Newriver Reit Share Discussion Threads

[m_kerr] 27/9/2021 19:07

look at the huge difference between the yields they've been buying on the open market, v what their own portfolio constituents are valued at. e.g. IIRC the moors sheffield was on the market at a guide price of about £90m, eventually selling at £41m. i'd be wary of a read across on their disposal yields as they are generally selling their best quality assets.

[lord gnome] 27/9/2021 13:18

Bouncing again today. We are in demand all of a sudden. I won't get too excited just yet, though. I will raise half a smile once we get past 100 again.

[ghhghh] 27/9/2021 08:33

Shares bounced last Monday on a 14 page Shore Cap Note

Page 7 breaks down the Alt Use value - £768m versus £726m alive.

Retail Parks get hit, £157m down to £117m and Work Out suffers the biggest % drop, £132m down to £61m.

Regional Shopping Centres are the big winner, a £120m uplift.

[m_kerr] 24/9/2021 23:28

there's a lot of garbage in their portfolio. they're paying the price for chasing yield and prioritising short term returns, having sold quality assets like supermarkets, and spruce field. NAV has roughly halved in no time at all. they're stuck with plenty of assets for which there are virtually no buyers, at least at prices coming anywhere near where they'll be in the books at. it's been over 7 years since they sold a shopping centre from what i can see.

[ghhghh] 21/9/2021 08:19

New Note out from Shore Cap, forecasting a 2022 dividend of 5.8p rising to 7.5p for 2024.

Targeting 100% 'resilient retail' by 2025. This will close NAV discount.

NAV estimated at 130p. Possible share buy back.

imo CMD will be a big event and I'm assuming major update ahead of this...

[nickrl] 17/9/2021 14:16

retail sales suffered another small drop this month how much is down to shortages though I don't know but with inflation pressures in this sector you can see FD's looking for costs they can keep a lid on which is rents in these shopping centres where there isn't exactly a queue of companies wanting to get space. im holding back till capital markets day currently.

[hugepants] 17/9/2021 10:39

I rejigged the percentages of the portfolio after the Pubs disposal. So I reckon should look something like this.

30% core shopping centres (High occupancy and retention rates. Possibility to increase value)
30% regeneration shopping centres. (Desirable town centre locations)
22% retail parks. (Hopefully valuations have bottomed and should increase from here)
18% rubbish shopping centres. (Lower rent and occupancy. Aim to convert some to core shopping centres and dispose of others. Probability of decrease in value).

Core shopping centres + retail parks are over 50% of the portfolio now.
I think the biggest question mark is over the value of the regeneration shopping centres. Hopefully they have been really prudent with the valuations!

[mindthestash] 16/9/2021 11:05

Thanks ghhghh
I'll think on and keep an eye on events.

[ghhghh] 16/9/2021 10:26

mindthestash

Sentiment is such a factor. Investors need to remember that the bottom is when the last bull turns bear. And be careful to avoid confirmation bias

As PI's we only see the tip of the iceberg so I agree we need to be cautious. However at 72p NRR is discounting a vast amount of bad news. The directors claim that they saw the online sell off coming, that they are positioned with focus on essential goods and that the portfolio is underwritten by alternative value.

At a 45% discount to NAV, are they so wrong/crooked that we are going to lose money at 72p?

Today's trading will be interesting. My reading yesterday was that one mm had taken on say Xm at 72p and was whacking them out before the trade showed. There was a trade of 400K at 72p at the close but too small to cause such a drop?

[mindthestash] 16/9/2021 09:36

Morning ghhghh and all.
ghhghh- from some of your other posts you have spotted discounted value or where the market is miss-pricing - you've got more experience in this scenario than me - you've got my attention but i have a question

I think there's money to be made. At some point there should be an inflection in sentiment and the share price. But my question is why/what reasons are their to think this board and management can take the market price back?

Usually in these changes of sentiment there's a really clear change of operational direction or change in people at the top - who then re-fire the efforts into a clear deliverable - believable strategy. I dont see that here. its the same old crew selling the same old story plus 'lets bet the balance sheet on more of it!'

why do you think this board and management can take the market price back?

To answer your question to us doubters
I think retail has hit the bottom in retail sheds/parks and shopping centres that are located to take advantage of conversion to food halls/markets with shopping attached. But traditional town centre shopping centres and high street - no i dont think its at the bottom - my view as well a a general trend downwards there's going to be additional blight/supply in many locations from town centre office re-purposing. My guess is the bottom for this town centre stuff will be when rents and lease terms are lower than out of town retail sheds and attract independent and smaller traders.

[ghhghh] 16/9/2021 08:03

Re auction valuations, can be dire if desperate seller and no buyers. There were few buyers earlier this year.

Whatever, this boils down to BoD credibility. Is Baroness Ford or Ms Chaldecott going to sign off on a 130p to 140p NAV if not remotely in the right ball park?

Retail has been in freefall but do you agree it's now forming a bottom?

Bottom line, 130p offers a wide margin for error.

[davr0s] 15/9/2021 17:39

Yeah me - I exited today

[bondholder] 15/9/2021 16:55

Unfortunately reality is that shopping centres have sold this year at auction for 20/40 psf and 20 plus percent gross yields e.g. West Orchard Coventry / Swan Kiddeminster. Latter was NRR and sold far below latest valuation. NRR have huge exposure to shopping centres. It's all very well to talk about redevelopment but as others have pointed out it takes years to get planning and then you have to fund it without diluting the existing shareholders into oblivion.

[cwa1] 15/9/2021 14:48

Do "we" have any idea as to who the seller(s) are?

[ghhghh] 15/9/2021 14:46

Yes, I'm buying in 50K chunks c. 0.4p apart. I'm the only buyer and seller chasing me down in search of volume.

70p is a 46% discount at 130p NAV!

[cwa1] 15/9/2021 14:19

It is certainly struggling to find a bottom

[nickrl] 15/9/2021 13:50

They will be able regurgitate the slide deck from a couple of years back when they promoted Grays as a great RESI development play oh and recycle the artists impression on Burgess Hill again telling us what a great opportunity is. It was four years ago but they didn't act and nett impact is it will cost the more now and as @mindtrash says will be ready into the next down cycle if they push the go button now.

Negatives aside i will dabble again below 70 as someone will see an opportunity to break it up. ie Bravo JV would readily by up the retail pks and there's plenty of daft councils out there that will take on the shopping centres.

[ghhghh] 15/9/2021 12:34

I'm still buying and bullish

Debt unsecured and 4 years

Rents are low.

Significant redevelopment potential, especially off the low base above.

Most conservative NAV I've seen is 130p, that's an eye watering discount versus rest of sector and tops Hammerson

Yes it's in out of favour retail but this sector is in the process of bottoming out.

Next year's dividend forecast at 6p - Liberum

The discount to NAV looks overdone and likely to be a large seller trying to exit an illiquid position. We saw this with Ediston, BMO Commercial, Schroders etc. Weeks of being grossly oversold.

Director bought £50K at 82p a month ago.

Investor briefing on 30th September, focusing on strategy and value extraction.

[mindthestash] 10/9/2021 22:38

Please. Somebody. Anybody. Come up with a scenario where my analysis is wrong and present a readable alternative where it all turns up profit. No really... I've still got sinking coin in this.

[mindthestash] 10/9/2021 16:29

Hello Propinv
Now just under 75p and heading for the swinging sixties
Unfortunately the chair wont be swinging the axe; it all seems too cosy.

As you'll note from prev post to answer your question- no i dont - and particularly resi is an added risk where they seem to have no/little experience? happy to be corrected

1. They'll have to navigate social housing tarrif and viability arguments - a very specilaist area and can take years...
2. They havent explained if the resi is buy and hold for income in which case the yields on resi are generally poor - if its a straight exit for profit they are too late to the party and they'll be selling in say 2024 with interest rates heading up (my view -if only marginally)
3. To get the development funded and buy in the expertise probably means a JV or some sort?

mind you at 60p -will someone who knows what they are doing take a shot at it?

[bondholder] 10/9/2021 16:00

What they've proved they can do is destroy hundreds of millions in shareholders equity.

[propinv] 10/9/2021 15:45

Do people believe the management have the in house capability to deliver the development pipeline?

[mindthestash] 08/9/2021 16:50

Ghhghh might be better to have waited till after the capital markets day because Every time they say anything the market price tanks. After they explain how their betting the balance sheet on 30% increase in floorspace you'll get it for 60p.

[ghhghh] 08/9/2021 16:25

I've been buying more. Assets unsecured/covenant light and decent maturity dates. Residential change of use potential on significant part of portfolio. I'll enjoy the yield until sector returns to favour/BoD generate new value

[bondholder] 08/9/2021 15:55

I would not be surprised if the share price fall today is partly them dumping shares to pay the tax