Abrdn Property Income Share Discussion Threads

[skyship] 10/5/2023 09:58

Specto - nothing in the recent Finals statement referred to rent-free periods.

If there were so, surely a significant fact that should have been stated.

If you know of one, why can't you post it?

[flyer61] 10/5/2023 09:24

Looking at some of the Commercial auction property coming to the market with new or rebased rents then 12-15 months appears common. I call that significant.

[spectoacc] 10/5/2023 09:02

Last one was 6 months rent-free, with a reduced rend beyond that. I'll drop you a message.

[ghhghh] 10/5/2023 08:57

Expect more small good news on lettings very soon, but they're only getting them away with significant rent-frees. Still - saves on empty rates liabilities.

Significant rent frees? Exactly what are these rent free periods? What is significant? Do you know?

[spectoacc] 10/5/2023 08:05

Expect more small good news on lettings very soon, but they're only getting them away with significant rent-frees. Still - saves on empty rates liabilities.

[tiltonboy] 10/5/2023 07:41

HWG sold some kit on a 4.7% yield this morning, so the market seems to be coming back to life

[skyship] 10/5/2023 07:34

Agree with all of the above; API now looking anomalously good value versus peers.

They're being rather tardy with the Mar'23 NAV update & divi.

3rd May last year; and 6th May'21.

UKCM today joined the growing list of REITs declaring a small Q1 uptick.

[hugepants] 09/5/2023 21:01

Yes it's relentless. Down 18% ytd and discount now 38%. Reits in general seem broadly flat, maybe down 1%-2% since start of the year. This looks cheaper than the rest to me.

[pavey ark] 09/5/2023 14:44

I'm obviously at odds with the market here.....bought more at 52p.

I have done a great deal of number crunching here and expect the dividend to be covered or very close to being covered.

The refinancing is a major negative but a number of point on the other side of the equation may bring things into balance...."you pays your money ..."

At 7.7% yield it looks like most disagree !!!

[pavey ark] 05/5/2023 14:22

Last top up today at under 53p giving me a yield here of 7.3%.

With the comparatively low LBV and an active management I am happy to hold here.

Well aware of the negatives and the positives but on balance ...happy to hold.

[skyship] 04/5/2023 14:54

Topped up at 53.2p! Discount = 37.3%; Yield = 7.52%.

NAV update has to be tomorrow surely. Looking for a small NAV increase.

[hindsight] 04/5/2023 11:41

giltedge1, fair point and agree the friction makes reits worse investments than direct. But discounts are my driver, when wide friction is covered, when narrow better in direct ownership

[skyship] 04/5/2023 07:15

Pavey - "Well I've been in and out of API over the past few years and have certainly made very acceptable gains."

Well done; quite right - these are for buying & selling, predicting a future move. They are NOT a BUY & HOLD stock.

I agree with you - now is a moment to be buying again.

[pavey ark] 03/5/2023 20:56

nickrl as you have pointed out many times.

My decision was based on my judgement based on much number crunching ....admittedly
also based on a best guess here and there.

"loaded up with acquisitions and committed capex "

The Morrison deal covers SONIA up to c. 5% and the I assume that the logistics unit development is based on some appreciation of demand.
The refinancing was very badly done but I have always rated this management in this sort of deal.

As I always say "you pays your money you takes your chance"

(Now buying back the shares sold for 59.5p 23/12/22 I now consider things to be a bit clearer so will probably hold for some time ......but you never know)

[nickrl] 03/5/2023 20:13

@paveyark the RCF is unhedged and is being loaded up with acquisitions and committed capex which is going to leave the divi uncovered for a while.

[m_kerr] 03/5/2023 19:59

specto - to answer your question on why reits generally perform poorly (in terms of capital appreciation).

they raise capital whenever possible, often to buy assets at the top of the market (as it's easiest to raise capital then), and are reluctant to buy back stock when their stock is cheap. this is because their fee structures generally incentivise growing NAV, rather than NAV per share. taking one example, CLS holdings, who do not have those incentives, have performed very well over the long run.

i would say however that from this lower base, returns are going to be a hell of alot better than if you bought in a year ago.

[spectoacc] 03/5/2023 16:34

@giltedge1 - triumph of hope over experience I fear. Yes, not as geared going into this downturn, but look at the mess UKCM have made of the past few years, or API's debt rollover, or even the otherwise good EPIC's attempt to sell themselves at the point when they should be coming into their own.

I don't think REITs work as LTBH. I think it's the 90% distribution rule, and the running costs. None can resist churn (5% stamp duty at a time), all pay Boards and managers and listing costs. They generally fish in the same pool and do the same things, and come unstuck together.

But - yes - possibly we'll hit a low point for the REITs over say the next 18 months, and looking back in 5 or 10 years, returns will have been strong. My fear is that the time when returns ought to have been strong has just recently passed, and they really weren't.

[giltedge1] 03/5/2023 16:23

Regarding returns of API & others similiar, I am frustrated at underperformance over 20 years, when I have seen Industrial units were I have worked go up in value considerably in the outskirts of London sometimes 2x + rent & managers with all their trading have not captured this. Common mistakes, too diversified, mistakes with gearing (overgeared going into downturns). eg now a good time for buybacks, but managers have no spare capital. Buying Office Buildings with high Cap Ex. Buying in secondary locations with limited reletting potential. That said current valuations including API, are good value, as now managers have learnt from past mistakes, & obviously new investors today can buy in at a good discount.

[skyship] 03/5/2023 14:46

RCT2 - Agreed, average investors overestimate their ability - hence 75% seem to lose money - or is that just Spreadbet/CFD traders. Anyway, most should just buy a portfolio of 10 ITs and leave management to the well paid professionals.

However, as I trained in The City and compound 15%pa through thick and thin (OK- an average, with down years in 2008 & 2011!), trading for trends is fun, intellectually challenging & highly profitable.

I suspect many of the professional investors who frequent the REIT threads fit into the same category. Most of the posters seem to reveal a fair knowledge of what they are about. Perhaps those academic researchers should be more selective in their work.

[cc2014] 03/5/2023 09:32

Buy and hold works fine if you buy the right stocks or sectors and occasionally switch stocks or sectors if you have good reason.

That's pretty much Lord Lee's approach.

Or Warren Buffet is another good example. He's held CocaCola for about 50 years.

[rcturner2] 03/5/2023 08:40

Unfortunately academic research has clearly shown that increased trading reduces your returns. Investors consistently overestimate their ability to time buys and sells.

[skyship] 03/5/2023 08:19

Couldn't be a clearer example that shares are for buying & selling; spot and play the trend. The BUY & HOLD concept worked in the last quarter of the last century; but since then - no way.

API is a classic, though not extreme example. Over the last 8months alone we've seen:

- 35%
+ 35%
- 24%

Now is a good time to BUY!

[spectoacc] 03/5/2023 08:17

We can all pick winners or losers to post, but as this is the API thread:



And one to compare it to:




Both issued at 100p at a similar time (2004?), both spent time above 100p but much more below. Would seem to prove @giltedge's point. API in particular has spent 19 years almost halving in capital value (again, both ex dividends - BCPT's was paid uncovered for years).

And yes - this is all share price not NAV. Last NAV on API c.84p, last on BCPT c.118p. But you can't sell at NAV.