NewRiver REIT PLC (LSE:NRR) shared some promising financials in the retail and leisure-focused investment trust’s third-quarter trading update, bolstered by strong Christmas trading performance of many of the leading retailers in its portfolio, notably Sainsbury's, M&S, JD Sports and Poundland.
Retail occupancy increased by 20 basis points to 96.5% over the quarter, while rent collections came to 97% for the trailing nine months. Collections for the fourth quarter are trending in line with expectations.
NewRiver has a fully hedged debt position with no maturities due until 2028 and a loan-to-value ratio of 34%.
As part of the REIT’s capital-light strategy, NewRiver was appointed by M&G Real Estate to manage a retail portfolio including 16 retail parks and one shopping centre in the UK with zero capital requirements under the agreement.
NewRiver’s trading update “show continued resilience of its business model”, said analysts at 'house' broker Liberum.
The Liberum analysts noted a 30% spot discount to net tangible assets against an industry average of 16%, producing a 6.9% fully covered dividend yield, “one of the most attractive in the sector”.
“The sixth consecutive quarter of leasing outperformance and the further reduction in vacancy shows both robust occupational demand and the benefit of NRR’s focus on asset management despite a challenging economic Backdrop,” they concluded.
Ratings company Fitch reaffirmed NewRiver’s investment-grade credit rating.
New River shares rose 3% to 92.90p on Thursday afternoon in response to the trading update.