NewRiver: retail at “best position it’s been in for several years”
The chief executive of NewRiver has said that the retail sector is “arguably in the best position it’s been in for several years”.
Allan Lockhart said a wave of corporate restructurings and the successful repositioning of many retailers had created a healthy operating environment. He added that this was supported by the increased market share of omnichannel retailers, with physical retail playing a central role.
This comes as the real estate investment trust (REIT) releases its full year results for the year ending 31 March, a period during which it returned to profit. NewRiver recorded a post-tax profit of £3m, up from a loss of £16.8m the previous year.
During the year, the REIT completed 785,100 sq ft of leasing, bringing its occupancy to a record 98%, up from 96.7% the previous year. NewRiver said its long-term transactions were 3.6% higher than estimated rental value and 1.8% higher than previous rent.
The REIT also recorded a tenant retention rate of 94%, up from 92% in the 2023 financial year. Across its assets, rent was an average of £11.82 per sq ft.
NewRiver also saw its asset management fee income from its capital partnerships increase by £1.0m year-on-year to £2.5m, with the key driver being a mandate from M&G Real Estate, beginning in the fourth quarter of the 2023 financial year.
In the last financial year, the REIT also launched a search for a new capital partner as it looks to target UK retail parks. NewRiver said early engagement has been “positive”.
Following some disposals, NewRiver’s core portfolio now accounts for 93% of its total portfolio, up from 88% in March 2023.
Allan Lockhart said: “Our retail portfolio, which demonstrated valuation stability in the second half of the year, is ideally positioned to benefit from consumers increasingly seeking value and convenience. The implementation of strategic key decisions over the last four years has reshaped our business, and we are entering an exciting time as we progress from resilience to sustainable growth. We have also continued to invest into our specialist asset management platform, meaning we are well placed to ramp up our Capital Partnerships activities, supported by our strong cash and liquidity position.”
Earlier this year, Allan Lockhart said the REIT’s occupational market was in its best shape in five years.