Berenberg raises target price on NewRiver REIT

Berenberg said although NewRiver's first-half results highlighted the "operational resilience of the business", despite building headwinds across the retail sector and Covid-19 pandemic impacts, the group's performance was likely to deteriorate further before any recovery materialises.

"Despite the potential for dividend reinstatement this spring, now is not the time to buy the shares in our opinion," said the analysts, which transferred coverage from Kai Klose to Kieran Lee.

Berenberg, which reiterated its 'hold' rating on the stock, stated that NewRiver's retail portfolio would "remain challenged", with further tenant insolvency events likely to reduce passing income, while high and growing national retail vacancy rates and little occupational demand looked set to leave rents and valuations "depressed".

Turning to Hawthorn, NewRiver's community pub business, although the performance of the wet-led pubs was "materially affected" by the spring lockdown, the first tiered restrictions system, then lockdown 2.0 and now the tougher second tier system, the German bank said there was still "cause for optimism".