Investors' Chronicle - NewRiver plots a path to a progressive dividend

➤ Adjusted cash flow per share up 2 per cent

➤ Dividend up 3 per cent

UK consumers’ willingness to keep spending if bills rise and uncertainty prevails is a key unknown for retail landlords such as NewRiver Reit (NRR). Chief executive Allan Lockhart told the IC that his portfolio was “well set up to navigate a more volatile macro environment”, however, due to its focus on more defensive tenants such as grocery stores and discounters.

That portfolio is now three-quarters weighted to NewRiver’s highest-conviction sectors of London retail, UK major cities and retail parks, and Lockhart said he was “confident” in finding further investment opportunities in these areas.

That’s good because, even after last year’s acquisition of Capital & Regional, NewRiver’s £800mn portfolio remains too small for a real estate public market whose membership is rapidly consolidating.

The company has £116mn of cash on its balance sheet, but may need to sell some of its less favoured properties to fund further acquisitions. It completed £110mn of disposals last year at book value, which should be supportive of its ability to do so.

NewRiver has recently refinanced £240mn of debt instruments, but has a £300mn corporate bond due for refinancing in March 2028. Lockhart conceded that higher finance costs would act as a drag on earnings, but argues that rental income growth and, if necessary, a higher dividend payout ratio would support a progressive dividend.

That forward dividend yield currently amounts to 9 per cent, which is high even in a flailing real estate sector. Although analysts are currently forecasting that earnings will stall in FY2028, due to that higher finance cost, we think there is enough value here, with the company on only 10 times those analyst earnings. Buy.

Last IC view: Buy, 72p, 2 Dec 2025