Abrdn Property Income Share Discussion Threads

[williamcooper104] 01/5/2024 17:54

Valuers post GFC are a lot more conservative They usually come in at 5% below market and you've to argue it up If you chose not to then clearly it won't be marked up Valuers used to be more relaxed about corporate valuations than valuations for lenders but they've got more cautious on those too, especially as auditors now seek to actually audit/challenge the values

[pavey ark] 01/5/2024 17:33

To get back to my earlier "conspiracy theory"....

We have a property well let (90%+) ,good tenants, good lease terms and a rental of £2-£2.4m and it is valued at c. £19m and management says nothing.

Valuation is an opinion/best guess and I agree that it is only when cash is produced and a deal is done then there is a real figure.....but you must surely pick up on this....unless it suits you.

CREI and SHED both wanted API and they would have had little that doubt they could sell off the bits that THEY didn't want.

I just wonder if API were quite happy with low values that would obviously not be missed by any interested party........all in some mad drive to get rid of API (and UKCM )

I'm glad we have some fairly aggressive shareholders who favour a wind-down and will be watching how it is done .......it's not as though we can rely on the board to look after our interests.
One positives that Jason Baggaley will want to show that he was right with the purchases he made and a poor sell off hardly looks good in his CV.

[skyship] 01/5/2024 16:38

Well, IMO they should shift it at a single figure yield. An 11%-13% level is absurdly high by any definition. 54 Hagley Road is Edgbaston's prime office, totally renovated and leasing well. It is currently significantly under-valued.

[flyer61] 01/5/2024 16:13

The proof will be when it is sold.....If you are driving that it WILL SELL in the 7-9% range I'll doff my hat to your hints list. But we will need to see it and I don't on balance think we will.

I do not consider 11-13% a very, very high yield. It is high yield but that's it.

Bought more today, so have quite a bit of skin in the game. Hoping very much I am wrong and you are right! But as has been shown even with things selling at declared NAV we should still see decent returns.

[pavey ark] 01/5/2024 15:45

Flyer61, If you are prepared to spend time and have a good look at Hagley Rd we could take this further.

Perhaps you could convince me that "a property like that" is indeed of lower quality and the very , very high yield (11% to 13% simply reflects this.....I have got things wrong before.

Hint: tenants, lease length, occupancy, position, low rental, transport links.

[flyer61] 01/5/2024 14:56

Parvey Ark...with my limited knowledge that valuation seems fair to me ie it is what someone would want to pay for a property like that. You would want to buy it on a double digit yield otherwise why bother...

[essentialinvestor] 01/5/2024 14:22

There's little need to go down a conspiatoral route. What appears conspiracy may just be a matter of simple competence, or lack there of.

A PI investing their hard earned may sometimes have a keaner eye.

[pavey ark] 01/5/2024 14:07

Garbetkib, "conspiracy theories might point the way"

As can be seen from sjl301's post an office and two industrial units sold for 11% premium (the 49% has to include ground/planning).

No fan of surveyors / valuers ....easy money and no liability (read their small print) but at API I strongly suspect they were never challenged and could have even been encouraged to "aim low"

Hagley Rd (£18m-£20m).....hmmm let's see.

1. Bought 5 years ago for $19m +£2m refurb
2. Two years later a new tram stop appears directly outside the building....directly to the centre of Birmingham
3. Rent of £20/ft which is almost half Birmingham centre rates.
4. Vacancy rate was drastically reduced in 2023 and last figure given was "over 90% occupancy"
5. various figures given for floor space 131k to 140k....let's take 135k.

135k ft X £20 X 90% occupancy = £2.43m or 12.7% yield .....!!!???

or

130k ft X £20 X 80% occupancy = £2.1m or 11% yield

Rather simplistic figures but they do look strange.

Either API have given out false figures on Hagley Rd or they were happy to go along with a silly evaluation .....why ???

( the new lettings look to be on long term lease agreements to very good tenants)

[skyship] 01/5/2024 13:07

Chmn Clifton-Brown a total wally; who should already have stood down if there were a moral bone in his body. Seems as though there isn't!

[garbetklb] 01/5/2024 12:32

I'm invested here & am v comfortable with the run off scenarios. But still no clues as to why the company were so negative about the run-off option. Any ideas? And, in this case, conspiracy theories might point the way.......

[sjl301] 01/5/2024 11:57

Interesting disposals over at CREI - hopefully bodes well for market conditions supporting a wind down in API.

From their fourth quarter update:
“During the Quarter an office building in Derby and industrial units in Weybridge and Milton Keynes were sold for an aggregate £16.1m, 11% ahead of their 31 December 2023 valuations
Since the Quarter end, a former car showroom in Redhill and an industrial property in Warrington have been sold for £11.3m, 49% ahead of their 31 December 2023 valuations
Proceeds of all disposals are being used to reduce variable rate borrowings”

[pavey ark] 01/5/2024 11:49

Skyship, just had a stern word with myself ....."no more!!"
Topped up today (slightly under your buy) with my average a hair under 50p.

Definitely finished but the figures are totally compelling.
The wind-up looks certain (?) and the values achieved will surprised to the upside.
Obviously things can go wrong but less likely here than with most other shares.

I sense that there may be an opportunity to enhance the considerable 40%-50% upside as people get excited with a quick 10% gain .......look at that ....I may buy more ... higher than this but with even better figures/% return.

"you pays your money you takes your chance"

[essentialinvestor] 01/5/2024 11:22

SHED looks the best of the best atm,
but no crystal ball obvs and something unexpected could happen, as it just recently did.

[skyship] 01/5/2024 10:01

Pd 50.8p; but they have been cheaper this morning...

[skyship] 30/4/2024 20:20

Well, at 50.6p I estimate the 2yr GRY will be in the range of 17%-25%; though early pay-outs would increase that figure.

I won't be waiting for a sub 50p price before topping up. The return is already very attractive.

[spectoacc] 30/4/2024 19:56

One wobble in the market and it should get there - API always choppy. It's worth more tho ;)

[essentialinvestor] 30/4/2024 19:42

Below .496 is my first add back price, which tbf may not be available.

[spectoacc] 30/4/2024 19:35

@nickrl - crazy isn't it. You wonder how it's even possible to spend multi millions, in a short timeframe, on what is little more than some extra legal, financial, & corporate finance advice.

It's a racket.

As for realigning the divi instead of winding up - possibly, but that very first table is for me why mismanaged API need to go.

2022 - EPS ex revaluations & swaps - 2.94p. Divi - 4p.
2023 - EPS ex revaluations & swaps - 2.83p. Divi - 4p.

Even with recent sales to reduce the ever-expensive RCF, & some extra lettings (on wide incentives), I doubt we'd have seen EPS begin with a "3", but once again it would have been a 4p divi.

To pay out the REIT 90% and leave a tiny bit in would have been 2022 2.64p, 2023 2.55p. Wouldn't have been popular, but would have been wiser.

Down here, of course, there's a lot in the price, and happy to have API as largest holding.

[hugepants] 30/4/2024 18:50

There's a nav update and divi announcement due in next couple of weeks. Will they change divi policy before the vote?

[spoole5] 30/4/2024 18:48

Was there a dividend policy announcement in the results?

[nickrl] 30/4/2024 18:29

@huge i guess it written into the agreements

[hugepants] 30/4/2024 17:56

yes I think you are right nick. Its only about 0.5% of NAV but still seems high. Whats the justification?
"...If shareholders vote for a change in Investment Policy, corporate advisors will be entitled to receive £2,129,993"

[nickrl] 30/4/2024 17:41

So the attempted mergers cost us 2.3m here with 2m incurred on CREI (1.73m expensed in FY23) and a further 0.3m on SHED and 0.1m on wind down to date. Also if ive read correctly the advisers will get 2.13m if the company is put into orderly wind down.

Interestingly they break out vacancy costs 1.47m lost on service charges plus another 1.21m of general costs.

Still feel realigning the dividend to free cash flow would have been a better outcome here but with such a low bar at 50% wind down seems a done deal this time.

[essentialinvestor] 30/4/2024 16:38

Might be an opportunity tomorrow.