First Quarter Company Update

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 million1 and EBITDA was £1.1 million1
●	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 million2

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; 5th 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				[phone]
Allan Lockhart (Chief Executive) Will Hobman (Chief Financial Officer)

FTI Consulting				[phone]
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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