TIDMNRR
RNS Number : 1636L
NewRiver Retail Limited
02 July 2014
NewRiver Retail Limited
("NewRiver" or "the Company")
Portfolio update
NewRiver Retail Limited (AIM: NRR), the UK REIT specialising in
value-creating retail property investment and active asset
management, announces the following portfolio update for the first
quarter ending 30 June 2014.
During the period, the Company has successfully grown and
improved its high yielding portfolio through acquisitions, active
asset management and risk controlled development.
Portfolio highlights
-- Assets under management increased by 2% to GBP609 million
(March 2014: GBP597 million) following the acquisition of a
portfolio of four retail parks (the "Linear Portfolio") for GBP17.3
million at a yield of 9%; one high street unit in Preston for
GBP650,000; the former TJ Hughes unit adjacent to existing asset
The Sovereign Shopping Centre in Boscombe for GBP550,000; and the
disposal of the Poundland Store in Crawley for GBP5,950,000
-- Exchange of over-arching agreement with The Co-Operative
Group, to provide 54 convenience stores on new 15-year Full
Repairing and Insuring Leases
-- Total rent roll under management increased by 1% to GBP55.5
million pa
-- Completed 44 new lettings and lease renewals securing a total
of GBP613,000 pa in rent. New long-term leasing events achieved a
rental income of 14.4% above valuation ERV with an average lease
length of 13.0 years.
-- Maintained a stable retail portfolio occupancy rate of
95%
-- Weighted Average Lease Expiry ("WALE") for the retail
portfolio increased to 8.31 years (March 2014: 7.94 years)
-- Sustained an affordable average retail rent of GBP12.14 per
sq ft
-- During the period the top 10 retailers within the portfolio
defined by rental income include strong national covenants: New
Look, Poundland, Primark, Wilkinson, Superdrug, Tesco, ASDA,
Iceland, Argos and Boots
-- Good progress of the Company's development pipeline,
achieving two planning consents that will deliver 28,000 sq ft of
new and refurbished retail space.
-- Footfall across the portfolio continues to improve year on
year delivering a 2% increase during the period in April and May
with a total annual footfall of over 100 million.
ACQUSITIONS AND DISPOSALS:
Linear Portfolio
As previously announced, NewRiver further diversified its high
yielding portfolio through the acquisition of the Linear Portfolio
which comprised three retail parks and an additional standalone
retail warehouse property from a UK institution for a total of
GBP17.3 million. The freehold assets were acquired at a net initial
yield of 9.12% and the Company has identified a variety of
substantial asset management opportunities to significantly enhance
income and capital value. The portfolio provides a total rental
income of GBP1.67 million pa.
The portfolio is let to six retailers providing an attractive
weighted average unexpired lease term of 8.4 years and includes:
Clough Road Retail Park near Hull which is a 95,000 sq ft retail
warehouse let to Curry's, PC World and Smyths Toys; Wymondham near
Norwich, which is a 26,334 sq ft modern retail warehouse let to
Poundstretcher on a 10 year lease at an annual rent of GBP250,000;
Halfords Paisley near Glasgow which is a 20,120 sq ft unit let on
an eight year lease at an annual rent of GBP160,704; and Mount
Street Retail Park in Wrexham totalling 54,902 sq ft anchored by
Matalan.
40 Fishergate, Preston
Following the freehold acquisition of the 10,000 sq ft former
HSBC bank in Preston in April for GBP650,000, listed planning
consent has been granted to convert the building to a city centre
convenience store. Having secured J Sainsbury on a new 15 year
lease at a rent of GBP90,000 pa, NewRiver will commence works to
convert the building to a new c-store with handover expected in
late August 2014.
TJ Hughes, The Sovereign Shopping Centre, Boscombe
In May 2014 NewRiver successfully completed the freehold
acquisition of the former TJ Hughes department store building
adjacent to the Sovereign Centre from Receivers for GBP550,000. The
formerly vacant 45,000 sq ft store is a key acquisition for
NewRiver allowing the Company to advance its redevelopment strategy
for the centre to unlock further potential value through a major
re-configuration to create a new cinema, restaurant offer and new
enlarged retail units. The company is already in discussions with
national retail and leisure operators to secure pre-lets for the
risk-controlled re-development.
Poundland, Crawley, West Sussex
The Company has completed the sale of the Poundland Store in
Crawley following NewRiver's restructuring and extension of
existing lease. The store was acquired in March 2014 and the sale,
at a price of GBP5,950,000, generated an IRR of 320%.
ACTIVE ASSET MANAGEMENT:
NewRiver continues to create value through ongoing active asset
management, successful growth of its risk-controlled development
programme and the improvement of its food and beverage offer. The
Company is on track to enlarge its retail footprint and enhance the
retail and leisure offer and public realm of a number of its
shopping centres:
Regents Court, Leamington Spa
Excellent progress has been made in the Company's strategy to
reposition Regent Court as Leamington's principle food and leisure
destination with the successful grant of planning consent and the
completion of three new lettings complementing the already trading
restaurant operators, Nando's and Turtle Bay, which the Company has
introduced since its acquisition of the centre.
The combined rent for the three new lettings totals GBP167,000
pa at an average of 17% above ERV. Firstly, the surrender and
re-letting of the former Strada unit to Las Iguanas for a lease
term until June 2034 at a rent of GBP82,500 pa. Secondly, a new
letting to Zou Bisou, a frozen yogurt operator, on a 10 year lease
at GBP36,625 pa; and thirdly to De Montford Fine Arts on a new 10
year lease at a rent of GBP49,500 pa.
Following the successful planning consent awarded in February
2014 to refurbish and upgrade the public realm, plans are being
finalised and tendered with works due to commence in August
2014.
The Deeping Centre, Market Deeping
NewRiver has successfully appealed and received planning consent
to develop two modern retail units on land adjacent to the centre
that is anchored by a 30,000 sq ft Co-Operative supermarket. The
two units provide 8,000 and 10,000 sq ft respectively, create
additional parking and will enhance and improve the retail offer
and environment.
Albert Square Shopping Centre, Widnes
Redevelopment plans to extend the shopping centre are well
advanced and on course for the scheduled hand over of a 10,800 sq
ft store in late July to 99p Stores on a new lease for GBP135,000
pa on a 10 year term. The development reflects an attractive yield
on cost of 10% whilst enhancing the retail offer of the existing
asset.
The Forum Centre, Wallsend
During the period, NewRiver agreed new lettings with three local
retailers, increasing annual income by GBP46,000 pa. A3 planning
consent was also secured on 1/3 High Street to facilitate a new
letting to a national restaurant operator. The Company is also
pleased to announce that the shopping centre footfall has increased
by 23% and an increase in town footfall by 11% following the
opening of Home Bargains, 99p Stores, Iceland and the new Community
First Centre and Library in February 2014.
Phase two of the Centre's redevelopment is well underway with
the demolition of the residential units on the adjoining site now
complete. Detailed discussions are underway with a major food
retailer, a drive thru fast food operator and additional
retailers.
Locks Heath Shopping Village, Fareham
Following the success of the introduction of Waitrose to the
centre, footfall has increased by 14% month-on-month in April.
Development plans are progressing well to introduce further retail
units within the centre with offers received from a variety of
major retailers.
The Prospect Centre, Hull
NewRiver is advancing its strategy to re-position The Prospect
Centre with an improved food and leisure offer. Following the
opening of StrEAT, a multi-vendor food court in 2013, activating
formerly disused space in the centre's atrium, the Company has
further secured A3 planning consent with a simultaneous pre-let to
a key food operator. Your Gourmet Burger has signed a 15-year
agreement for lease at a rent of GBP35,000 pa.
Eurochange has taken a new mall pod generating GBP15,000 pa of
additional income in line with NewRiver's strategy of maximising
returns from underutilised mall space.
Hill Street, Middlesbrough
NewRiver has secured three new lettings and one lease renewal
totalling over GBP215,000 pa in rental income.
Warren James have relocated on a new 10 year lease paying
GBP42,500 pa which will allow NewRiver to increase the food and
beverage provision in the South Mall. Ramsdens has taken a five
year lease at a rent of GBP45,000 per annum to launch their first
'Savvi' concept store in the UK. West Coast has taken a 10 year
lease paying GBP55,000 pa with a turnover provision. Phone retailer
Three has re-geared its lease for an additional five years at
GBP75,000 pa, committing the tenancy to 2021.
The Beacon Centre, North Shields
NewRiver completed three new leasing events with Shoe Zone,
Urban Fashion and Dickinsons Butchers at combined rents of
GBP70,000 pa. A3 planning consent was granted for two units, one
for a new 10 year letting to a regional café operator and the other
to facilitate a freehold sale to a Costa Coffee franchisee
improving the food and beverage offer and increasing dwell time. A
programme of enhancement work is being finalised to rebrand the
centre to improve and modernise the appearance internally and
externally.
Unit 47, 5 Trinity Square, Hereford
Contracts have been exchanged with Poundland on a new 10 year
lease at a rent of GBP200,000 pa. The letting was agreed
simultaneously with the early surrender of TK Maxx who previously
paid GBP185,000 p.a.
Growing portfolio restaurant offer
NewRiver has completed three long term lettings with CPL Foods
trading as Burger King. The new restaurants will open in Llanelli,
Carmarthen and Wisbech on new 20 year lease terms at combined rents
of GBP180,000 pa plus turnover top up provisions. NewRiver
continues to work closely with CPL to develop the portfolio
restaurant and food court offer.
Car Parking
NewRiver has agreed terms with one of the UK's market leading
car park operators, Smart Parking, to operate and manage the
shopping centre car parks in Wallsend, Bramley, Market Deeping and
Fareham on a limited stay free parking basis in order to improve
vehicle circulation, signage and enhance the customer
experience.
Wi-Fi
As part of NewRiver's commitment to drive innovation and enhance
the customer experience within our shopping centres, NewRiver is
installing free Wi-Fi to its recently acquired shopping centres
with existing wifi provider for the portfolio, BSKYB's The
Cloud.
Marston's Plc portfolio
The Company is progressing well on the conversion of its 202 pub
portfolio acquired from Marston's in December 2013.
In April, NewRiver announced conditional agreements to lease 54
new convenience stores to The Co-operative Group. The majority of
c-stores will be new-build projects constructed on surplus land
adjacent to the existing public houses. The remaining part of the
Portfolio will be conventional conversions from public house use to
c-stores or redeveloped as standalone c-stores. It is expected that
the majority of the completed assets will be delivered within two
years.
In total, NewRiver is developing almost 200,000 sq ft of new
c-store space for The Co-operative Group. The lease terms are 15
years with no break clause and an annual RPI-linked rental increase
formula capped at 4% and collared at 1%. The rental income agreed
varies between GBP15.00 per sq ft and GBP17.50 per sq ft.
Allan Lockhart, Property Director at NewRiver Retail, said:
"At the end of the first quarter of our financial year, we are
delighted to report another highly active and successful period. We
acquired the Linear retail warehouse portfolio, recycled equity
through the profitable sale of the Poundland store in Crawley and
are driving forward our risk-controlled development programme
including securing two planning consents as well as completing a
key acquisition in Boscombe to unlock further value within that
existing asset. Our active asset management programme continues to
improve the quality of our portfolio income stream through the
enhancement of the retail, food and leisure offer.
This highly active first period builds upon our successful track
record and underpins NewRiver as the leading value-creating real
estate specialist, committed to and delivering attractive long term
returns for shareholders."
-Ends-
For further information
NewRiver Retail Limited Tel: 020 3328 5800
David Lockhart, Chief Executive
Mark Davies, Finance Director
Bell Pottinger Tel: 020 7861 3232
David Rydell/Guy Scarborough/David
Bass
Liberum Tel: 020 3100 2000
Tim Graham/Simon Atkinson/Jamie
Richards
About NewRiver
NewRiver Retail Limited is an AIM listed REIT. The Company is a
specialist real estate investor and asset manager focusing solely
on the UK retailing sector with a particular focus on food and
value retailing.
The management team, with over 100 years combined experience in
the UK commercial property market, actively engages with retailers,
stakeholders and consumers. NewRiver Retail is the UK's third
largest Shopping Centre owner by number with assets under
management of approximately GBP609 million principally comprising
24 UK wide shopping centres, four retail parks, 17 high street
retail units, one supermarket and a portfolio of 202 public houses
mainly suitable for conversion to alternative uses. The portfolio
has in excess of 1,118 occupiers, a total of 4.6 million sq ft,
total annual footfall of over 100 million and a retail occupancy
rate of 95 per cent.
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.
Founded in 2009, NewRiver has become the UK's leading
retail-focused property investment business. The Company's shares
were admitted to London's AIM in September of the same year. For
more information on NewRiver, please visit www.nrr.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
END
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