In its third quarter update, NewRiver – the UK REIT and pub owner – has said the business is in good shape despite continued macro uncertainty.
The group said it has surrendered the leaseback agreement on 21 pubs with Marston’s, which were due to expire in December 2017, and agreed new 15 year RPI linked leases with Marston’s.
It also revealed pub operators across its portfolio would save on average 37% on business rates from 1 April 2017 when the business rate relief threshold rises from £6,000 to £12,000.
In its shopping centre portfolio footfall fell 0.8% on a like-for-like basis to 39 million, but still outperformed the UK benchmark by 200bps. It said footfall was particularly strong at The Forum Shopping Centre, Wallsend, where like-for-like footfall was up 21% following the opening of a new 18,500 sq ft Aldi and 1,450 sq ft Burger King in the period.
Chief executive David Lockhart said: “Against a backdrop of continued macro uncertainty, we remain focused on generating sustainable income returns from our well placed convenience-led portfolio. I am pleased to report that we have once again delivered an increased dividend to our shareholders, with the third quarter dividend up by over 5% and the dividend for the financial year to date up by over 9%. Our underlying business is in good shape, as demonstrated by the operational metrics across our portfolio, with retail occupancy up to 97%, and footfall outperforming the national benchmark. Our value and discount focused occupiers have traded well over the Christmas period, with the vast majority reporting positive like-for-like revenue trends. In December 2016, we qualified for admission into the FTSE 250, FTSE All-Share and EPRA indices following our move from AIM to the Main Market in August 2016. Even at this early stage, we have seen improved liquidity in our shares and access to a wider pool of capital.
“Looking ahead to the final quarter of our financial year and beyond, we remain confident that with the convenience-led profile of our portfolio, affordable rents, conservative balance sheet and risk controlled development pipeline, our proven business model is well equipped to continue to deliver secure and sustainable cash returns to our shareholders.”
