NewRiver: Occupational market in best shape in five years

18th January 2024 | Jack Oliver

NewRiver’s occupational market is in its best shape in five years, its chief executive Allan Lockhart has said.

This comes as the real estate investment trust (REIT) releases a company update for the third quarter of the 2024 financial year, a period during which it maintained its record occupancy rate of 97.9%.

During the quarter, NewRiver continued “strong” leasing performance, completing 222,900 sq ft of leasing transactions. Long-term transactions were up by 2.6% versus previous rent, and ahead of estimated rental value (ERV) by 1.6%.

In the financial year to date, the REIT has completed a total of 587,500 sq ft of leasing transactions, with long-term transactions 6.8% ahead of previous rent and 1.5% higher than ERV.

NewRiver’s other highlights for the third quarter include a leasing retention rate and rent collection rate both at 97%, and an average rent of £11.70 per sq ft.

The REIT also expanded its capital partnerships with M&G Real Estate after being appointed to manage an additional large retail park. This brings the total number of assets managed on behalf of M&G to 17 retail parks and two shopping centres.

Allan Lockhart said: “Our strong operational performance continued into the third quarter, reflecting that our occupational market is, in our opinion, in its best shape for five years. This view is endorsed by the Christmas trading results reported to date by NewRiver’s top 10 retailers, including B&M, M&S, Boots, Superdrug and Sainsburys, which have been excellent. The continued importance of the physical store is becoming increasingly clear to best-in-class retailers, be they omni-channel operators with a clear understanding of the role of the physical store in the fulfilment of online orders, or retailers operating right-sized store-based models.

“We delivered another quarter of positive leasing performance, a further expansion of our capital partnerships and have seen an increase in potential acquisition opportunities delivering attractive returns which we believe will be supportive of the future growth of our business. In the meantime, our activities continue to be underpinned by our clear strategy, well-positioned portfolio and the strength of our balance sheet.”

In November, NewRiver said it is looking to spend after building up a cash reserve of £138m. The REIT had also refinanced a £100m undrawn revolving credit facility to extend its maturity to November 2026 at a reduced cost.


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