Newriver Reit Share Discussion Threads

[essentialinvestor] 07/10/2020 00:08

candid, no one can answer that question for you for a very good reason,
they are not you. The answer depends on individual risk tolerance, timeframe, size of position,
reason and rational for that stock selection etc.


On the Commerial Property board, Skyship has provided a list of REITS selling on large NAV discounts
paying a dividend and with low current LTV's. Perhaps a better question would be, why NRR rather than those on that list. Good fortune with any decision.

[gbjbaanb] 07/10/2020 00:03

"buy when others are fearful"

[candid investor] 06/10/2020 19:01

As things now Buy Sell or Hold and why ?

[theprovosts] 06/10/2020 16:01

Yes no doubt a lot of the institutions are using Covid as an excuse to clear the slate, and start from scratch, even if it means extortionate losses (its not their money after all, but the clients). Its quite hard to hide a stock overhang in any share, hence the bots exaggerating any fall searching for liquidity. So many shares offering solid 7% yields, long term I doubt we'll see such good buying opportunities again in our lifetime.

[chucko1] 06/10/2020 15:49

I had noticed - and made a little profit from it. Instead of holding on for too long here, (I sold too early, as it happens) there are many other shares where funds are throwing in the towel as they believe they can justify their "risk management" to their investors saying "look how un-Covid-exposed we are now", but are worth taking a good look at. Some funds invest on the basis that investors cannot sustain underperformance for more than three years - that is the period after which fund holders themselves can tolerate no more.

In a market like this, if you cannot tolerate problems for three years, you are toast. (assuming you can identify the transient from the fatal).

For the avoidance of confusion, I still hold my original investment here which is 7x what I traded recently on the back of the huge 16mn sale the other day. Yet another freebie.

[theprovosts] 06/10/2020 15:19

Anyone else notice the layering of the book which has been going on for months has now ceased somewhat. Norges, Blackrock and quite possibly one of the other founding shareholders (along with Woodford, Invesco) overhang seems to be clearing. Level 2 isn't so weighted now. Long term investment, but still nice to see the suppression has been lifting. Big buys pushing it up rather than filling the sell order.

[candid investor] 05/10/2020 22:56

Thanks for this Waterfall...at first glance this makes for very sobering reading..I will take a more detailed look to compare with NRR...other contributions welcomed .

[candid investor] 05/10/2020 21:43

Thanks for your comments Dhoult which have been duly noted..

[waterfall city] 05/10/2020 19:13

Worth looking at the CAL recent interims to see what's happened with shopping center valuations and the affect on LTV,and note most of their malls are around London.

[paulof2] 05/10/2020 14:58

All been doom and gloom here for a while but a half decent disposal rns and we see a fund top up and are now up about 8% for the week.

This may well struggle but I’m still not convinced the current share price is justified, the discount just seems too much for me.

[spectoacc] 05/10/2020 10:57

Next - comedy low rents to secure them.

Cineworld - maybe one day!

Hollywood Bowl - ditto, are they open, particularly in restriction areas?

But got to look forwards not back (or, erm, present).

[vow] 05/10/2020 09:51

A week ago in answer to how their Burgess Hill development is progressing.

“ Despite the challenges, amid Covid-19, proposed retailers for the town centre scheme, such as Next, Cineworld and Hollywood Bowl, are ‘very keen’, according to Mr Thomas.”

This week. “ The boss of Cineworld has said its plan to close its cinemas in the UK and the US "is not a decision we made lightly".

[dhoult12] 05/10/2020 08:18

@candid

"Can you explain why you think a substantial fundraise would be necessary given current liquidity ?"

The risk exists because they DONT have a liquidity problem - although i am not certain that current funding arrangements would allow access to CV19 government loans without the lenders permission etc.

They DO (potentially) have a debt problem, which taking on more debt isnt going to solve. As per the report we are looking at a 20% decline in asset values and we were at 47% LTV before. You dont want it heading north of 50% for obvious reasons.

Personally i think they need finger in the air number of £200m from asset sales at last prices to stabilise. I am not certain as discussed above they will get that. You can sell anything at a "price" but they need to sell at March20 valuations or within 20% of - to cash. Harder.

[candid investor] 05/10/2020 00:18

Thanks Essential..I hadn't come across SREI before but a brief look at the figures do look attractive and they are mindful of shareholder returns with the buy backs.
I need to look at them much more closely..can I ask why you pulled out ? Are you invested in NRR and what is your view of their prospects going forward ?

[essentialinvestor] 04/10/2020 22:50

Why go out on the risk scale?, look at a Trust like SREI (conducting a buyback)
with a current LTV below 30%, on a 43% NAV discount and cash resources
circa £80 million. They also locked in a longterm low cost of borrowing at under 2.5%, from memory.

I trade SREI and sold out on Friday, however if you are keen on
the sector and on a business currently buying back shares at a large NAV discount,
it might be worth a look and arguably with less risk.

[onjohn] 04/10/2020 18:29

It’s fuct rack rents are on a downward spiral due to vacancies being let for a shirt button


London is finished


Nrr will go to 15p

[candid investor] 04/10/2020 16:42

Dhoult..thanks for your reply which raises lots of different points which I will try and get through ..First of all I totally agree with you that NRR is a high risk,high reward share...recovery shares (as NRR is) always are, more so with Covid.. I don't subscribe to the 'world going to end theory' I think the world will just 'muddle through' as it always does(remember 2008/9?) Likewise I think NRR will manage to muddle through all this due to its ample liquidity , 50% margins and no tax.. It's important to note that selling assets which are not recycled reduces a company's footprint which reduces UFFO and therefore dividends ..asset devaluations also reduce NAV per share. Under such circumstances, share prices in my view aren't likely to rise substantially.. Can you explain why you think a substantial fundraise would be necessary given current liquidity ? Such an act at current share prices would surely destroy shareholder value and unnecessarily so ...doubling the number of shares to 600 million to raise less than £150 million (given required discounts) will dilute shareholder value by 50% and more so given the discount you will have to offer..Current asseta sold are £62 million with a further £38 million being progressed..this alone will raise £100 million...buying back shares on the other hand would increase shareholder value as my earlier calculations demonstrated due to their being fewer shares in circulation to match the reduced footprint.. ..if as you say , share prices fell , then all the better because it would then cost less money for the company to buy them back ..my fear would be that share prices would rise too much during this exercise because there would always be a buyer for shareholders wanting to sell so sellers could ask for more ..
The sticking point is being able to sell the London portfolio or similar.. I was hopeful this could be achieved but you think not..

[dhoult12] 04/10/2020 16:16

Yes agreed. Legislation as is doesn't work.

One thing I would say is in my view some of the risk is misplaced in this sector. Yes we all know retail isn't going ideally well.. Look at the huge discounts being applied. Sorting through the fine and the unsellable is key.

However look at some of those that hold London offices still valued at huge valuations. Just like retail there is no market for new leases at the moment. Gone down from 13.74m sq ft leased central London and west end in 2018 to under 3m so far this year. And most of that at start of year pre Cv19..

Will people want a huge London office in a tower block in 2021 and at what price? Same question as will they want a shop in a centre. However, one is being carried at £600m in the books the other £30m etc

[essentialinvestor] 04/10/2020 13:41

Fwiw would allow for 20-25% peak/trough declines for UK commercial property,
Before the effect of gearing. Within this expect significant divergence in terms
of asset class (this is contingent on the moritorium ending in H1 2021).

Every investor in listed UK commercial property should be aware of the moritorium. IF this does not end in 2021, it arguably creates systemic sector risk.

As one example, why should Greggs continue to pay their rents when similar businesses refuse to pay.


Given that some well capitalised profitable businesses are refusing to pay rents, I'm surprised rent
collections have held up reasonably well for many REITS.

That may begin to change the longer a moritorium remains in place.

Perhaps the government are happy to see a complete reset of rents accross commercial property
and will intentionally let this continue?. Cant be ruled out imv.

[gbjbaanb] 04/10/2020 07:48

I imagine selling shops will either be a almost full price (for those with good prospects) or unsaleable (for those without). Which is why there was so much emphasis on alternative use, those that cannot be sold will be converted. Turning them into flats will fetch decent prices (assuming homes under the hammer isn't fake!) so I wouldn't be too pessimistic about the valuation.

[dhoult12] 04/10/2020 00:46

I'm not in principle against much tbh. If it works it works.

On this I said when I came back in on here it's a high risk high reward bet on the world not ending nor changing beyond recognition from Cv19. I'm still of that view.

To remove the risk from this my view is you need to get the LTV close to or below 40%.If that's done even though you have sold assets the share price will rise significantly as the risk of a massive raise at these levels is reduced.

A share buy back in my view leaves the risk as even larger. Someone (or multiple) won't want that risk and sell so the share buy back won't shift the price much and damage the long term prospects.

As just discussed I can't see enough buyers of these assets now to do both.

[candid investor] 04/10/2020 00:17

Ah ok...so its not the principle of buying back shares that you have a problem with but the ability to execute it at the present time ...