Abrdn Property Income Share Discussion Threads

[spectoacc] 17/5/2023 06:48

Largely agree but the trouble with a view based (correctly) on energy prices being much lower, is what happens to energy prices in future.

[flyer61] 16/5/2023 16:42

That’s it nickrl….Britain muddles along..
For me, carry on!

[nickrl] 16/5/2023 16:04

Gas and thus electricity continue on a downward trajectory close to two year lows although because of the lookback used by OFGEM won't give an immediate boost for next qtrs energy cap but come autumn should be far more positive. ONS today have pay inflation running at 6-7% across Q1 so whilst not keeping up with CPI not too far behind. Several supermarkets have announced price cuts maybe worried CMA are going to come after them which will also help if sustained. So its possible that whilst growth will be very low there is enough momentum in the system to at least keep the wheels on and the rents coming in. So for those with no immediate debt refis and >90% covered divis it feels reasonable assured its sustainable for next 12-18mths. The bigger wave of refis are post 2024 and IR will be down by then even on a higher for longer scenario will result in manageable increased debt costs for most.

[spectoacc] 16/5/2023 15:16

@Dr B - the big concern would be recession. Contrary to what I thought last year, the economy's held up well. Lots of argument I won't go into here, but I'd say irrespective of your two possibilities (higher for longer, or both coming back), the trading position is the key for REITs IMO. As you say, if the rents keep coming in, plenty don't look expensive here.

[skyship] 16/5/2023 13:18

SNAP Pavey! I too have a rather active portfolio of 18 stocks. Biggest loser my Spec of the Year - TRIN - crazy cheap on a likely PER of just 4x. Biggest winner currently my overweight position in EBOX.

10% usually my MAX; but now at 14% in EBOX - which I still believe cheap on a 43% discount to their Sept'22 NAV. (Interims on Thursday).

2nd largest holding here in API - 10% allocation.

[dr biotech] 16/5/2023 11:45

It seems to me that there are two inflation options for UK plc over the next few years. Its either stays high, with higher than expected interest rates, or they both drop. I think a bit of inflation is probably what's needed to reduce the debt burden from Covid. I know that's going to be painful but physical assets should rise or at least not fall significantly from here - commercial property has already taken an exceptional hit (I know that's not a guarantee against further falls). If it falls then we may not get asset inflation, but hopefully the rents would cover the interest charges and the yield would lead to a narrowing of the current gap. Over simplistic thinking I know, but I feel we can't have much longer to go down the falling asset prices with high inflation road to go.

And I'm already 2% up on my recent purchase. Woohoo. FWIW I have just over 30 individual shares.

[pavey ark] 16/5/2023 11:03

I have an active portfolio of 18 shares (some more active than others) and I like to post/exchange views ..... since December 2022 I have posted 200 times ....I note that there are posters here who have posted 200 times since early March and one who has posted 200 times(on various bbs) since early April !!!........it's good to have a hobby or is it a hobbyhorse.

So, back in the real world, it looks like anything over 52p is a buy but I expect a bit of a reaction when it goes ex dividend......"he who dares Rodney"

My view here is 6 to 9 months then it may be decision time .....regular dividend payments help but rather obviously I expect to make money here or I wouldn't buy.

[spectoacc] 16/5/2023 06:50

@nicrkl - they've been reducing CapEx qtr of qtr in order to get anywhere near divi coverage. There's some unavoidable CapEx coming up, but got to wonder the sense of cutting back elsewhere, rather than reducing the divi to something sustainable.

Is an earnings yield of c.7% a good buy in this market? It was once. Depends on view of the future risk-free I guess, and of course, Opportunity Cost.

[pavey ark] 15/5/2023 23:29

Just spotted your post but my first impression is that you are painting with a broad brush.As I actually do buy ( and sell ) shares I am more than happy to add having spent some time looking into the fine detail.I have never underestimated the effect of increased interest charges and your figure for this is the only figure in your post that looks close to mine.........you should be close with this as you have gone on about it at length.It is not my purpose to debate the pros and cons of investing in API but having made a very good return from this share over the years I would perhaps suggest that anyone thinking of buying should look at the entire picture.Took a 10k top up today at a hair over 50p .

[nickrl] 15/5/2023 22:56

@pavey ark interest charges are up 3.8m based on what was reported at q1 nav over a full year. I reckon inv fee would be down 300k may also save a couple 100k based on reduced voids from recent lettings. The divi needs 15.25m based on held paymnent but my s/sht says 13m is free cash but i might be underestimating NRI as it wasn't reported at Q1 so its my best guestimate based on recent lettings. So my divi cover below 90% and can't see them achieving coverage in next two years but if it was clearly on an upward path i would be minded to take a few.

[hindsight] 15/5/2023 17:21

Yep a overweight reit too. Spreadsheet agrees. If commercial falls as much or more than this is pricing think we will be in grip of recession and rates will be heading south

[skyship] 15/5/2023 16:49

Pavey - thnx for the number-crunching.

I think we can all take it as a given that the divi will be held; may not be increased, but will certainly NOT be trimmed.

So, at 51p, with a discount of 38% and a yield of 7.8%; I am happy to be overweight.

[pavey ark] 15/5/2023 16:00

More numbers today....(certainly subject to scrutiny)

I made the average total asset value for last year to be c. £516m and when the management fee rates were applied....sure enough I got very close to the published £3.6m.

Q1 total asset figure is £455m and if the reduced fee structure is applied and the asset value remains close to this figure I get £2.73m ....a saving of c. £870k

The total dividends paid last year was £15.61m
With the full advantage of the share buyback we have £15.24m....a saving of £370k

UKCM said that the 95% dividend was "substantially covered"
API have said (more than once) that the dividend for the next two years will be "substantially covered"

5% dividend cover is £760k .....not ideal but should be seen in the context of the assets and cash.

In addition to the figures above API have said that there is £6m of upside in rent collection increase in the portfolio......obviously they are aiming for the top here and even if the potential is there it couldn't all be realised this year but rent revisions, fall in vacancy and development projects coming on stream have to be taken into account.......AND the increased costs from the increased interest payments.

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

[skyship] 13/5/2023 07:19

speedsgh - many thanks for all your performances work; and for sharing the results of quite a time-consuming task.

[hindsight] 12/5/2023 18:20

speedsgn, thx , I would not try to defend the poor NAV growth
However I would make the point, that those that brought when the discount was wide did ok. Sell physical and buy heavily discounted reits, then reverse when discounts close.


18/12/2003 was max range I could get

[skyship] 12/5/2023 18:11

Had the same from the concierge in an Italian hotel a few years ago. Italy & Greece in the front line of illegal immigration; and the EU doing darned little to assist.

Most of those immigrants just passing through as headed into Northern Europe where they speak the languages, especially English.

[spectoacc] 12/5/2023 17:18

@Flyers61 - in antiquity? ;)

Good luck API buyers - I'm not one.

Assume yesterday's post-NAV calls have encouraged a few to cut.

One of several starting to drop through recent lows.

[flyer61] 12/5/2023 17:03

Had this at a 5 star hotel in Athens last month….the bell hop(actually a 50 year old man) went on about the city being invaded by outsiders…..

[dr biotech] 12/5/2023 16:44

Well I added £5k just before the close. I'm looking at jacking in the day job in the next few years and if I averaged 8% across my entire holdings I'd be able to go to both Rhodes and SW France

I've been to Rhodes twice, about 20 years apart. I've had two tours of the Old Town, first was with a decent sound and light show that was stopped during the greek financial crises. Second tour was by a guide that hated immigrants and was possibly the worst tour guide I've ever had. Knew all the dates when the buildings were put up (or just made them up, I mean who gives a toss if it was built in 1832 or 1894?, he never told us any history) and told us again that he hated immigrants. All I remember was that he hated immigrants (not tourists apparently). Must have told us every 10mins. Bit like reading this post.

[cwa1] 12/5/2023 16:22

Indeed , there does seem to be a persistent seller about but, as ever, it's a double edged sword that lets those that are interedted buy some more cheaply than we might've otherwise have done. The only question is: is there still stacks to go from the seller and will they crater the price just to get out(thus making this share price look expensive rather than cheap!)?

[cc2014] 12/5/2023 16:11

Quite a persistent seller this afternoon.

[skyship] 12/5/2023 15:53

CWA1 - Glad you too seeing the value here.

Flyer - sounds very pleasant. A bit cooler here in SW France; and this month wet, wet, wet!

[ghhghh] 12/5/2023 15:53

Ghhghh….agreeon the replacemeny cost however I think any reduction in interest rates IMHO is more than months off…maybe a year from now.

Possibly but no one knows how this plays out. Interest rates, reducing money supply and credit squeezes are impossible to model in combination.

And history suggests that REITs will rally well ahead of interest rates falling

[cwa1] 12/5/2023 15:48

FWIW I've just taken a few here at a little bit under 51p. It's not exactly top of my conviction list but it sports, hopefully, a decent yield, reasonable discount and very recent news that wasn't scandalously bad. Oh and I like to keep you lot company too ;-)

[flyer61] 12/5/2023 15:37

Typed on my phone on a beach in Rhodes…beer in hand…