NRR Newriver Reit Plc

 

TIDMNRR 
 
RNS Number : 6533P 
NewRiver Retail Limited 
21 July 2010 
 

 
 
 
              NewRiver Retail Limited ("NewRiver" or "the Company") 
                        AGM and Trading Update Statement 
 
At today's Annual General Meeting of NewRiver Retail Limited, the specialist 
value-creating retail property investment and asset management company, the 
Company will make the following statement: 
 
"As stated in the financial results of 15 June 2010, trading for the current 
period has started well, and the Company has continued to build upon the 
strategic initiatives put into place at the time of admission in September 2009. 
 
NewRiver has been established as a specialist real estate investor and asset 
manager to take advantage of opportunities in the next cycle of the UK retail 
property sector. It creates value through active and entrepreneurial asset 
management and risk-controlled development, utilising both its own balance sheet 
and co-investment joint venture structures. Commercial property has become a 
global asset class and the Board believes that as the economy starts to recover, 
investors will increasingly seek to identify 'best of class' sector focused 
asset managers. NewRiver's investment platform concentrates solely on the UK 
retail property sector, with particular emphasis on the food and value 
sub-sectors. NewRiver has capitalised on the falls in capital and rental values 
that occurred during the recent downturn and continues to identify opportunities 
where its investment managers' opportunistic and entrepreneurial asset 
management and development skills create added value and generate returns for 
shareholders. 
 
The Company passionately believes it is in the vanguard of the next generation 
of property companies: sector specialists with proven asset management skills. 
Investors are increasingly seeking specialist operators that can deliver out 
performance. The decision to focus on the retail sector was taken not least 
because of the skills and extensive experience of the management team but also 
because it is the largest sector, genuinely operates across the UK, and has 
performed favourably against other property classes over the long term.  In 
addition the retail sector allows landlords to develop long term relationships 
with the occupiers and is the most dynamic as retailers constantly seek to win 
market share through changing formats and customer offer. 
 
Since inception, the Company has been very active and I am pleased to report a 
number of advances since the end of the financial year. In May we raised an 
additional GBP10.5 million to capitalise the joint venture with Morgan Stanley 
Real Estate Investing ("MSREI") and further strengthen the balance sheet. In 
June we announced the acquisition of the REDEVCO portfolio of UK retail assets 
for just over GBP19 million, closely followed by the acquisition of 49/53 
Northumberland Street for GBP4.2 million. 
 
Importantly, the Company's portfolio is performing strongly and continues to 
benefit from the skills of the investment managers' entrepreneurial asset 
management approach. In total some 18 properties have been acquired in five 
separate transactions, with spending of approximately GBP84 million, GBP49 
million of which was in the joint venture with MSREI. Total floor area under 
management is now in excess of 800,000 sq ft and the total portfolio enjoys a 
very low void rate of just 3.2%.  The void rate falls to just under 0.6% for the 
wholly owned portfolio (ie those not held in the joint venture with MSREI). The 
total portfolio's weighted average lease length is a healthy 8.7 years when 
including the joint venture, which increases to 11.7 years for on balance sheet 
assets. 
 
The quality of tenant mix is excellent, with more than 90% of passing rental 
income now being generated from strong covenant national retailers.  The top ten 
tenants by rental income are now, in ascending order, Wilkinsons, TJ Hughes, 
Sainsburys, Tesco, New Look, The Co-op, Peacocks, Bank Fashion, H Samuel and 
Argos. In line with NewRiver's stated strategy of focusing on the value and food 
sub sectors, the majority of revenue - some 72% - is derived from value and food 
retailing. 
 
The Company believes its tenant profile represents a diverse, highly resilient 
and secure income stream generated from long term well financed businesses. In 
line with its UK wide strategy, the portfolio is UK-wide but weighted towards 
affluent conurbations. The south east of England and Greater London areas 
represent 39% with 7% in the East of England. All of the assets have been 
acquired at a blended net initial yield of 8.6% and with a current average cost 
of borrowing of circa. 4%, the portfolio is highly cash generative. This 
reflects the very strong buying skills of its investment managers. 
 
The Board is committed to a progressive dividend policy which it intends to 
implement as soon as possible. 
 
In accordance with the expanding portfolio the NewRiver Capital Limited team has 
grown from two to 11, including a number of senior professional management 
appointments, all of whom have extensive experience and knowledge of the UK 
retail property markets. The investment manager team is led by David Lockhart, 
the respected founder of Halladale Group and supported by Allan Lockhart, Mark 
Davies, Nick Sewell and Nick Scott. 
 
NewRiver raised initial capital of GBP25 million on Admission and stated its 
intention to return to investors for future capital to accelerate the growth of 
the business. The Company returned to the market in May 2010, shortly after the 
period end, raising a further GBP10.5 million and will seek further capital 
raising opportunities in due course. 
 
A number of key objectives have been met since NewRiver's creation in September 
2009 and we are building on the considerable momentum achieved. The start to the 
new financial year has been encouraging. The Board looks forward to the future 
with confidence. 
 
                                     -ends- 
 
For further details contact: 
 
NewRiver Retail Limited 
Serena Tremlett 
                Tel: 01481 735 540 
NewRiver Capital Limited 
David Lockhart 
                 Tel: 0203 328 5800 
 
Cenkos Securities 
 
Ian Soanes 
Max Hartley 
                   Tel: 0207 397 8900 
 
Pelham Bell Pottinger 
          Tel: 0207 861 3232 
David Rydell 
Rosanne Perry 
 
About NewRiver 
NewRiver Retail Limited is a specialist real estate investor and asset manager 
with a particular focus on the UK retail sector. NewRiver Retail is advised on 
property matters by its wholly-owned subsidiary, NewRiver Capital Limited, whose 
management team, led by David Lockhart, have more than 50 years' combined 
experience in UK commercial property markets. The Company's activities include 
active and entrepreneurial asset management and risk controlled development, 
utilising both its own balance sheet and co-investment joint venture structures. 
It is NewRiver's intention to become one of the leading sector-focused 
value-creating property investment businesses operating in the UK retail sector. 
The Company was founded in 2009 and its shares were admitted to London's AIM and 
Channel Islands Stock Exchange (CISX) in September of the same year. 
 
For more information on NewRiver, please visit www.newriverretail.com and 
www.newrivercapital.co.uk 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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