NewRiver REIT’s Q3: leasing momentum, higher occupancy, and smart disposals
NewRiver has posted a strong third quarter, with the tone set by rising occupancy, solid leasing uplifts, and disciplined capital recycling. Management says market conditions are becoming more supportive and the portfolio is the strongest it has been since before the pandemic – a confident backdrop as they look to FY27, with the CFO reiterating a well covered dividend, though no figure was disclosed.
Below I break down the key numbers, why they matter, and what to watch next.
Key Q3 numbers and YTD highlights
| Metric | Q3 / Update | Year to date |
|---|---|---|
| New lettings and renewals | 234,500 sq ft | 650,800 sq ft |
| Annualised income secured | £2.1 million (98 transactions) | Not disclosed |
| Uplift vs prior rent (long-term deals) | +56.9% | +31.1% |
| Performance vs ERV (long-term deals) | In-line | +8.2% |
| Occupancy | 96.1% (up from 95.3% at 30 Sept 2025) | – |
| Retailer retention rate | 91% | – |
| Q3 in-store spend | In-line with last year | Year to Dec 2025 in-line |
| Segment spend trends | Grocery +6.2% | Non-Food Discount +7.2%, F&B +4.0%, Health & Beauty +2.4%, Value Fashion -1.1% |
| Business rates | Rateable values +7% from 1 April 2026 | Rates payable -11% for tenants due to sector discount |
| Snozone EBITDA | £2.0 million in Q3 (vs loss of £1.6 million in H1) | £0.4 million YTD |
| H2 disposals | £12.6 million completed in Q3 | £26.5 million exchanged in January 2026; c.£40 million target on track |
Jargon buster: ERV (estimated rental value) is the market rent a property could achieve; EBITDA is operating profit before interest, tax, depreciation and amortisation.
Leasing: pricing power showing through
Leasing remained brisk. New lettings and renewals of 234,500 sq ft in Q3 generated £2.1 million of annualised income across 98 transactions. Long-term deals were completed in-line with ERV in the quarter, and the uplift versus previous passing rent was a chunky +56.9% – a clear sign that older, below-market leases are being reset at stronger levels.
Year to date, the picture is similarly encouraging: 650,800 sq ft leased, with long-term transactions at +8.2% versus ERV and +31.1% versus prior rent. Named wins with Boots and B&M in Middlesbrough and H&M in Bexleyheath add credibility to the leasing mix.
Why it matters: Beating or matching ERV while delivering big uplifts to prior rent typically supports like-for-like income growth and underpins dividends. It also signals healthy tenant demand in NewRiver’s chosen segments.
Occupancy up, customer spend resilient where it counts
Occupancy increased to 96.1% from 95.3% at 30 September 2025, while the retailer retention rate remains high at 91%. The company notes constructive discussions to mitigate the impact of H1 retailer restructurings, with no new restructurings announced since – stability that landlords welcome.
In-store customer spend was in-line with last year over the critical Christmas quarter. Within that, Grocery – the largest spending segment for NewRiver – grew a robust +6.2%. For the year to December 2025, overall in-store spend was also in-line, with Non-Food Discount (+7.2%), Food & Beverage (+4.0%), and Health & Beauty (+2.4%) offsetting softness in Value Fashion (-1.1%).
Takeaway: Leaning into value-led retail and everyday essentials continues to be the right call. The patchiness in Value Fashion is a watch item, but the broader basket that drives footfall is performing.
Business rates changes improve tenant affordability
From 1 April 2026, rateable values across the portfolio are expected to rise by 7%, but this is more than offset by the recently announced discount for retail, hospitality, and leisure properties. Net effect: an estimated 11% reduction in rates payable for NewRiver’s tenants.
Why it matters: Lower occupancy costs make rents more affordable, support leasing activity, and reduce tenant failure risk – all supportive for cash flows.
Snozone: seasonal swing into profit
Snozone, the indoor skiing and snowboarding operator, delivered £2.0 million of EBITDA in Q3, a notable recovery from a £1.6 million loss in H1 driven by seasonality. Year to date EBITDA is £0.4 million, ahead of prior year and budget, with the most profitable quarter to come in Q4.
This is useful incremental earnings and demonstrates the value of diversified ancillary income, though the core investment case rests on retail parks, community centres, and regeneration.
Capital recycling: disposals at book value support valuations
NewRiver remains on track to complete around £40 million of disposals in H2, in-line with book values. In Q3, it sold The Marlowes in Hemel Hempstead and Sprucefield Retail Park in Lisburn for combined proceeds of £12.6 million (NewRiver share). The Marlowes was the smallest asset from the Capital & Regional acquisition (2% of that portfolio by value). Sprucefield was held in the Capital Partnership with BRAVO; its disposal leaves only The Moor in Sheffield remaining in that partnership.
In January 2026, the company exchanged contracts to sell Cuckoo Bridge Retail Park in Dumfries for £26.5 million, subject to conditions expected to be discharged in Q4. Completion risk remains until those conditions are met, but if finalised, the H2 disposal target is essentially achieved.
Why it matters: Recycling capital into higher quality, higher growth opportunities is central to the strategy. Achieving sales in-line with book value is a quiet vote of confidence in the carrying values.
Regeneration and “Work Out” progress lift portfolio quality
In December 2025, NewRiver entered into a conditional agreement to form a joint venture with Mid Sussex District Council to regenerate The Martlets shopping centre in Burgess Hill. The JV is expected to be formalised by the end of March 2026 once conditions are satisfied, including the sale of the residential site (under offer) and pre-lets for a food store and hotel (legal negotiations well advanced).
In January 2026, an agreement for lease was signed with an experiential leisure operator on approximately 80,000 sq ft at the Capitol Centre in Cardiff. This re-positions the Capitol Centre as a Core asset and reduces the portfolio’s weighting to Work Out and Other to 1% from 3% at 30 September 2025.
Reading between the lines: moving assets from “Work Out” into “Core” reduces drag and should enhance recurring income. The Burgess Hill JV, once unconditional, provides a pathway to unlocking value from complex regeneration.
Strategic backdrop: scale, focus, and what to watch
Post the Capital & Regional acquisition, NewRiver runs a £0.8 billion portfolio spanning 7.1 million sq ft across 24 community shopping centres and 12 retail parks, with tenants concentrated in essential goods and services. Including mandates for Capital Partners, total Assets Under Management are £2.3 billion.
Management’s message is clear: the portfolio is in its best shape since before the pandemic, market conditions are improving, and they see a route to further earnings growth and a well covered dividend. That is a constructive setup.
Positives
- Leasing momentum with sizeable uplifts vs prior rents and solid ERV outcomes.
- Occupancy up to 96.1% and 91% retailer retention – quality and stability.
- Tenant affordability improves with an 11% reduction in business rates payable.
- Disposals at book value and a clear route to c.£40 million in H2 – valuation support and balance sheet discipline.
- Work Out exposure reduced to 1% as Capitol Centre becomes Core.
Watch items
- Completion of the Cuckoo Bridge sale – currently subject to conditions.
- JV at Burgess Hill – depends on residential site sale and pre-lets becoming unconditional.
- Value Fashion softness (-1.1% for the year) – manageable for now, but worth tracking.
- Any renewed retailer restructuring activity, though none announced post H1.
Bottom line: momentum into FY27 with supportive fundamentals
This was a well-balanced update: strong leasing, higher occupancy, healthier tenant affordability, and capital recycling executed at book. With regeneration milestones approaching and Work Out exposure trimmed, NewRiver looks set to carry real momentum into FY27. The stated path to earnings growth and a well covered dividend is credible, with the usual execution checkpoints to clear in Q4.
