Newriver Reit Plc · LSE:NRR
Newriver Reit — FY2017 Earnings Presentation
37 slides from Newriver Reit's earnings presentation, May 16, 2017
Slide 1: Full Year Results Presentation, 12 months to 31 March 2017
NEW RIV=R CONVENIENCE-LED COMMUNITY-FOCUSED Full Year Results Presentation = =» 12 months to 31 March 2017 an 16 May 2017
Slide 2: Highlights
NEW RIV=R HIGHLIGHTS Convenience-led strategy delivering growing and sustainable cash returns * FFO increased by 24% to £58.2m, ordinary dividend increased by 8% to 20.0 pence per share * Special dividend of 3.0 pence per share; total dividend +24% to 23.0 pence and fully covered Disciplined stock s
Slide 3: Proven Business Model
* Convenience & community focus ° Disciplined stock selection ° High yield, low risk assets ° Sustainable income, affordable rents ° Active asset management ° Risk-controlled development ° Profitable capital recycling ° Benefits of scale Profitable capital recycling PROVEN BUSINESS MODEL Disciplined
Slide 4: Our Marketplace: Recent trends in our occupational market
NEW RIV=R OUR MARKETPLACE Recent trends in our occupational market * Net store closures in the UK in 2016 represent less than 0.5% of units tracked by LDC * Closures are mainly in High Street and standalone locations e Which is where there is a significant oversupply of space Net Openings & Closures
Slide 5: Our market is forecast to grow
NEW RIV=R OUR MARKETPLACE Our market is forecast to grow * Convenience and value retailers dominated 2016 openings, accounting for 69% of store openings, with growth expected to continue ¢ In-store spend is forecast to grow by 10% by 2021, led by convenience and non- discretionary categories ¢ The o
Slide 6: FFO definition
• • • • • • *FFO = Recurring Profits +/(-) Profit/(Loss) on Disposal of Assets +/(-) Exceptional/non-cash items 6
Slide 7: Growing Recurring Cash Profit
GROWING RECURRING CASH PROFIT (£M) RECURRING FFO BRIDGE 12.7 1.1 11.5 FY17 profiton Sheffield FY17 FFO disposal transaction 0.3 as FY16FFO FY16profit Bravo JV FY16 Net Taxation Other FY17 ondisposal Promote Recurring acquisitions Recurring FFO FFO Recurring FFO per share: Pre tax 19.6p 20.4p Post ta
Slide 8: +24% Growth in FY17 Dividend
RIV=R +24% GROWTH IN FY17 Total 23.0 Dividend ------ 4 -+24% | Special ! | Dividend | | 30 1 17.0 Ordinary Dividend +8% 16.0 16.0 15.0 ' DPS (pence) FY11 FY12 FY13 FY14 FY15 FY16 FY17 DIVIDEND TRACK RECORD: Q1 Ordinary Dividend +5% FY18 Dividend 15% 100% 102% 98% 16% 144% cover 108% Compound annual
Slide 9: Conservative Balance Sheet
NEW RIVER CONSERVATIVE BALANCE SHEET ° Investment properties increased to £1,131m Proportionally Consolidated =a primarily due to £158m of acquisitions &m ° EPRA NAV increased in H2 to 292p from 290p in H1; due to improved valuation Investment Property 1,130.6 973.3 performance * Well capitalised wi
Slide 10: Debt: Well Placed for Refinancing Opportunities
NEW ~ RIV=R DEBT — WELL PLACED FOR REFINANCING OPPORTUNITIES * Low cost of borrowing; 3.5% 31 March 2017 Balance sheet debt facilities pegs Inte st * — Undrawn debt facilities; £74m Loan expiry Oost LIv ICR HY17 covenant covenant . 97% hedged (44% fixed, 53% Dek. Mar 2018 £49.01 capped) eka jar Om s
Slide 11: Balance Sheet Refinancing
NEW RIV=R BALANCE SHEET REFINACING Appointed Rothschild & Co as independent debt advisor in February 2017 Opportunity to refinance the balance sheet on an unsecured basis Key objectives: * Toreduce cost of debt ¢* To increase debt maturity to between 5-15 years * To utilise existing banking relation
Slide 12: Portfolio overview and occupancy
NEW RIV=R 96% 96% 5, 95% 96% 96% ‘O FY11 FY12 FY13 FY14 FY15 FY16 FY17 Retail occupancy track record: above 94% since IPO oo! es 61%@ Shopping centres 14% @ Retail warehouses 4% High street (Big Boxes) 5% e Retail development 16% @ Pubs & C-stores & a & is y g ¢ ES ow cot £1.1bn* portfolio, net equi
Slide 13: Resilient Performance from Balanced Portfolio
NEW RESILIENT PERFORMANCE FROM RIV=R BALANCED PORTFOLIO As at 31 March 2017 Valuation Weighting Capital Return LFL ERV NRR share — NRR share H2 FY Growth £m % % % % Shopping Centres 697 61 0.6 (0.8) 6.9 77 1.6% Retail Warehouses 153 14 0.6 0.5 6.4 7.3 2.1% High Street (Big Boxes) 45 4 (2.7) (3.9) 7A
Slide 14: Retail Warehouse, Sheffield
Retail Warehouse, Sheffield 14
Slide 15: Disciplined Stock Selection: Bexleyheath
NEW DISCIPLINED STOCK SELECTION: RIV=R BEXLEYHEATH Activity * 23,300 sq ft of leasing deals completed * Morleys Department Store opened in April 2017 in 40,000 sq ft former BHS unit ° Working in partnership with the council to design a masterplan for the area ° Potential to build residential units i
Slide 16: Disciplined Stock Selection: Sheffield Transaction
NEW DISCIPLINED STOCK SELECTION: RIV=R SHEFFIELD TRANSACTION | | Existing building | New building Potential site sale Catley Road Unit 3} Unit 4 Unit 5 F&B drive through a Greenland Road 16
Slide 17: Sheffield key facts since acquisition
NEW RIV=R Key facts since acquisition Acquired from RBS in: 2014 for £62.6m Total size: 320,000 sq ft Increased by 21% Valuation: £81.6m Increased from £62.6m Total capex spend: £7.0m Total return to date: 32% Upsized retailers y ‘Dunnes - N +15k sq ft to A 35k sq ft ~ Next f +29ksatt | to A 44k can
Slide 18: Key facts since acquisition
NEW RIV=R Key facts since acquisition Acquired from an institution in: 2014 for £7.5m Total size: 97,300 sq ft 71,100 sq ft of leasing Valuation: £11.1m Increased from £7.5m rT Total capex spend: £1.2m 20k sq : y Total return to date: 25% New retailers 18
Slide 19: Development pipeline
*Excluding residential • • • • • • 19
Slide 20: Key projects 2017/2018
Key projects 2017/2018 Burgess Canvey Pub Cowley, Hill Island Portfolio Oxford Pre-let & in solicitors hands* 59% 75% 100% 82% Pre-let & in solicitors hands rent (£m)* 1.4 0.7 1.7 0.4 Total construction cost (£m) 47 7.5 27 56 Total Profit (£m) 10-15 2-5 5-10 15-20 Total Profit on cost 17% 20% 16% 26
Slide 21: Applying Our Business Model: Pub & C-Store Portfolio
NEW RIVER * 16% of total portfolio ° High occupancy * Strong income returns ° Active asset management and risk- controlled development opportunities * 11 c-stores delivered to Co-op * 22 pubs with new 15 year RPI linked leases with Marston’s ° Recycling capital profitably ° 12 disposals for £6.6m °
Slide 22: C-store and residential developments
NEW RIV=R C-Store developments * Further 8 handed over in period * 11 handed over to date, 3 on-site ¢ Agreement to deliver 40 to Co-op * — First c-store disposal for initial yield of 4.85% Residential developments * Identified almost 200 residential units across 55 sites * Consent for over 70 units
Slide 23: Looking Ahead
RIV=R LOOKING AHEAD Continued focus on delivering growing and sustainable cash returns * Highly scalable and profitable business model ¢ Active asset management enhancing income returns * Growing capital and income returns from risk-controlled development pipeline Remain active in the investment mar
Slide 24: Appendix
n= Appendix
Slide 25: Management Team
RIV=R MANAGEMENT TEAM 4.2 David Lockhart Mark Davies Allan Lockhart Chief Executive Chief Financial Officer Property Director * David is a Chartered Accountant * Over 20 years experience in * 25 years’ experience in the UK and Solicitor with over 35 years’ Finance, and 10 years in UK retail property
Slide 26: Strong Track Record
NEW RIV=R Assets under management £1.3bn FY13 FY14 FY15 FY16 FY17 FFO per share 24.9p 1% 24.9 [ : i FY13, FY14 FY15, FY17 * Compound annual growth rate Gross rental income (proportionally consolidated) £106.7m a 7 a2 106.7 oe 828 1 FY13 FY14 FY15, FY16 FY17 Dividend per share? 23.0p FY13 FY14 FY15 F
Slide 27: Robust EPRA NAV per Share
RIV=R ROBUST EPRA NAV PER SHARE 24.9 19.75 4.3 — 1 Le EPRA NAV Funds From Dividends Paid Sheffield Property Purchase Costs Main Market Property Operations Revaluation Revaluation move/ Other Revaluation 31 Mar 2016 31 Mar 2017 27
Slide 28: Portfolio Performance
NEW RIV=R As at 31 March 2017 Valuation NRR share £m Capital Return H2 % FY % PORTFOLIO PERFORMANCE NEY LFL NIY* LFL NEY* LFL ERV Growth % Shopping Centres 697 0.6 (0.8) 6.9 77 4 (5) 1.6% Retail Warehouses 153 0.6 0.5 6.4 7.3 65 "1 2.1% High Street 45 (2.7) (3.9) 7A 6.9 (27) (22) 2.5% Pubs & Conveni
Slide 29: Cuckoo Bridge Retail Park, Dumfries
NEW RIV=R Acquired off-market in June 2016, NEY 8% Strong catchment of c.90,000 Comprises 130,000 sq ft across 7 units Fully occupied 550 car park spaces Potential to extend and improve occupier line up, with deals in advanced negotiation Cuckoo Bridge Retail Park, Dumfries Price £20.2m NEY 7.9% NOI
Slide 30: Active Asset Management: Retail Leasing & Key Metrics
NEW ACTIVE ASSET MANAGEMENT: RIV=R RETAIL LEASING & KEY METRICS Retail leasing activity in period NEW DUNNES resis cynics Next BUNNES No. of Leasing Events 333 Total Headline Comparison to 9 ERV +3.9% Average New GER : Lease Length 9.9 years BING Poundland lhalfords| LA Retail portfolio metrics 6m P
Slide 31: Retail Business Rates - 9% Saving
NEW ACTIVE ASSET MANAGEMENT: RIV=R RETAIL BUSINESS RATES — 19% SAVING Draft 2017 rateable value saving Yorkshire & London South East East Midlands East ofEngland SouthWest West Midlands Humberside North West North East Total 33% I I I 19% 17% 16% 17% 17% 14% 12% 14% I 90% 10% 10% 11% 1 | 6% 6% 7% I
Slide 32: Convenience Stores Completed to Date
NEW RISK-CONTROLLED DEVELOPMENT: RIV=R CONVENIENCE STORES COMPLETED TO DATE NaF — Dec 2015 Apr 2016 Apr 2016 Jun 2016 Stoke-on-Trent — Heathcote Street Chesterfield — Spital Lane Wrexham — Marford Hill Shifnal — High Street New build Conversion New build Conversion Jul 2016 Aug 2016 Sept 2016 Yeovil
Slide 33: Development scheme: acquired 2010 for £12m
* Acquired 2010 for £12m, 8.5% NIY * 200,000 sq ft retail * 10 screen cinema * 63 bed hotel ¢ 5 restaurants ¢ 140+ residential units; nil affordable housing * 500+ parking spaces * Gym ¢ New Library * 49% pre-let Travelodge cineworld NeXt »Nando'’s« 33
Slide 34: Retail park scheme, Ramsay portfolio site
* Acquired site in July 2015 as part of Ramsay portfolio * Value of £1.0m attributed to brownfield site at acquisition, next to existing Morrisons * Planning consent received in November 2016 for a 62,000 sq ft retail park * Scheme is already 52% pre-let; 75% including deals in solicitors’ hands 34
Slide 35: Templars Square Shopping Centre, Cowley
* Acquired Templars Square Shopping Centre for £24.6m in December 2012 * Planning submitted recently for a 236,000 sq ft development * Retail & leisure element 82% pre-let * 226 residential units * 71 bed hotel, Agreement for Lease signed with Travelodge * 2new restaurant units and significant publi
Slide 36: Disclaimer
RIV=R DISCLAIMER The information in this presentation may include forward-looking statements, which are based on current expectations and projections about future events. These forward-looking statements reflect the directors’ beliefs and expectations and are subject to risks, uncertainties and assu
Slide 37: NewRiver REIT plc
NewRiver REIT plc 37 Maddox Street London WIS 2PP nrr.co.uk