Portfolio Update

RNS Number : 4107K

NewRiver Retail Limited

30 July 2013

 



NewRiver Retail Limited

("NewRiver" or "the Company")

Portfolio update

Further to the Company's AGM announcement of 4 July 2013 NewRiver Retail Limited (AIM and CISX: NRR), the UK REIT specialising in value-creating retail property investment and active asset management, announces the following portfolio update for the period 1 April 2013 to date.

During the period the Company's asset management and risk-controlled development initiatives have progressed significantly across the portfolio in line with NewRiver's strategy. NewRiver acquired its twenty-fourth shopping centre and commenced construction work on its first major redevelopment at The Forum Centre, Wallsend.

Portfolio highlights:

Assets under management increased to a gross value of £440.1 million (31 March 2013: £390.1 million). NewRiver's own share of assets increased to £259.2 million (31 March 2013: £234.2 million).

Following the £50 million acquisition of Hillstreet Shopping Centre in Middlesbrough on 17 July 2013, the number of shopping centres under management has increased to 24 and the number of high street assets under management has remained stable. Assets under management now total 3.8 million sq ft which reflects a 0.4 million sq ft increase on the previous quarter.

Property metric highlights:

During the period the Weighted Average Lease Length to Expiry increased from 7.8 years to 8.3 years. The number of leases in the portfolio has increased significantly to 947 from a comparable 851. The Company's occupier mix remains highly attractive and lucrative with the cumulative rent roll being well-diversified across leading national retailers with strong covenants and with no single retailer accounting for more than 4.5% of total rent roll. The covenant strength of the Company's portfolio remains robust with well-established and profitable retailers such as Primark, Tesco, Wilkinson, New Look, TK Maxx, Boots, Poundland and Argos included within the top 10 retailers as measured by rental income which together account for just over 30% of total rent roll.

NewRiver completed 25 new lettings and lease renewals during the period, securing an annual rent roll of £329,000. New long term new lettings were secured at rental values of 5.4% ahead of ERV. NewRiver's rent collection overall was 0.4% ahead of forecast.

The Company's occupancy rate remains stable at 94% reflecting the strong retailer and occupier mix and the contribution of NewRiver's active asset management initiatives to attract and retain leading retailers.

Risk-Controlled Development:

The Forum Centre, Wallsend: Re-development now fully pre-let enabling construction works to commence

As part of NewRiver's risk-controlled development programme, the re-development of The Forum Shopping Centre in Wallsend has commenced following the pre-letting of all three new retail units. Construction works commenced on-site at the start of July to deliver a new 50,000 sq ft Community Centre, Library and new retail offering. The construction works are due to complete in October 2013 for partial handover of the retail units to all three retailers to allow for shop fit-outs to complete in time for Christmas trade. 

Pre-lets have been agreed with Home Bargains, Iceland and 99p Stores in addition to the Community Centre and Library pre-let to North Tyneside Council which was announced by the Company earlier this year.

NewRiver has signed a 10-year lease agreement with national supermarket Iceland at an annual rent of £125,000 for one of the three units comprising 9,300 sq ft.

The second new retail unit has been pre-let to 99p Stores on a 10-year lease agreement at an annual rent of £110,000 for a total of 7,000 sq ft.

The third unit, totalling 10,700 sq ft, has been pre-let to Home Bargains for a 10-year lease agreement at an annual rent of £125,000 as announced by the Company in April 2013.

The three retail pre-lets, totalling over 27,000 sq ft, account for a total gross rent of £360,000 pa and  combined with the 30-year lease agreement with North Tyneside Council for the new Community Centre and Library produce a total annual rent of £723,000 and mark NewRiver's first town regenerative re-development.

Primark to open in Golden Square, Warrington, Cheshire

Development and construction works to amalgamate two retail units at The Golden Square Shopping Centre in Warrington into a single 56,000 sq ft unit for Primark are at an advanced stage and ahead of schedule. NewRiver is set to hand over the new enlarged unit to Primark on 30 August 2013 which will then carry out its own shop fit out for an Autumn opening marking the introduction of its first store to this area of the north west of the UK.

The Piazza Shopping Centre, Paisley, Glasgow

Construction of a new 10,000 sq ft unit to be occupied by Iceland for a new 15-year lease at an annual rent of £135,000 in The Piazza Shopping Centre in Paisley is expected to complete on 30 August 2013. Iceland will carry out their shop-fit and are expected to open 12 weeks later in time for Christmas trade.

This is further to the Company's announcement earlier in the year for a 10-year lease agreement for an enlarged unit of 7,500 sq ft for leading value-retailer Poundland at an annual rent of £115,000 after NewRiver relocated Carphone Warehouse to a vacant unit within the Centre on extended lease terms.

Active asset management:

New letting agreed with leading value retailer 99p Stores

NewRiver has completed a new letting with national value retailer 99p Stores at Albert Square Shopping Centre, Widnes.

Following the successful award of planning consent to NewRiver in May 2013 to redevelop the vacant public house at the Albert Square Shopping Centre, the Company has pre-let the new 10,000 sq ft unit to 99p Stores for a term of 10 years at an annual rent of £135,000. The tender for works at Albert Square will commence shortly with construction expected to begin at the end of the year with handover to 99p Stores in Q2 2014.

Significant lease agreements signed with Burger King, Home Bargains and Sports Direct at The Hildreds Shopping Centre, Skegness

NewRiver has signed a 15-year lease agreement with national food operator Burger King at its centre The Hildreds in Skegness for a 4,500 sq ft unit at an initial annual rent of £70,000 including a turnover top-up provision and an annual step-rent of £75,000 for year five.

NewRiver has completed a new 15-year lease at an initial annual rent of £180,000 with Home Bargains which has relocated and is now trading from a larger unit within the centre having taken over the former 18,000 sq ft Co-Op unit. Reputed sports retailer Sport Direct has signed a lease to take the old Home Bargains unit, a total of 8,000 sq ft, until May 2024 at an annual rent of £140,000. 

Planning consent awarded and Nando's opens for trade at Regent Court, Leamington Spa

NewRiver has successfully secured A3 planning consent to provide for a greater food and restaurant use at its Regent Court shopping centre in Leamington Spa in line with its strategy to re-position the centre as a prime food and drink destination in response to the high level of demand from restaurant operators.

Regent Court was one of five centres acquired by NewRiver in December 2012 as part of its joint venture with LVS. In only six months since NewRiver acquired the centre, the Company secured a pre-let to Nando's at an annual rent of £70,000 on a 15 year lease for a total of 3,200 sq ft. Following completion of the amalgamation works by NewRiver Retail Nando's opened on 10 July 2013 and has experienced strong trade. The swift new letting and opening demonstrates the Company's ability to efficiently enhance the value of its assets.

NewRiver is in advanced legal discussions with three other leading national restaurant operators to move to Regent Court alongside the centre's existing restaurants which include Wagamama, Strada and Starbucks. 

Ladbrokes at The Horsefair, Wisbech, Cambridgeshire

NewRiver have signed a 10-year lease agreement with leading bookmaker Ladbrokes at an annual rent of £20,000 for an 800 sq ft unit.

Lease Renewal at The Promenades, Bridlington

NewRiver has renewed its lease with Bon Marche at an annual rent of £53,000 until June 2014.

New Letting at Templars Square Shopping Centre, Cowley

NewRiver has secured a new letting at Templars Square in Cowley attracting bookmaker Betfred to the centre in Oxford. Betfred has signed a 10-year lease for a 2,000 sq ft unit at an annual rent of £34,000. The bookmaker is currently on-site fitting out the unit and is due to open at the end of July 2013.

New lettings at the Prospect centre, Hull

NewRiver has secured two new lettings at its centre in Hull as part of its active management strategy. Eskimoo, ice cream and frozen yoghurt operator, has taken a 1,450 sq ft unit on a five-year lease at an annual rent of £28,750 while Hope Hospice is to move into a 1,400 sq ft unit, paying annual rent of £31,000 for the first two years.

Commercialisation & Marketing

The Company has had an active period of commercialisation and marketing across the portfolio with new events, promotions, community exhibitions and initiatives with educational institutions locally.

Further to the recent installation of free wi-fi across the portfolio with BSKYB's The Cloud, NewRiver is exploring new digital and multi-channel opportunities for the benefit of the full portfolio, its retailers and customers. NewRiver expects to exceed its commercialisation income target for the quarter. The Company has developed a new Brand Partnership Programme which is progressing well and received acclaim from recent wins and shortlistings at Shopping Centre Magazine's SCEPTRE Awards and the BCSC Opal Awards respectively.

Allan Lockhart, Property Director at NewRiver Retail, said:

"We have had an excellent start to the financial year delivering on our commitment to driving long-term value for our shareholders through our intense asset management, smart acquisition and risk-controlled development. We are delighted to have begun construction works on our largest re-development project to date to create the Wallsend Community Centre, Library and additional retail units all of which are fully pre-let.

Our acquisition of the Hillstreet Shopping Centre in Middlesbrough this month offers excellent new asset management opportunities which we are already progressing well.

We have had a healthy level of leasing activity during the period, maintaining a good occupancy rate and are pleased to see great demand for space across our portfolio as consumer confidence builds and retail operators report on-going resilience."

-Ends-

For further information

NewRiver Retail Limited  David Lockhart, Chief Executive Mark Davies, Finance Director	Tel: [phone]
Pelham Bell Pottinger David Rydell/Guy Scarborough/Charlotte Offredi	Tel: [phone]
Cenkos Securities Ian Soanes/Max Hartley	Tel: [phone]
Liberum Capital Shane Le Prevost/Tim Graham	Tel: [phone]

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 fourth largest Shopping Centre owner by number with assets under management of £440 million comprising 24 UK wide shopping centres, 16 high street retail units and two supermarkets. The portfolio has in excess of 900 occupiers, a total of 3.8 million square feet, total annual footfall of over 95 million and an occupancy rate of 94 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 and Channel Islands Stock Exchange (CISX) in September of the same year. For more information on NewRiver, please visit www.nrr.co.uk

LVS is advised or managed by Pacific Investment Management Company LLC.

 

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