NewRiver REIT has said it will look to sell assets after reporting a 23% fall in net asset value (NAV) for the year to 31 March 2020.

The company, which owns a portfolio of retail and pub assets, saw its EPRA NAV plummet to 201p per share from 261p last year.

The fall was driven by a 12.3% like-for-like decline in the value of its property portfolio, to £1.2bn, as the impact of covid-19 hit trading of a large portion of its portfolio.

Chief executive Allan Lockhart said the company’s top priorities for the coming year were to:

• work with occupiers to rebuild revenues as assets fully reopen;
• improve the loan to value (LTV), which now stands at 47% (March 2019: 37%) through asset disposals or change of use to more valuable asset classes;
• release value from its development pipeline.

Underlying funds from operations fell 5% to £52.1m or 17.0p per share. Following the decision not to pay a fourth quarter dividend, it declared dividends for the year of 16.2p (2019: 21.6p).

Operational performance

The group completed £172.8m of acquisitions (NewRiver share: £102.3m), reflecting a blended net initial yield of 9.5%. It sold £48.4m of assets, reflecting a blended net initial yield of 5.5% and a 1.5% discount to March 2019 valuation.

Occupancy at its retail portfolio was 94.8%, a slight fall from March 2019 of 95.2%. Pubs occupancy was 97.0% (March 2019: 97.9%).

It increased the average retail rent across its portfolio to £12.66 per sq ft (March 2019: £12.52 per sq ft), with 678,100 sq ft of retail lettings and renewals 1.2% ahead of previous passing rent.

Like-for-like EBITDA per pub was up 2.3% across its 720 community pubs.

Meanwhile, its development pipeline now stands at 2.5 million sq ft, including 0.9 million sq ft of planning consents.

NRR : NewRiver REIT to make disposals as NAV falls 23%