Good morning. One hundred and thirty two minutes late, defective junction box at New Malden. I do apologise for being late, this was not due to faulty railway infrastructure, but rather due to over-indulgence at the Pub after another excellent meet the management function yesterday at FinnCap.
A large group of us met three companies, and I was highly impressed with management at Newriver Retail (LON:NRR) . As a former retailing FD, I know my way around property leases, and these guys really do know what they're doing. If one can take a long term approach, then in my opinion New River shares are as close as you can come to a sure fire winner. Management have been there & done it before, so you have a CEO with 30 years property experience, and for a relatively small portfolio of property assets they are working flat-out to add value to.
To be brutally honest, I despise many people in the Listed property sector - all too often they are greedy, arrogant people of dubious ability, who think they have some God-given right to enormous salaries & bonuses, when what they actually do is just float to the top in bull markets, adopt fake posh accents, and rip off their investors (more fool them!). Gravel-voiced b***-shitters, as a mate of mine describes that type - in fact they are not confined to the property sector, think of 50%+ of all Listed company Chairmen, and you'll be bang on the money. Dreadful.
In contrast, New River is a class act. You've got a CEO who's been there & done it before. More importantly, he can read the cycle, and his whole presentation yesterday was music to my ears - all based on Buffett principles of value. He sold his last property company at the top of the cycle, and set up New River at the bottom of the cycle - and he's in it for the right reason - because he loves doing it! They are buying retail properties on yields of about 9%, borrowing money at about 4%, so the economics of it are blindingly simple.
They've got every risk covered, and being a REIT are obliged to pay out 90% of earnings as dividends. That is a great way of capping management remuneration too. There is about 50p of unrealised property…
