New River REIT paying a special dividend as earnings rise by 16%: Over the year to the end of March 2017, Recent Factsheet EPRA NAV slipped by 1% to 292p. The second half of their accounting year was better for them than the first. EPRA earnings per share were 23.6p – up 16% on last year’s figure. This was based on net property income of £89.7m, up 33%. The full year dividend is up 8% to 20p and they are also planning to pay a 3p special dividend. The first quarterly dividend for the new accounting year is 5.25p (up 5% on last year’s figure).
Bought:£158m worth of property including a major shopping centre in Bexleyheath, South East London; a retail park in Dumfries and a retail warehouse in Sheffield. This helped take assets under management to £1.3bn. The fall-out from the referendum vote on the open-ended property sector might be evident in the Sheffield deal. In September 2016, they say that they moved quickly to acquire a retail warehouse in Sheffield from an open-ended property fund for GBP18 million. As they completed the acquisition, they exchanged contracts with the occupier to accept a surrender premium of up to GBP12.25 million by May 2017, meaning that in essence New River REIT bought a 110,000 sq ft prominently located retail warehouse on an 11 acre site for a net price of GBP6 million. In March 2017, having moved into advanced negotiations with a number of potential occupiers and purchasers, they requested and received the surrender premium, having received rent in the interim, the majority of which is being used to fund the 3p special dividend. This asset has been independently valued at 50% more than their net purchase price.
Occupancy: Across the portfolio, they got occupancy up by 1% to 97%, completing more than 300 new lettings and renewals. Long term deals completed on terms 3.9% ahead of ERV. They think though that their properties are affordable, at GBP12.45 psf on average. they also point out that draft rateable values (for business rates) across their retail portfolio in England, Scotland and Wales fell by over 19% on average and the pub operators should save, on average, 40% on business rates from 1 April 2017.
On the development side: they have pre-let 49% of the retail and leisure space at their 465,000 sq ft regeneration project in Burgess Hill. They hope to be in a position to start on site later in the summer. They have also agreed terms with a residential investment company for a significant pre-sale of the residential element of the development. In November 2016 they received planning consent at Canvey Island for a 62,000 sq ft retail park which is already 52% pre-let. In the same month they also submitted the planning application for a 236,000 sq ft mixed-use regeneration in Cowley, Oxford. Their current development commitment is modest, with 26,000 sq ft under construction all of which is pre-let.
LTV: was 37% at 31 March 2017, up from 27% at March 2016 predominantly due to the acquisition of the assets in Bexleyheath which completed in April 2016. Interest cover is 4.5x and the weighted average cost of debt was 3.5%, down from 3.7% in March 2016.
NRR : New River REIT paying a special dividend as earnings rise by 16%