First Quarter Company Update

NewRiver REIT plc

("NewRiver" or the "Company")

First Quarter Company Update

NewRiver will hold its Annual General Meeting ("AGM") at 10:00am today and is providing the following trading update in respect of the first quarter ended 30 June 2021.

Allan Lockhart, Chief Executive, commented: "Our operational metrics including rent collection, leasing activity and occupancy have remained strong throughout the first quarter and, most significantly, the Company has agreed terms to dispose of its Hawthorn pub business, which delivers on a key strategic priority announced in April 2021."

Disposal of Hawthorn

On 26 July 2021, we announced that we had entered into an agreement for the sale of Hawthorn to a member of the Admiral Taverns group, a wet-led community pub operator, in line with our strategic priority to divest ourselves of our community pub business in order to reset our LTV and provide the firepower to reshape our portfolio.

The expected total cash proceeds arising from the disposal are £222.3 million. Net aggregate proceeds are intended to be used to reduce net debt, significantly strengthening NewRiver's balance sheet by resetting LTV to below 40% on a 31 March 2021 pro-forma basis, which is in line with Company guidance. The disposal of Hawthorn, once completed, will enable the majority of future proceeds from non-core retail disposals, of which we currently have £73 million exchanged or under offer, to be recycled into resilient retail assets and NewRiver's regeneration portfolio which offer superior income and capital growth opportunities.

For further details, please see the separate announcement released on 26 July 2021.

Retail rent collection

Our rent collection figures remain robust, reflecting the affordability of our rents and our strong relationships with occupiers. These attributes mean that we have seen very little impact across our portfolio from the extension of the government's moratorium on commercial rents until March 2022. The vast majority of our occupiers are making rental payments in accordance with their original lease terms or deferral agreements.

Since our Full Year Results on 3 June 2021 rent collected or alternative payment terms agreed in relation to the first quarter of the financial year has now increased to 87%.

Of the total second quarter rent demanded so far, 79% has either been collected or had alternative payment terms agreed with occupiers. The rent collection figures for the first and second quarters are tracking ahead of the same quarters last year and we expect these figures to continue to improve as we progress through the year.

Rent collection by quarter, at 20 July 2021

Retail operational performance

Almost all of the stores across our retail portfolio are now open following the easing of restrictions and footfall is recovering well. This mirrors trends across the UK where customers have been making increasingly confident returns to physical stores since the reopening of non-essential retail on 12 April. Our portfolio remains focused on essential, local retail with limited exposure to mid-market fashion and no department stores.

In FY22 to date we have maintained our strong leasing momentum from the previous financial year, completing 252,500 sq ft of leasing deals across our retail portfolio. 92,200 sq ft of the deals signed to date represented long-term new lettings and renewals, accounting for £0.9 million of annualised rent. Long-term deals agreed so far in FY22 are on terms in line with ERV. These transactions include a significant lease renewal with Homebase in Poole, a renewal with Superdrug in Doncaster and a new letting with Poundstretcher in Bexleyheath.

Across the retail portfolio, operational metrics have remained robust, with retail occupancy increasing over 1% to 97.0% since the March 2021 position. Our average retail rent remains affordable at £11.54 per sq ft (March 2021: £11.51 per sq ft).

During the quarter we completed a long-term portfolio agreement with APCOA, Europe's largest car parking solutions operator, to deliver their innovative urban mobility hub concept across external areas within our shopping centres and retail parks. This commercial partnership will reactivate under-utilised space, increase our ancillary revenue and improve customer experience by expanding the range of services available at our community centred retail assets. Additional revenue streams will be generated from a range of community focused projects including the provision of electric vehicle charging, cycle parks, multi-locker hubs for customers and local businesses, in car park car maintenance servicing and valeting, dark kitchens as well as many more innovative solutions.

In July 2021 we were notified that Grays town centre, the location of one of our key Regeneration shopping centres, has been awarded £19.9 million of central government investment via the Towns Fund. NewRiver is represented on the Thurrock (Grays) Towns Fund Board which works in partnership with the Local Authority to redevelop and repurpose the area in and around our community shopping centre. The funding should accelerate the transformation that is already underway in Grays, bringing significant social and economic benefits for its residents, businesses and visitors.

Disposal progress

Our strategy of disposing of non-core retail assets has continued, with £74.3 million of disposals now completed, exchanged or under offer in FY22 to date. This figure comprises £1.1 million of completed disposals, £9.3 million of exchanged, and £63.9 million under offer. These disposals are in line with March 2021 valuations.

The announced disposal of Hawthorn, once completed, will enable the majority of future proceeds from these non-core retail disposals to be redeployed into resilient retail assets.

Cash and liquidity

In light of an improved trading environment and increased confidence we made the decision to repay £70 million of revolving credit facilities during the quarter. At 30 June 2021, we had £84 million of cash reserves and £115 million of undrawn revolving credit facilities. Our total accessible liquidity position of £199 million remained the same as at year end.

For further information

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of the law of England and Wales by virtue of the European Union (Withdrawal) Act 2018. This announcement has been authorised for release by the Board of Directors.

About NewRiver

NewRiver REIT plc ('NewRiver') is a leading Real Estate Investment Trust specialising in buying, managing and developing essential retail and leisure assets throughout the UK.

Our £1.0 billion portfolio covers 9 million sq ft and comprises 33 community shopping centres, 19 conveniently located retail parks and 674 community pubs. We hand-picked our assets to deliberately focus on occupiers providing essential goods and services, and avoid structurally challenged sub-sectors such as department stores, mid-market fashion and casual dining. This focus, combined with our affordable rents and desirable locations, delivers sustainable and growing returns for our shareholders, while our active approach to asset management and inbuilt 2.6 million sq ft development pipeline provide further opportunities to extract value from our portfolio.

NewRiver has a Premium Listing on 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 industry, 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 document. 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 document 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.