Portfolio Update

RNS Number : 0412Q

NewRiver Retail Limited

09 October 2013

 



NewRiver Retail Limited

("NewRiver" or "the Company")

Portfolio update

NewRiver Retail Limited (AIM: NRR), the UK REIT specialising in value-creating retail property investment and active asset management, announces the following portfolio update for the period 1 July to 30 September 2013.

The Company has now entered its close period and will announce its Interim Results for the period ended 30 September 2013 on 28 November 2013.

During the period the Company's asset management and risk-controlled development initiatives have continued to progress significantly across the portfolio. Notably, NewRiver successfully completed 23 leasing events and increased the total portfolio occupancy to 95%.

Portfolio highlights

§ Increased the number of leases in the portfolio from 947 to 955

§ Completed 23 new leasing events reflecting additional total rental income of £946,000 pa, approximately 10.4% above valuation ERV

§ Rent roll under management increased by 2.8% to £42.358 million

§ Increased the average new lease length to 11.3 years

§ Improvement to retail portfolio occupancy from 94% to 95%

§ Weighted Average Lease Expiry ("WALE") stable at 8.1 years

§ Attractive average rent of £10.60 per sq ft

Active asset management:

Regent Court, Leamington Spa, Warwickshire

NewRiver's significant re-positioning of Regent Court as a restaurant and leisure destination continues to progress well. The Company has secured planning consent for the Centre to be the principal restaurant and leisure destination in the town and believes it will benefit from increasing operator demand in the next phase of letting opportunities.

The Company signed a new 15-year lease with national restaurant operator Turtle Bay at a rent of £107,000 pa. Construction works will begin imminently, with Turtle Bay expected to take possession in mid-November.

A number of other national restaurant operators are in advanced legal negotiations to occupy space within the Centre. Existing operators include Nandos, Wagamama, Strada and Prezzo. Importantly, alongside the letting to Turtle Bay, the void rate has reduced from 13.5% at the time of purchase in December 2012 to 4% demonstrating NewRiver's effective asset management strategy.

The Hildreds Shopping Centre, Skegness, Lincolnshire

The Company signed a new letting agreement with restaurant operator Burger King for a new 15-year term at a stepped rent to £75,000 pa together with a turnover top up rent.

NewRiver continued to increase the retail offering within the Centre with the opening of a new 8,000 sq ft store let to leading sports retailer Sports Direct.

In addition the Company has renewed its lease with Everything Everywhere at an annual rent of £49,380 pa until December 2022 and Phones 4 U at £30,000 pa until September 2018. A number of lease renewals within the Centre are in advanced legal negations and anticipated to complete in the coming months.

Merlins Walk, Carmarthen, Wales

NewRiver has signed a new 10-year lease with leading value-retailer Poundland at £135,000 pa. As part of the agreement, Poundland will expand its existing store into an adjacent vacant unit which will double the size of its store to 10,800 sq ft over two floors.   

A new 10-year lease has also been completed with Card Centre at an annual rent of £30,000 pa.

Market Place, Romford, Havering

NewRiver signed a conditional lease agreement with Lewis's Home retail Group, trading as T J Hughes, for a new 15-year term at a rent of £275,000 pa.

Newlands Shopping Centre, Witham, Essex

Peacocks, the value fashion retailer, has agreed to a 14% pa rental increase in order to secure longer term certainty at the Newlands Shopping Centre, but still allowing NewRiver the flexibility to re-model and enhance the asset as development plans progress.

Risk-controlled development:

The Forum Centre, Wallsend, North Tyneside

As part of its risk-controlled development programme, NewRiver has commenced construction works at the Centre following the pre-letting of all three new retail units.

The extensive construction works and handover of the three retail units is anticipated for late October 2013 to allow for shop fit-outs to be completed in time for Christmas trading. North Tyneside Council is anticipated to take possession of the fully fitted new library and Community First Centre in January 2014. The development is expected to be completed on time and within budget.

In addition to the extensive redevelopment, two new retailers Urban and Accessories took occupation in August and a mall café, Mister Woods, opened in September. A further three new lettings are expected to complete in the coming weeks.

A further programme of improvement works to the Centre is currently underway to complement the significant refurbishment of the external walkways, canopies and entrances with completion scheduled for late October 2013.

Packhorse Shopping Centre, Huddersfield, West Yorkshire

In line with the Company's risk-controlled development programme, it has submitted a planning application to Kirklees Council for proposed works amounting to a value of c. £1.5 million. The works include significant improvements to all three entrances to the Centre, a 180 seat Packhorse Kitchen featuring 6 food and beverage brands from Huddersfield, a new anchor store of c. 15,000 sq ft and a new bar/restaurant fronting Kirkgate.

The Piazza Shopping Centre, Paisley, Glasgow

The new 10,000 sq ft unit to be occupied by Iceland on a 15-year lease at an annual rent of £135,000 was handed to Iceland on 26 August. Iceland is currently fitting out the unit and scheduled to open in late October 2013. Only one unit remains unoccupied in the centre.

Primark, Warrington, Cheshire

NewRiver has completed the development and construction works for leading fashion retailer Primark for a new 56,000 sq ft at Golden Square Shopping Centre in Warrington. Primark is currently fitting out the unit with trading anticipated to commence in December 2013 marking the introduction of its first store to this area of northwest England.

Commercialisation

NewRiver continues to grow and enhance its commercialisation revenue across the portfolio with net income of £250,000 in Q1 exceeding management forecast by 38% and the Company is confident of further growth in Q2 and for the remainder of the financial year with opportunities to leverage the Company's scale and relationships.

Corporate Social Responsibility

NewRiver recently signed leases with East Street Arts and Castlefield Galleries who are part funded by the Arts Council England. The leases enable local arts groups including artists, musicians and performing arts, to open up previously vacant space in town centres at minimal cost. The Company intends to expand this relationship more widely across its portfolio, working with local Councils to increase use of the high streets and drive footfall to its centres.

Allan Lockhart, Property Director at NewRiver Retail, said:

"We have continued to build on the strong start to the financial year and achieved significant progress on a number of initiatives across the portfolio. Importantly NewRiver has agreed a number of new lease agreements which now total 50 lettings and renewals since 1 April 2013, leading to increased occupancy across our centres."

The Company's extensive risk-controlled development programme continues to make impressive progress and we look forward to the continuing growth and improvement of our diverse asset portfolio."

-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 Max Hartley/Ian Soanes	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 950 occupiers, a total of 3.8 million square feet, total annual footfall of over 95 million and an occupancy rate of 95 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 in September of the same year. For more information on NewRiver, please visit www.nrr.co.uk

 

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