by another 10%.
But Barnett is not a distressed seller like Woodford so can trickle his holding down, and so far the market is buying from him.

[hugepants] 25/11/2019 12:59

"Sprucefield Retail Park is one of Northern Ireland's leading out-of-town retail destinations..."

It has 5 retail units according to the RNS.

1 unit is vacant but its not clear if that's part of the 5 or if there are actually 6 in total.

[hpcg] 25/11/2019 11:59

It depends how far Barnett is to sell down, or be forced to sell down. Woodford had Barnett to sell to, at least for a while. No white knight for Barnett that we yet know of.

[kenmitch] 25/11/2019 11:40

Agree hpcg (post2024) re perhaps worth waiting re further Invesco selling.
Also January could be a retail bloodbath (and perhaps the peak of it?) so good chance
of a better buying opportunity then.

Can’t really guess (can anyone here?) the NAV effect,in worst case scenario of nearly all the distressed retailers in their portfolio going under in January, along with rent reductions in time, for others. Perhaps further 20% NAV fall to around £2?

Bearing in mind the news today, along with the many other portfolio plus points it’s tempting to buy a part stake around 170p and hope to buy the rest lower. 150p with dividend cut of 25% to 15p would still give big 10% dividend. Bearing in mind that yield would be after a cut and IF they are right about improving dividend cover further, and don’t cut it, 150p would give 14% yield. I know the price went even lower than that when Woodford was selling out, but hard to see it going that low again.

[a0002577] 25/11/2019 10:32

For those of you who like the Lemon Fool you might like to read this which I posted in June.

The key part of the post is this from the new chairman:

"Agreeing to chair NewRiver was not a difficult decision to take. I was well acquainted with the Company's affairs as a long-standing shareholder and had closely watched the highly talented management team build an impressive portfolio in the years following the global financial crisis. The skill and judgement that the management team has exercised in building up the Company is exactly why the Board has tremendous confidence that the same team will address the current challenges in the retail sector, regarding them as opportunities rather than as threats.

Our confidence stems from our core strength in four areas. First, management's ability to select the right assets. In any market dislocation there are winners and losers, and we are determined to emerge from the present dislocation in retail as clear winners. The skill with which NewRiver has built up a convenience-led, highly resilient portfolio is unique in the UK real estate industry. Our relative immunity from the various retailer restructuring programmes that have caused other landlords real concern continues to vindicate management's skill in selecting the right locations and in partnering with the right retailers. Consumers are still shopping in physical stores, but they must be the right kind of offer and they must be conveniently located. The Board is very confident that our portfolio delivers just that.

Secondly, we have confidence in our ability to take decisive action. Our management team was early to see the strategic implications of the changing shape of retailing in the UK and took action to diversify our retail assets with complementary assets in the shape of our community pub portfolio. This has added high quality and diversified income to our Funds From Operations and made a positive contribution to our asset values. At the same time, the pub portfolio has continued to build our presence in the communities we exist to serve.

Thirdly, our balance sheet is very strong following last year's successful debt refinancing, all of which is now entirely unsecured. Consequently, we have positioned ourselves well to take advantage of the attractive opportunities that we believe will present themselves in the coming period.

Finally, we have tremendous confidence in our asset management capability. It is our view that the winners in the current market conditions will be those companies which not only make the right strategic calls, but essentially, can deliver on the execution of those calls. In 40 years in the property industry, I have never seen more accomplished asset managers than the team at NewRiver, and we are determined to nurture and develop this talent further. The skill, energy and attention to detail that is evident in the management of our assets means that our investments are carefully stewarded and constantly improving. Critically, through our best in class platform, we can add value not only to assets under our own management, but to those held in joint ventures and by third parties."

I went on to say

"They are either delusional (which would not make sense) or there is a very good company in there paying good dividends - the share price is largely irrelevant - and is a buying opportunity in my view"

I haven't changed my view since and the latest purchase reinforces it,

[wskill] 25/11/2019 09:43

Especially when they paid £70 million and sold for £40 million, they're selling everything they can at the moment.

[cc2014] 25/11/2019 09:26

Interestingly INTU RNS says they have sold it at a price in-line with NAV.

[93marquez] 25/11/2019 08:30

An excellent acquisition

[wskill] 25/11/2019 08:09

A good buy again by NRR we have an excellent management team who know the assets they buy and how to extract value from them.I wonder what the building cost of an asset this size would be more than £40m for sure.

[diggybee] 25/11/2019 08:00

Better to buy at 40m than 70m anyway

[boonboon] 25/11/2019 07:47

Looks like there's good development potential, but heavy local resistance.https://en.m.wikipedia.org/wiki/Sprucefield

[boonboon] 25/11/2019 07:46

Bought by Intu in 2014 for £70 million

[hpcg] 25/11/2019 02:46

Thanks for the clarification Tilton. Whilst I'm short for tactical reasons I do rather assume I'll be a buyer at a decent price. For that to be the case the company needs to be super hard headed about what is going on. I'd go so far as to say stop recycling just build up cash. I think retail rents are probably going to come down to the level of commercial and residential - one of the relative attractions of NRR is there isn't far to go. I'm sure there is money to be made by skilled operators trading down but the residual estate is depreciating in the mean time.

[spectoacc] 24/11/2019 16:05

It can't, but have to say I'm amazed someone took a punt on CAL this early.

[tiltonboy] 24/11/2019 15:50

They were not quite as hopelessly optimistic as CAL, but they do appear to have misjudged the continued descent.

There are those that believe there is value in some plays as is evident with the increased corporate activity, which cant be dismissed.

[tiltonboy] 24/11/2019 15:42

hpcg,

Edited my post. Didnt quite come out how I meant it..

[hpcg] 24/11/2019 14:29

tiltonnoy - I had assumed that Woodford in particular would have pressured the company to maintain the dividend against all common sense. You are suggesting it is management that wants to keep the dividend up? That's a bit scary. At least you have confirmed through first hand that management are over-optimistic, which is the default for any company management. We should thus de-rose tint management statements and actions.

[tiltonboy] 24/11/2019 09:02

With Woody gone, and Burnett on his way out, I believe there is less pressure not to cut the dividend.

Having met them earlier in the year, I was led to believe the dividend would be virtually covered this year, but obviously there has been further deterioration, and that wont happen.

Having taken a nice profit recently( but missed the peak), i will look at to get back in at some stage....but not yet.