Retail landlord New River REIT swings to a loss on weak investor sentiment
Property landlord New River REIT swung to a loss in the first half of the year as its portfolio valuation sank due to weak investor sentiment in the retail sector.
The FTSE-250 real estate investment trust, which focuses on retail and leisure properties, reported a loss of £21.3m from a profit of £2.7m last year.
Shares slumped 4.85 per cent after the company reported the valuation of its portfolio slipped 3.3 per cent in the six months to the end of September.
Read more: Hedge funds step up bets against retail landlord New River
However, New River’s underlying funds from operations, which excludes profit or losses on the disposal of investment properties, increased to £26.4m from £25.6m.
The property group suffered a 3.5 per cent drop in like-for-like retail net income, impacted by company voluntary arrangements and administrations across the struggling sector.
Footfall across the firm’s shopping centres fell 2.3 per cent, outperforming the UK benchmark.
New River said the impact of CVAs and administrations involving Bathstore, Monsoon Accessorize and Select in the first half amounted to £100,000.
However, the investment trust’s strategy of selecting budget retailers as tenants has helped to protect it from the collapse of mid-market fashion brands, department stores and casual dining chains, it said.
In the period New River signed deals with Poundland, The Works, One Below, Superdrug, Shoezone and WH Smith.
“Retail failures in the form of CVAs or administrations continue to have a limited impact on our rental income, as we have deliberately limited our exposure to sub-sectors facing structural challenges such as casual dining, department stores and mid-market fashion,” the company said.
New River also acquired four retail parks in Aberdeen, Inverness, Dundee and Isle of Wight in a joint venture with Bravo.
Read more: Retail landlord New River posts drop in asset value
Meanwhile, the landlord reported that earnings before interest, tax, depreciation and amortisation per pub grew 5.5 per cent
New River maintained its 10.8p per share dividend.
Main image credit: Getty