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NewRiver REIT plc completed the acquisition of Capital & Regional for £151m in December 2024, increasing its portfolio size by 65% to £0.9bn. Following the acquisition, NewRiver repaid £59m across three of Capital & Regional's secured debt facilities, leaving NewRiver with £444m gross debt. The combined portfolio reported 96% occupancy, with NewRiver standalone occupancy at 98%, and total Assets Under Management reached £2.5bn.
| Date | 29 Jan 2025 |
| Time | 07:00:04 |
| Category | Corporate updates |
| ID | 0273V |
NewRiver REIT plc
("NewRiver" or the "Company")
Third Quarter Company Update
Increased scale and strong trading period underpin positive outlook
Allan Lockhart, Chief Executive, commented: "We had a successful third quarter, with the key highlight being the completion of the transformational acquisition of Capital & Regional Plc in December, which provided increased scale and will deliver significant future benefits, including a material increase in our earnings and dividends. The newly combined portfolio remains focused on providing essential goods and services to UK consumers and is performing well, with tenant sales at our assets significantly outperforming the UK average. As a consequence of this, our operational metrics remain strong, with rents on new leases exceeding previous levels and occupancy increased to 98% in the NewRiver portfolio, and at 96% across the newly combined portfolio.
We are moving at pace with the integration of the Capital & Regional business to deliver the synergies outlined at the time of the acquisition which, with the portfolio performing well and growth from capital partnerships, mean we are well positioned to deliver sector leading returns over both the short and the medium term."
Capital & Regional acquisition delivers scale, material earnings accretion and opportunities to add value
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In December 2024 NewRiver completed the acquisition of Capital & Regional for £151m, funded through a combination of cash and shares; pricing implies a discount to Net Assets of 14% based on £350m1 portfolio valuation |
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The acquisition increased the size of NewRiver's portfolio by 65% to create a £0.9bn2 portfolio through the combination of high-quality, complementary assets with similarly low-risk tenant profile and attractive income characteristics |
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Expected to deliver mid-to high-teens accretion to UFFO per share by unlocking approximately £6.2m of annual cost synergies; to be unlocked within 12 months of completion on an annualised basis, with excellent progress already made since completion |
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Immediately post completion, the Group repaid three of Capital & Regional's secured debt facilities totalling £59m with a blended cost of 6.1%, leaving NewRiver with £444m of gross debt with a blended cost of 3.5% |
Spend outperformance and year-on-year growth in Christmas trading period3
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NewRiver's occupiers experienced strong in-store spending through the Christmas period, demonstrating we own the right assets, in the right locations |
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Total in-store spend growth within the NewRiver portfolio was +5.3% year-on-year in the three months to December |
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Significant spend outperformance of 2.5 times relative to the UK average growth in retail and supermarket spend of +2.0% |
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Best performing sub-sectors were Discount and Value, Opticians, Health and Beauty, Home, F&B and Leisure |
Strong operational metrics underpinning future growth
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Combined portfolio occupancy of 96%, NewRiver standalone occupancy of 98% vs NewRiver standalone of 97% at 30 September 2024 |
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261,800 sq ft of new lettings and renewals completed in Q3 across the combined portfolio; long-term transactions at average 6.4% premium to ERV and 13.6% premium to previous rent |
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Year to date in FY25, including Capital & Regional assets in Q3 only, we have completed 668,200 sq ft of leasing transactions; long-term transactions at average 5.7% premium to ERV and 5.7% premium to previous rent |
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Capital Partnerships expanded further in Q3: appointed to manage Plough Lane Retail Park in Wimbledon, taking the total number of assets managed on behalf of M&G Real Estate to 17 retail parks and two shopping centres; in addition awarded a new public sector mandate meaning we now manage 22 shopping centres and 18 retail parks on behalf of Capital Partners, taking our total Assets Under Management to £2.5bn |
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NewRiver commissioned Knight Frank, which values the majority of NewRiver's existing portfolio, to conduct an external valuation of the Capital & Regional portfolio in accordance with the latest version of the RICS Valuation - Global Standards, (the "Red Book"), as part of its acquisition due diligence |
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Proforma for acquisition of Capital & Regional which completed on 10 December 2024, using Knight Frank valuation of Capital & Regional portfolio at 30 June 2024 of £350m |
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NewRiver analysis, informed by Lloyds Bank data on customer spend representing 75% of the portfolio by value. Christmas period includes the 3 months to December |
For further information
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NewRiver REIT plc |
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+44 (0)20 3328 5800 |
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Allan Lockhart (Chief Executive) Will Hobman (Chief Financial Officer) |
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FTI Consulting |
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+44 (0)20 3727 1000 |
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Dido Laurimore Giles Barrie |
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About NewRiver
NewRiver REIT plc ('NewRiver') is a leading Real Estate Investment Trust specialising in buying, managing and developing resilient retail assets throughout the UK.
Following the completion of its acquisition of Capital & Regional in December 2024, NewRiver has a £0.9 billion UK wide portfolio covering 8.2 million sq ft, comprising 28 community shopping centres and 13 conveniently located retail parks occupied by tenants predominately focused on essential goods and services. In addition, we manage 22 shopping centres and 18 retail parks on behalf of Capital Partners, taking our total Assets Under Management to £2.5 billion. Our objective is to own and manage the most resilient retail portfolio in the UK, focused on retail parks, core shopping centres, and regeneration opportunities to deliver long-term attractive recurring income returns and capital growth for our shareholders.
NewRiver is listed on the Equity shares (commercial companies) category of the Main Market of the London Stock Exchange (ticker: NRR). Visit www.nrr.co.uk for further information.
LEI Number: 2138004GX1VAUMH66L31
Forward-looking statements
The information in this announcement may include forward-looking statements, which are based on current projections about future events. These forward-looking statements reflect the directors' beliefs and expectations and are subject to risks, uncertainties and assumptions about NewRiver REIT plc (the 'Company'), including, amongst other things, the development of its business, trends in its operating environment, returns on investment and future capital expenditure and acquisitions, that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statements.
None of the future projections, expectations, estimates or prospects in this announcement should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects have been prepared are correct or exhaustive or, in the case of the assumptions, fully stated in the announcement. As a result, you are cautioned not to place reliance on such forward-looking statements as a prediction of actual results or otherwise. The information and opinions contained in this announcement are provided as at the date of this document and are subject to change without notice. No one undertakes to update publicly or revise any such forward looking statements. No statement in this announcement is or is intended to be a profit forecast or profit estimate or to imply that the earnings of the Company for the current or future financial years will necessarily match or exceed the historical or published earnings of the Company.