AGM Statement

RNS Number : 6533P

NewRiver Retail Limited

21 July 2010

 



NewRiver Retail Limited ("NewRiver" or "the Company")

AGM and Trading Update Statement

At today's Annual General Meeting of NewRiver Retail Limited, the specialist value-creating retail property investment and asset management company, the Company will make the following statement:

"As stated in the financial results of 15 June 2010, trading for the current period has started well, and the Company has continued to build upon the strategic initiatives put into place at the time of admission in September 2009.

NewRiver has been established as a specialist real estate investor and asset manager to take advantage of opportunities in the next cycle of the UK retail property sector. It creates value through active and entrepreneurial asset management and risk-controlled development, utilising both its own balance sheet and co-investment joint venture structures. Commercial property has become a global asset class and the Board believes that as the economy starts to recover, investors will increasingly seek to identify 'best of class' sector focused asset managers. NewRiver's investment platform concentrates solely on the UK retail property sector, with particular emphasis on the food and value sub-sectors. NewRiver has capitalised on the falls in capital and rental values that occurred during the recent downturn and continues to identify opportunities where its investment managers' opportunistic and entrepreneurial asset management and development skills create added value and generate returns for shareholders.

The Company passionately believes it is in the vanguard of the next generation of property companies: sector specialists with proven asset management skills. Investors are increasingly seeking specialist operators that can deliver out performance. The decision to focus on the retail sector was taken not least because of the skills and extensive experience of the management team but also because it is the largest sector, genuinely operates across the UK, and has performed favourably against other property classes over the long term.  In addition the retail sector allows landlords to develop long term relationships with the occupiers and is the most dynamic as retailers constantly seek to win market share through changing formats and customer offer.

Since inception, the Company has been very active and I am pleased to report a number of advances since the end of the financial year. In May we raised an additional £10.5 million to capitalise the joint venture with Morgan Stanley Real Estate Investing ("MSREI") and further strengthen the balance sheet. In June we announced the acquisition of the REDEVCO portfolio of UK retail assets for just over £19 million, closely followed by the acquisition of 49/53 Northumberland Street for £4.2 million.

Importantly, the Company's portfolio is performing strongly and continues to benefit from the skills of the investment managers' entrepreneurial asset management approach. In total some 18 properties have been acquired in five separate transactions, with spending of approximately £84 million, £49 million of which was in the joint venture with MSREI. Total floor area under management is now in excess of 800,000 sq ft and the total portfolio enjoys a very low void rate of just 3.2%.  The void rate falls to just under 0.6% for the wholly owned portfolio (ie those not held in the joint venture with MSREI). The total portfolio's weighted average lease length is a healthy 8.7 years when including the joint venture, which increases to 11.7 years for on balance sheet assets.

The quality of tenant mix is excellent, with more than 90% of passing rental income now being generated from strong covenant national retailers.  The top ten tenants by rental income are now, in ascending order, Wilkinsons, TJ Hughes, Sainsburys, Tesco, New Look, The Co-op, Peacocks, Bank Fashion, H Samuel and Argos. In line with NewRiver's stated strategy of focusing on the value and food sub sectors, the majority of revenue - some 72% - is derived from value and food retailing.

The Company believes its tenant profile represents a diverse, highly resilient and secure income stream generated from long term well financed businesses. In line with its UK wide strategy, the portfolio is UK-wide but weighted towards affluent conurbations. The south east of England and Greater London areas represent 39% with 7% in the East of England. All of the assets have been acquired at a blended net initial yield of 8.6% and with a current average cost of borrowing of circa. 4%, the portfolio is highly cash generative. This reflects the very strong buying skills of its investment managers.

The Board is committed to a progressive dividend policy which it intends to implement as soon as possible.

In accordance with the expanding portfolio the NewRiver Capital Limited team has grown from two to 11, including a number of senior professional management appointments, all of whom have extensive experience and knowledge of the UK retail property markets. The investment manager team is led by David Lockhart, the respected founder of Halladale Group and supported by Allan Lockhart, Mark Davies, Nick Sewell and Nick Scott.

NewRiver raised initial capital of £25 million on Admission and stated its intention to return to investors for future capital to accelerate the growth of the business. The Company returned to the market in May 2010, shortly after the period end, raising a further £10.5 million and will seek further capital raising opportunities in due course.

A number of key objectives have been met since NewRiver's creation in September 2009 and we are building on the considerable momentum achieved. The start to the new financial year has been encouraging. The Board looks forward to the future with confidence.

-ends-

For further details contact:

NewRiver Retail Limited

Serena Tremlett                                                                                  Tel: [phone]

NewRiver Capital Limited                                                  

David Lockhart                                                                                    Tel: [phone]

Cenkos Securities                                                                           

Ian Soanes

Max Hartley                                                                                         Tel: [phone]

Pelham Bell Pottinger                                                                      Tel: [phone]

David Rydell

Rosanne Perry

About NewRiver

NewRiver Retail Limited is a specialist real estate investor and asset manager with a particular focus on the UK retail sector. NewRiver Retail is advised on property matters by its wholly-owned subsidiary, NewRiver Capital Limited, whose management team, led by David Lockhart, have more than 50 years' combined experience in UK commercial property markets. 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. It is NewRiver's intention to become one of the leading sector-focused value-creating property investment businesses operating in the UK retail sector. The Company was founded in 2009 and its 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.newriverretail.com and

www.newrivercapital.co.uk 

 

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