Newriver Reit Share Discussion Threads

[chucko1] 24/7/2018 15:48

Yes, I agree. The lease obligations are a given(?) whereas the otherwise corporate indebtedness did not suffer the Private Equity-type pumping up. On DEB capitalised leases are very small, but I cannot tell at first glance where the rents/leases come into the income statement as Cost of Revenue is not easily broken down (or at least I do not have it to hand).

In my opinion, I would expect to see these costs within Cost of Goods Sold rather than S,G and Admin as it is effectively a cost per store and hence proportionate to revenue.

[spectoacc] 24/7/2018 14:47

@chucko1 - lease obligations? Not that those seemingly can't be got out of these days.

[chucko1] 24/7/2018 14:32

hpcg - the only thing I would say about DEB is that they are not drowning in debt. But I agree that I cannot see how they reposition themselves although at the current SP, someone/thing might try and take a flier.

[hpcg] 24/7/2018 13:52

r.e. DEB, as with every other listed company we can say for certain that 100% of the shares are owned by someone. Sports Direct are obviously a substantial bag holder; difficult to imagine them ever getting their basis back. There is a certain class of investor that is attracted to distress stories; probably all of us at one stage or another! DEB and HoF doomed so far as I am concerned, irrespective of financials. There is no mid market, John Lewis is the new bottom tier pitching to the aspirational middle class.

[spectoacc] 24/7/2018 12:47

I don't see DEB surviving in current form - at least not without some serious investment/fund raising. I do, however, remember Next trading at 13p..... (Sorry, bit o/t - not a holder of NRR but keeping an eye on them).

[chucko1] 24/7/2018 12:17

Acually looks as though PIs have been jumping into DEB of late. That said, they're not paying much!

[essentialinvestor] 24/7/2018 11:23

HMSO have bid interest in the background, so it's perhaps accelerated
a strategy refocus.

Hp, the rapidity of the DEB profitability decline is something to behold.
Would hope most PI's are long gone.

[hpcg] 24/7/2018 09:58

HMSO report well worth a read. No so much for the direct comparison, but what they are doing. It is aligned with my view, so confirmation bias aside I'm comfortable with the trends:

1. Moving out of retail parks. In my opinion these are a bigger loser from the internet than the high street. They were all about convenience for the car driver in return for a soulless experience. Noted 10% below book NAV on what they have sold thus far.
2. Reducing department stores and single unit fashion.
3. Long centres of excellence.
4. Long premium fashion to go in those centres.
5. Using land near those premium centres for residential.

NRR isn't playing the same game, but I think this is important, internet shopping can be less convenient for those close to shops. This includes supermarkets, food shopping and fast moving, through an array of consumer goods including fashion, homeware and durable goods. The key to new retail is high density, both in the immediate and local vicinity, with travel by foot or convenient high frequency public transport. That density can come from commercial as well as residential, but both covers a lot of bases through the week. It looks like both HMSO and NRR are playing this strategic game.

Edit - to be clear, NRR and HMSO are diverging on the retail park element, and I prefer what the latter is doing, however I'm ok with NRR specifics in this regard, and that no frills supermarkets are a good anchor tenant. Worth discovering where the Tesco Jack fascia will end up.

[essentialinvestor] 23/7/2018 17:31

HMSO update tomorrow,
appreciate NRR operate in a niche sub sector.

[hpcg] 23/7/2018 17:09

Sure, but that ties up capital too. If GBP moves a lot against the Euro or USD, say 10%, then I can have that capital appreciation as well as any income and recycle into NRR and get a lot more for my money.

[chucko1] 20/7/2018 11:38

hpcg - you can hedge your GBP income very easily if it's the FX risk that concerns you. In any event, do you not have GBP outgoings to match against?

[hpcg] 20/7/2018 11:27

EI - I'm not chasing, if buying at 280p could be called that. Perhaps 270p is support? Still that 10p is 3%, which is meaningful in this context. My caution is that these are sterling earnings and I feel safer with euro / dollar income plays at this time.

[essentialinvestor] 19/7/2018 15:09

Hp, nicely timed.
Nearly bought a very small amount Monday,
however thought a greater discount to NAV may be available,
Perhaps a misjudgement on my part. Will keep it on watch.

[chucko1] 19/7/2018 14:31

A0002577, you may already have done so, but if you go onto the NRR web site and look at the short videos from the various senior management, you may (I did, anyway) gain significant confidence in their ability to deliver. They are very experienced with a successful track record, not just in this enterprise, but in two previous ones (property-related). There may be certain risk-factors that investors accept/decline concerning NRR's prospects, but I do not see management as one of the major ones.

[a0002577] 19/7/2018 11:28

Quite right, hpcp, One of the reasons why I have invested in this. Another one is the way they are adding value to their pub estate by building 'corner shops' near them where they have the land. If half of what they say in their annual report and the recent update is true then they do really have some USPs. If it's all true - and there is no reason to suppose it is not - then it has to be the snip of the day.

[hpcg] 19/7/2018 10:55

fenners - my understanding is that the revisions to planning regs a couple of years ago make change of use to residential more or less pre-approved unless there is some major reason why not. In reality councils welcome it because it brings super local footfall to town centres, new housing, and higher density to spaces which are often quite low rise.

[chucko1] 18/7/2018 17:41

@SpectoAcc, I suppose the other view is the they are reminding the market that they are more than about just retail. The pub estate has been built over some time, so I suppose it's natural to refer to it, especially as they continue to make additions. Ditto residential development.

@hpcg - you worry that you are gradually catching a falling knife, but at least the heavy and increasing dividend (covered) allows you to wear thick leather gloves as you do so.

I see the risk/reward here being as good as it gets considering the REITs sector. That's the good thing about having others with an alternative viewpoint - without that, the available returns would never have presented themselves!

[fenners66] 18/7/2018 08:46

Better than market footfall - but still down (2.5%)

i didn't know about the options for developing residential units - how far have they got with planning permission and presumably securing a building partner / where are they located ?

[spectoacc] 18/7/2018 08:10

Good t/s, tho not seeing anything new in it. Not sure they should keep reminding the market they're now partially a pubco ;)

[hpcg] 17/7/2018 10:36

I bought some yesterday. Possibly too soon, as realistically I expect it to fall more. I need to do a bit more research, but from what I saw of some sites I think the properties are resilient. Hotels are a growth business and I think they are good anchors for a range of sundry type retail; convenience stores, food, and even pharmacy to an extent. I don't see the likes of Wilkinson's disappearing in the same way that Aldi, Lidl and Primark won't; their business model does not support delivery, which however you look at it is more expensive than a retail hub-spoke model. Similarly any other esoteric non-retail which generates foot traffic - and I include in that housing.

So I guess I gradually catch the falling knife because I think the business is sustainable and the returns relatively secure. Gulp.

[a0002577] 17/7/2018 10:04

Probably it did, Fenners, but that is blindingly obvious as the share price is pretty close to its original issue price (250) and has moved from a premium to a discount as the whole sector has been de-rated over the past few months. Holders have lost some money - but if I buy it will be the first time in to this share - and I am seriously watching it. Now yielding a touch over 8% which is not to be sneezed at.

[fenners66] 17/7/2018 08:12

Did IC not say that it is not immune to the whole sector being out of favour ?

[a0002577] 16/7/2018 18:10

In essence a high, sustainable, dividend (forward 8%) which has risen every year since listing, good, well managed player at a 7+% discount to NAV. Rents affordable and high renewal rate of 97%, always looking for added site value by - for example - building a convenience store next to a pub and vice versa and using surplus area for housing.

The annual report gives much more detail and is worth a read. see

Trying to differentiate themselves by calling themselves a Community REIT

"Founded in 2009, we specialise in buying, managing, developing
and recycling convenience-led, community-focused retail and
leisure assets. "

"Our assets either display both convenience and community characteristics
(shopping centres and convenience stores) or strongly display one (convenience
– retail parks) or the other (community – pubs)."

Just about now might be a good time to buy in

[joan of arc] 13/7/2018 18:02

B2, I don't subscribe to IC so what's the essence of the recommendation?

[bench2] 13/7/2018 12:23

Excellent write up and Buy tip in todays Investors Chronicle