Abrdn Property Income Share Discussion Threads

[hindsight] 07/11/2022 10:16

As a holder I prefer the 3 years vs 5 years, as my thesis is if things get really bad like in 1990s rates will be lower than futures forecast of 4% sonia. But there is the risk if things bad banks will want a large spread

[nickrl] 06/11/2022 20:20

@specto there is a possibility that they would have been better off sticking with SONIA+1.5% if you believe rates will peak at less than 5%.

[spectoacc] 06/11/2022 15:29

@nickrl - ARi said 2.25% for rates peak, when they were already at 1.75%! Surely Baggaley could have seen through that - the rest of us could.

Interesting his comments on fixing 5yrs vs 3 yrs.

Been a dearth of insider buying in all the REITs so far.

[nickrl] 05/11/2022 17:59

@EI Baggley isn't a director so no disclosure in the annual reports. Only one BoD has bought in the last 12 months.

@rambutan thanks for posting missed that one. Baggaley pretty open which is quite refreshing. Like the way he celebrates the margin as being good value and hes proud of that before telling us about the swap rate. In questions he mentions that their in house team see rates lower in 3 years. That will be the same ARi that told him rates were going to peak at 3.5% one quarter ago. Also he cites yield of US reits being above 8% so can i see why another contributor has been pointing towards the US for value.

[essentialinvestor] 05/11/2022 15:09

How many shares does he hold in his beloved Trust?.

[spectoacc] 05/11/2022 14:58

Thanks @rambutan2, lol. A good listen, and you've largely nailed it.

"With hindsight, I rather wish I'd locked in at the beginning of this year."

[jonwig] 05/11/2022 07:13

Thanks, ram ... but I could barely hear what the man said, though every second word appeared to be "erm".

The FT today describes forced selling by open-ended property funds of prime London properties. This could cause some worry with loan covenants.

[rambutan2] 05/11/2022 03:11

From yesterday, the man himself sets the scene - weep as he tells heartfelt truths, cheer as he recalls winning plays and listen agog as he predicts what the future holds for his beloved Trust:

[pavey ark] 04/11/2022 14:02

nickel, I am not a REIT sort of a guy and was simply pointing out that things may not be that bad and certainly better than some were suggesting.

I have said before that you only get the good news and never the riskier lets.

On a broader note I think they are pulling things together but these successful sales and reduced vacancy should be pushing the company on ....NOT just making up for the refinancing fiasco.

I bought here for a number of reasons:

1. "lucky share" always done well with it (not scientific but hey ho!!)
2. There comes a point when yield and discount have to be put in the equation.
3. I've followed Baggaley when I held before and he does seem to know what he is doing.
4. I very much like their long standing environmental approach which I believe will be of long term (financial) benefit to shareholders.

[nickrl] 04/11/2022 10:43

@paveyark i wish API, plus plenty of others, would be more transparent about the other side of the rental equation ie whats the lease/expiries income that's at risk. We get all the good news about lettings and potential lettings which if all are crystallised will go some way to offsetting recent sales which will drop NRI by c1m. The funds raised will help drive the need for much of the RCF to be drawn which as it exposed to SONIA currently could be worthwhile although it may actually cost lees than the fixed term loan!

So for me is whether they can sustain the dividend and at the cash level they can't however it wouldn't be unreasonable to use some of the profit from the sale of Rainham to cover the deficit which is what i expect them to do for next 12mths. After then its at risk of being cut but by how much depends on how breaks/expires evolve hence my wish for greater transparency year by year. API deign only to give a five year view and when i asked them at a presentation for yearly breakdown response was its irrelevant as its just part of the churn of managing property business maybe in the good times but not in the bad times. DLN are the benchmark here who give 3 years ahead and update 6 monthly what has happened on expiries/breaks.

[cwa1] 03/11/2022 07:48

Dividend:-

Third Interim Dividend

The Directors of abrdn Property Income Trust Limited (the "Directors") have declared a dividend of 1.0p per share payable in respect of the quarter ended 30 September 2022 split as follows:

Property Income Dividend (“PID”) 0.1806 pence per share

Ordinary Dividend (“Non PID”) 0.8194 pence per share


Ex-Dividend Date - 10 November 2022

Record Date - 11 November 2022

Payment Date - 25 November 2022

Dividend per Share - 1.0p

[cwa1] 03/11/2022 07:47

Updated NAV, etc...



Net Asset Value and Valuations

· Net asset value (“NAV”) per ordinary share was 106.1p (Jun 2022 – 110.7p), a decrease of 4.1% for Q3 2022, resulting in a NAV total return, including dividends, of -3.3% for the quarter;

· The portfolio valuation (before CAPEX) decreased by 4.2% on a like for like basis during the quarter, whilst the MSCI Monthly Index decreased by 5.1% over the same period.

· Voids have fallen to 9.3% in September 2022 from 11.8% in September 2021, with a further 1.8% reduction contracted subject to completion of a refurbishment.

The outlook obviously remains uncertain, and continued elevated volatility is to be expected. In that environment we believe it is important to look through the current turmoil, and structure portfolios to hold good quality assets that will continue to meet occupier requirements in order to maximise the long term income potential. Industrial / logistics remains a favoured sector over the medium term, as do sectors of “Other”, in particular some of the living sectors. Offices and retail are likely to remain challenged, and stock selection will be paramount in these sectors.

[pavey ark] 02/11/2022 15:43

"9 of the last 20 posts on here are yours."

There's number 10 .....mainly in response to you and in addition I have shares here.
I was referring to your 15 posts a day on numerous boards.....to be fair you do say the same thing on all of them.

"Well you certainly have an opinion on all of them and it is repeated on a daily basis."

didn't that give you a clue ?

[essentialinvestor] 02/11/2022 15:42

I know Epsom well and would be surprised if there is healthy demand for offices
in that area. Kingston a few miles down the road tends to be a more attractive location.

[pavey ark] 02/11/2022 15:37

nickrl, a bit more thought in your post but it does focus on this sale and then that is simply extrapolated to fit you views.

Looking simply at the sale: it looks a very good deal in the current climate.... regardless of the refinancing or any other aspect of API's circumstances.

As I said before the occupancy levels have always been low/poor and the valuation over the last few years is shown at £8m-£10m.

API did some work on the property, signed up new a new tenant or two, got the occupancy up to 100% and unsurprisingly the valuation rose ....just a guess but £8m to £9m.........the weighted lease period was 2.5 years !!!

Obviously API want to sell and since June the market has fallen and certainly looks like falling further ......here is the clincher....If I owned it I would have been happy to sell at £7.75m!!!

This is a win win for API as they have sold a historically underperforming asset in challenging times and there is the additional benefit of increasing cash reserves ...again in challenging times.

My view of the sale as a stand alone is.... GOOD!!
My view of the sale in terms of the additional bonus of cash generation is ....VERY GOOD!!

This is still a sound and reasonable deal on its own and can not be construed as a panic measure or fire sale.

NB I am not saying things are rosy for any REIT or perhaps any share but time for a bit of objectivity.

[spectoacc] 02/11/2022 15:18

9 of the last 20 posts on here are yours.

[pavey ark] 02/11/2022 15:05

"API not the best managed REIT IMO, now running to stand still"

Well you certainly have an opinion on all of them and it is repeated on a daily basis.

To post c. 15 times a day over a long period does tend to reduce the effect.

I am certainly not a massive fan of REITs but have done well with them buying and selling at opportune moments.
Had three REITs at the start of the year and sold them by April ...nipped in and out of SREI but didn't warm to it....API my only REIT.

My reason for reinvesting in API at 52.5p (having sold in April at 88p) was simply because of the divergence of the price from other REITs I was tracking .....due in no small part by the response to the refinancing.......but for some it was good for one post after another after another !!

The refinancing was not their finest moment but it had to be seen in the context of their overall debt.
This is a very well run company and Baggaly has shown himself to be ahead of the curve in most aspects of the property business.
Offices: Total allocation AND type of use
Industrials: size and facilities available
Environmental : EPC certification...actually saw one REIT (popular on ADVFN) with 28% of properties uncertified!!

The loan to book value is now 20% and the spread of assets looks as good as any.
The recent sales have taken the risk even lower and as I pointed out the two sales since June have /can produce the same income as the sold properties and leave c. £9m-£10m over.

The recent sale looks like going into the RCF but doesn't have to stay there.

Anyway I tend to actually buy (and sell) shares and do it quite well ......as everyone knows you win some you lose some but I've never managed 15 posts a day....must try harder !!??

[spectoacc] 02/11/2022 13:56

I think the tone says it all:

"Whilst disappointing to have sold below the June valuation, we believe values will continue to be under pressure in this sector due to market and economic uncertainty. In the short-term, we will use the proceeds to reduce our gearing."


But to suggest valuations are only going to be "..Under pressure in this sector.." misses the fact that they've been under far more pressure in eg Industrial.

I still think REIT debt costs will eventually go higher as liquidity is drained by the BoE, but there's no argument that at any time prior or post they would have got a better rate. API not the best managed REIT IMO, now running to stand still.

Most seem to have recognised an impending top - including API, to be fair - but having put the bullet in the gun, API then shot themselves in the leg.

[nickrl] 02/11/2022 13:46

@paveyark agree they would have had this sale in the system before agreeing the RBSI loan adjustment but they surely will have a policy now of seeking to minimise the RCF given the high all in rate they've signed upto. As it currently stands my view is that will be an outlier rate in our REIT space and it does rather reek of a panicked decision by Jason and the board many of whom are connected to pension industry so maybe are guilty of a bit too much knowledge creating group think.

Anyhow they will only be able to sustain the dividend rate post the rate change by using capital.

[pavey ark] 02/11/2022 12:27

Further to this sale it now looks a rather good deal.

The occupancy rate was low even before covid and has even been under 60% one year.
The overall lease term was 2.5 years and I don't thing API was looking forward to voids in two years time.

API obviously spent some money, got the occupancy rate up to 100% and sold it on.

Interesting that in Dec. 2019 API was 33% invested in offices, 23% June 2022, now with the two recent sales it is c.20%.

This sale was part of a policy of reduction in office assets and not in any way a fire sale.

Overall a good deal and the cash is certainly welcome.

[pavey ark] 02/11/2022 10:47

I doubt if this is anything close to a distressed or forced sale.

These sort of negotiations must have a considerable lead time but the final sale price may have been "adjusted".

API sold offices for c£8m in August on a 5.3% yield and did say that it could have problems with improving the EPC rating.

The company recently stated that ALL offices were compliant with the 2030 EPC requirements so this asset (after recent refurbishment) was now at least B rated.

Obviously the almost 12% discount is "disappointing " but at least 5% has been acknowledged as the Q3 industry wide valuation guide....... more for offices ?

Perhaps more importantly the API share price has dropped over 30% since June and any share buyback would obviously be a better deal than holding this asset.
If the dividend is held at anything close to the current value the "yield" on the buyback is c. 7%

My guess is that the £7.7m will simply go against the revolving credit debt and bring the total (term + RCF) very close to £100m with the possibility of a future buyback programme.

Interesting to look at the 2021 report and the occupancy rates "The portfolio vacancy rate at the end of 2021 was 9.7%. This is higher than the Investment Manger targets (5%) and is predominantly within the office portfolio."

Given that things are unlikely to get better for the office sector sales in this sector should be viewed against this backdrop.

[spectoacc] 02/11/2022 10:07

Fail to see how RGL isn't toast, if my bearish view proves anything near accurate. Perhaps very slightly insulated by having high yields - easier to ignore an interest rate move from 0.1% to 3% when your yields are 10%, than ignoring the same move when your yield is 3%.

Def think API are having to realise cash to cut the RCF. No particularly benefit to earning c.7% when your debt's costing you that.

[nickrl] 02/11/2022 10:02

@specto they need income producing assets to cover the interest costs but guess they are dialling back the need to carry an RCF. Won't help the dividend in the long though. Also not a good read across for RGL.