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Ground Rents Share Discussion Threads
Showing 51 to 75 of 75 messages
|Proposed changes - longer-term debt:
Highher equity returns should be the result.|
|ARTL is another way into this type of income stream.18% of its assets are in Ground Rents of a similar nature, and its at a big % discount to NAV.
|Fundraising has been mooted more than once. This new share price premium gives them an ideal opportunity to raise new equity somewhere between 119p and 128p depending on investor enthusiasm.|
|So folks realise this is an index-linked gilt in all but name and have been buying like mad.|
|Tipped in IC. Summary:
True, shares in Ground Rents won't appeal to punters wanting a quick killing. But - for providing a steady, low-risk investment with dividends paid quarterly - the attractions are clear, especially when contrasted with the negative returns offered by long-dated index-linked gilts. The shares are trading at a small premium to forecast net asset value (see table), which may look expensive compared with some Reits. But, given the reliability of the revenue stream and the potential for further valuation uplifts in the underlying portfolio, that premium isn't a problem. Buy.|
|Pleasing growth in NAV pus div yield of 3.1%, so c total return of 7%, in line with what I am looking for in this stock plus the benefit of inflation protection.|
|The unaudited net asset value per share of the Company as at 31 March 2016 was 118.9 pence. This is an increase of 4.1% over the net asset value of 114.2 pence per ordinary share at 30 September 2015.
The market seems to have anticipated this, but the share should trade at a premium, so a rise this morning is possible?|
|David Stevenson likes GRIO:
|ARTL has 19% of its assets in Ground Rents on a similar basis to this.Its 33% below NAV too.|
|Jonwig, the fact remains that the actual dividend payment has fallen.
The capital appreciation figure is based on the current market price paid for these ground rents.
If interest rates increase the yield on these assets would not be as attractive and their value could decline, so in the long/medium term I think it would be wise to focus on the actual dividend paid.
Obviously there is the comfort of a comparative secure stream of income that is effectively index linked but it is 3.3%.
The income stream is certainly based on upward revision only but that is not the case with the valuation of the worth of these assets.
Still looking at these but not jumping in yet and when/if I do it will be for a smaller number than I first planned to buy.|
|Pavey - some good points.
I've just checked, and can't find reference to a target yield on NAV of 4.4%. The current 3.3% is the one I'm assuming will hold for now.
The yield won't be so high because capital appreciation has kicked in over the past couple of years, so you're getting total return rather than income yield.
Agreed the share price got a bit toppy, but has come back with a premium now of only about 4% to NAV.
Again on the plus side, much of the portfolio is either index-linked or periodic doubling, so you've got - hopefully - protection from inflation. Also, shouldn't be too highly correlated with the property sector in general.
A possible minus: they might get carried away and get excessively geared, buying ground rents at too high a price.
On balance, my view is very much yours of "buy and forget". Fortunately my purchases were below 105p.
EDIT: I see there was some discussion of target yields earlier on this thread, but the figures mentioned are "history" now!|
|I've been looking these over and have spent some time getting into the world of ground rents (new to me) but have to say I was rather disappointed with the recent dividend announcement and with it a running yield of c. 3.2%.
Now wondering about whither to include these in a new portfolio I was setting up. My new shares were intended as a buy and forget income stream so these should have fitted the bill but with the possibility of interest rates rising and inflation looking rather subdued I think there may be better options.
I wonder if I've missed something and I know there was a lot of corporate action ,fund raising,shares issued,fairly heavy buying of ground rents with remaining cash so this could have impacted on this year's cash ?
These may be considered a safe investment but they are trading above asset value ( most recent figures I could find) and if the yield target is 4.4% I certainly don't see much upside on the share price for some time to come.|
I added around 105p a while ago (why not below 100p? Kicking myself). May add again if they fall closer to NAV.|
|Yes, I read that last night. With the MCap only about £100m the market would be a bit thin.
The NAV is about 105p, I reckon.|
|Prominent tip in IC|
Now fully committed
The financial and risk profile and the underlying investments imbue the fund with ultra low risk bond characteristics with little or no link to traditional equities. The underlying strength of the Ground Rent market since listing slowed the pace of investment. The manager chose to initiate and craft the most appropriate structures with developers rather than purely chase investments in the secondary market. This has resulted in a higher proportion of inflation proofed assets with shorter review periods than originally expected. We see the potential for 3.8p of dividends per annum once all options are completed which, after an initial period, should then grow at close to the rate of inflation over the long term.|
|They have their target £9m with a 107p placing.|
|They seem to be high-end apartment blocks:
If they aren't sold, it looks as though they can abandon the option, which would be worth the premium cost.|
|Acquisition and placing this morning at a fine discount to share price and premium to NAV. Good use of recent strenght in share price|
Transactions for large, institutional-type portfolios are occurring at yields which have not been seen before and are more closely aligned to index-linked gilt rates.
"The Company has seen the benefit of this in terms of capital value appreciation, but the corollary is that it has become increasingly difficult to find new investments for prices at which GRIF could achieve its target dividend yield.
Of course, they could return capital to shareholders rather than chase yields lower.
Anyway, showing asset value growth.
|bisiboy - yes, that's been said (post #25).
But rental income returns should be steady or rising, whereas capital values can fall, especially if bid up far enough.
When I bought some of these, I hoped they would be a substitute (to some extent) for an index-linked gilt, with a better yield but less indexing. I'm not so sure now, with the yield compression. Anyway, I haven't sold but haven't added.|
|yes but surely lower yields equal rising prices and therefore an increase
in their NAV.|
|Mozy - it's in the 'Outlook' section of their H1 report. I tried to copy/paste from my pdf but they've snarled up the facility.
You might get it here:
Also their recent monthly reports have stressed the same point, that GRs are having to be purchased on lower yields.|
|Jon - why would the base level of dividends fall?|