REG - NewRiver REIT plc - Q3 Company Update

Newriver ReitAnnouncement

29/01/2025 07:00

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RNS Number : 0273V  NewRiver REIT PLC  29 January 2025

 

NewRiver REIT plc

("NewRiver" or the "Company")

 

Third Quarter Company Update

 

Increased scale and strong trading period underpin positive outlook

 

Allan Lockhart, Chief Executive, commented: "We had a successful third
quarter, with the key highlight being the completion of the transformational
acquisition of Capital & Regional Plc in December, which provided
increased scale and will deliver significant future benefits, including a
material increase in our earnings and dividends. The newly combined portfolio
remains focused on providing essential goods and services to UK consumers and
is performing well, with tenant sales at our assets significantly
outperforming the UK average. As a consequence of this, our operational
metrics remain strong, with rents on new leases exceeding previous levels and
occupancy increased to 98% in the NewRiver portfolio, and at 96% across the
newly combined portfolio.

 

We are moving at pace with the integration of the Capital & Regional
business to deliver the synergies outlined at the time of the acquisition
which, with the portfolio performing well and growth from capital
partnerships, mean we are well positioned to deliver sector leading returns
over both the short and the medium term."

 

Capital & Regional acquisition delivers scale, material earnings accretion
and opportunities to add value

 ●    In December 2024 NewRiver completed the acquisition of Capital & Regional
      for £151m, funded through a combination of cash and shares; pricing implies a
      discount to Net Assets of 14% based on £350m(1) portfolio valuation
 ●    The acquisition increased the size of NewRiver's portfolio by 65% to create a
      £0.9bn(2) portfolio through the combination of high-quality, complementary
      assets with similarly low-risk tenant profile and attractive income
      characteristics
 ●    Expected to deliver mid-to high-teens accretion to UFFO per share by unlocking
      approximately £6.2m of annual cost synergies; to be unlocked within 12 months
      of completion on an annualised basis, with excellent progress already made
      since completion
 ●    Immediately post completion, the Group repaid three of Capital &
      Regional's secured debt facilities totalling £59m with a blended cost of
      6.1%, leaving NewRiver with £444m of gross debt with a blended cost of 3.5%

 

Spend outperformance and year-on-year growth in Christmas trading period(3)

 ●    NewRiver's occupiers experienced strong in-store spending through the
      Christmas period, demonstrating we own the right assets, in the right
      locations
 ●    Total in-store spend growth within the NewRiver portfolio was +5.3%
      year-on-year in the three months to December
 ●    Significant spend outperformance of 2.5 times relative to the UK average
      growth in retail and supermarket spend of +2.0%
 ●    Best performing sub-sectors were Discount and Value, Opticians, Health and
      Beauty, Home, F&B and Leisure

 

Strong operational metrics underpinning future growth

 ●    Combined portfolio occupancy of 96%, NewRiver standalone occupancy of 98% vs
      NewRiver standalone of 97% at 30 September 2024
 ●    261,800 sq ft of new lettings and renewals completed in Q3 across the combined
      portfolio; long-term transactions at average 6.4% premium to ERV and 13.6%
      premium to previous rent
 ●    Year to date in FY25, including Capital & Regional assets in Q3 only, we
      have completed 668,200 sq ft of leasing transactions; long-term transactions
      at average 5.7% premium to ERV and 5.7% premium to previous rent
 ●    Capital Partnerships expanded further in Q3: appointed to manage Plough Lane
      Retail Park in Wimbledon, taking the total number of assets managed on behalf
      of M&G Real Estate to 17 retail parks and two shopping centres; in
      addition awarded a new public sector mandate meaning we now manage 22 shopping
      centres and 18 retail parks on behalf of Capital Partners, taking our total
      Assets Under Management to £2.5bn

 

 1.                  NewRiver commissioned Knight Frank, which values the majority of NewRiver's
                     existing portfolio, to conduct an external valuation of the Capital &
                     Regional portfolio in accordance with the latest version of the RICS Valuation
                     - Global Standards, (the "Red Book"), as part of its acquisition due diligence
 2.                  Proforma for acquisition of Capital & Regional which completed on 10
                     December 2024, using Knight Frank valuation of Capital & Regional
                     portfolio at 30 June 2024 of £350m
 3.                  NewRiver analysis, informed by Lloyds Bank data on customer spend representing
                     75% of the portfolio by value. Christmas period includes the 3 months to
                     December

 

 

 

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.

 

Following the completion of its acquisition of Capital & Regional in
December 2024, NewRiver has a £0.9 billion UK wide portfolio covering 8.2
million sq ft, comprising 28 community shopping centres and 13 conveniently
located retail parks occupied by tenants predominately focused on essential
goods and services. In addition, we manage 22 shopping centres and 18 retail
parks on behalf of Capital Partners, taking our total Assets Under Management
to £2.5 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 to deliver long-term attractive recurring
income returns and capital growth for our shareholders.

 

NewRiver is listed on the Equity shares (commercial companies) category of the
Main Market of the London Stock Exchange (ticker: NRR). Visit www.nrr.co.uk
for further information.

 

LEI Number: 2138004GX1VAUMH66L31

 

Forward-looking statements

 

The information in this announcement may include forward-looking statements,
which are based on current projections about future events. These
forward-looking statements reflect the directors' beliefs and expectations and
are subject to risks, uncertainties and assumptions about NewRiver REIT plc
(the 'Company'), including, amongst other things, the development of its
business, trends in its operating environment, returns on investment and
future capital expenditure and acquisitions, that could cause actual results
and performance to differ materially from any expected future results or
performance expressed or implied by the forward-looking statements.

 

None of the future projections, expectations, estimates or prospects in this
announcement should be taken as forecasts or promises nor should they be taken
as implying any indication, assurance or guarantee that the assumptions on
which such future projections, expectations, estimates or prospects have been
prepared are correct or exhaustive or, in the case of the assumptions, fully
stated in the announcement. As a result, you are cautioned not to place
reliance on such forward-looking statements as a prediction of actual results
or otherwise. The information and opinions contained in this announcement are
provided as at the date of this document and are subject to change without
notice. No one undertakes to update publicly or revise any such forward
looking statements. No statement in this announcement is or is intended to be
a profit forecast or profit estimate or to imply that the earnings of the
Company for the current or future financial years will necessarily match or
exceed the historical or published earnings of the Company.

 

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