Thursday 8 October 2020 11:40 am

Landlord New River converts retail property into residential amid high street turmoil

Landlord New River REIT is pushing ahead with its plans to convert some of its retail and pub destinations into housing, it announced today, amid a challenging period for the sector. 

The real estate investment trust announced today that it has progressed its residential conversion opportunities during the coronavirus pandemic.

Read more: Retail landlord New River suffers drop in rent payments due to coronavirus

In a trading update this morning New River said it had revised plans for a development in Burgess Hill, Sussex, by increasing residential space and reducing retail units. 

The company is also preparing to sell 10 homes at its mixed-use development in Poole. 

New River, which owns community pub business Hawthorn Leisure as well as shopping destinations, said it had collected 66 per cent of rent from tenants in the third quarter, and has signed agreements with a number of occupiers over outstanding payments.

“We continue to have limited exposure to the structurally challenged retail sub-sectors that have been particularly impacted by COVID-19 and recent restrictions, with no department stores in our portfolio, and minimal exposure to mid-market fashion and casual dining operators”, the firm said.

The firm’s pub portfolio has reopened following the easing of lockdown restrictions in July, with like-for-like sales since then down eight per cent compared to last year.

It is aiming to dispose of between £80m to £100m of assets during this financial year, with £65.7m of disposals either completed, exchanged or currently under offer.

New River said it has £140m of cash reserves, 71 per cent more than 31 March, driven by the progress with disposals and rent collection.

Read more: Intu sells retail park to New River REIT for £40m

The REIT’s retail and pub businesses were both cash positive throughout lockdown, it added.

The company has total available liquidity of £235m, including a £45m undrawn revolving credit facility and eligibility for £50m of financing under the Covid Corporate Financing Facility.