REG - NewRiver REIT plc - First Quarter Company Update

Newriver ReitAnnouncement

05/08/2024 07:00

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RNS Number : 0751Z  NewRiver REIT PLC  05 August 2024

 

NewRiver REIT plc

("NewRiver" or the "Company")

 

First Quarter Company Update

 

Growth in Capital Partnerships Accelerated

 

Allan Lockhart, Chief Executive, commented: "The strong operational
performance delivered in our last financial year continued into the first
quarter of FY25 with leasing transactions ahead of ERVs and occupancy and
tenant retention rates maintained at elevated levels. Our portfolio continues
to perform well underpinned by good occupational demand and the quality of our
asset management.

The acquisition of Ellandi, a high-quality asset and development management
business, in early July accelerates the growth in our Capital Partnership
business, where we have now established a meaningful platform. We now own or
manage £2 billion of retail real estate assets, collecting nearly £190
million of annual rent from over 3,000 tenants. This scale provides us with an
incredible insight into the consumer, retail and capital markets.

Finally, our balance sheet is in a good position with cash up to £134 million
which provides us significant deployment optionality."

 

Expansion of Capital Partnerships through acquisition of Ellandi Management
Limited

 

 ●    In July 2024, acquired Ellandi Management Limited ('Ellandi'), an asset and
      development management business focused on UK retail and regeneration, for an
      initial cash consideration of £5 million, with additional cash consideration
      of up to £4 million subject to EBITDA performance, including realising
      savings through shared services, over a three year earn out period
 ●    The transaction provides NewRiver's existing Capital Partnership business with
      additional scale and diversification, as well as introducing complementary
      experience of managing destination shopping centres and regeneration projects,
      and is consistent with NewRiver's strategy to deliver earnings growth in a
      capital-light way
 ●    The Ellandi business brings with it a portfolio of 16 shopping centre asset
      management mandates, covering over 6.3 million sq ft, with 10 different
      partners as well as extensive experience working with public sector owners to
      deliver regeneration
 ●    During the year ended 30 April 2024, Ellandi's fee income was £5.7 million(1)
      and EBITDA was £1.1 million(1)
 ●    The combined Capital Partnership business has significantly increased scale,
      with Assets Under Management ('AUM') of c.£1.5 billion across a portfolio of
      21 shopping centres and 18 retail parks, with 13 different partners. Including
      NewRiver's wholly owned portfolio of retail assets, this increases total AUM
      to c.£2.0 billion across a portfolio of 43 shopping centres and 29 retail
      parks and an existing fee income stream of £8.2 million(2)

 

Strong operational performance

 

 ●    Occupancy maintained at 97.3%
 ●    Completed 147,300 sq ft of leasing, with long-term transactions +4.3% vs ERV
      with Weighted Average Lease Expiry of 7.3 years; 5(th) consecutive quarter of
      leasing outperformance vs ERV
 ●    Maintained consistently high leasing retention rate of 95%
 ●    Average rent remains affordable at £11.96 per sq ft
 ●    Further progress made with Work Out disposal programme: of the five Work Out
      assets remaining at 31 March 2024, one further disposal has now completed,
      in-line with March 2024 valuation
 ●    In May 2024, named in the Sunday Times Best Places to Work 2024 for the second
      consecutive year

 

Robust balance sheet underpinned by capital discipline

 

 ●    Cash & cash equivalents increased to £134 million at 30 June 2024
      (proforma for Ellandi initial cash consideration of £5 million) from £133
      million at 31 March 2024
 ●    LTV as at 30 June 2024 of 30.8% (using March 2024 portfolio valuation and
      proforma for Ellandi initial cash consideration of £5 million), in-line with
      position at 31 March 2024
 ●    Currently considering opportunities to allocate capital and in the meantime
      generating a 5% return on the majority of cash holdings
 ●    Fully unsecured balance sheet with interest rate fixed at 3.5% on drawn debt
      and no maturity on drawn debt until March 2028

 

 

Possible Offer for Capital & Regional plc ("Capital & Regional")

 

 ●    On 23 May 2024, the Board of NewRiver confirmed that it had made a preliminary
      proposal to Capital & Regional's majority shareholder, Growthpoint
      Properties Limited, in relation to a possible offer in cash and shares for the
      entire issued, and to be issued, share capital of Capital & Regional plc
      ("Capital & Regional")
 ●    In accordance with Rule 2.6(a) of the Code, NewRiver is required, by no later
      than 5:00 p.m. on 15 August 2024, either to announce a firm intention to make
      an offer for Capital & Regional in accordance with Rule 2.7 of the City
      Code on Takeovers and Mergers (the "Code") or to announce that it does not
      intend to make an offer, in which case the announcement will be treated as a
      statement to which Rule 2.8 of the Code applies. In accordance with Rule
      2.6(c) of the Code, this deadline may be extended further at the request of
      the Board of Capital & Regional and with the consent of the Takeover
      Panel.  There can be no certainty that any firm offer will be made for
      Capital & Regional, nor as to the terms of any firm offer, if made

 

Notes

 1.  Consolidated Ellandi Management Limited and Ellandi LLP
 2.  The sum of Consolidated Ellandi Management Limited and Ellandi LLP fee income
     for year ended 30 April 2024 and NewRiver REIT plc Asset management fees for
     the year ended 31 March 2024

 

 

For further information

 

 NewRiver REIT plc                             +44 (0)20 3328 5800
 Allan Lockhart (Chief Executive)

 Will Hobman (Chief Financial Officer)

 

 

 FTI Consulting              +44 (0)20 3727 1000
 Dido Laurimore

 Giles Barrie

 

About NewRiver

 

NewRiver REIT plc ('NewRiver') is a leading Real Estate Investment Trust
specialising in buying, managing and developing resilient retail assets
throughout the UK.

 

Our £0.54 billion UK wide portfolio covers 5.9 million sq ft and comprises
23 community shopping centres and 12 conveniently located retail parks
occupied by tenants predominately focused on essential goods and services. In
addition we manage 18 retail parks and 21 shopping centres on behalf of
Capital Partners, taking our total Assets Under Management to £2 billion. Our
objective is to own and manage the most resilient retail portfolio in the UK,
focused on retail parks, core shopping centres, and regeneration opportunities
in order to deliver long-term attractive recurring income returns and capital
growth for our shareholders.

 

NewRiver is listed on the equity shares (commercial companies) segment
("ESCC") of the Official List and admitted to trading on the Main Market of
the London Stock Exchange (ticker: NRR). Visit www.nrr.co.uk for further
information.

 

LEI Number: 2138004GX1VAUMH66L31

 

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