Aew Uk Long Lease Reit Share Discussion Threads

[jonwig] 06/6/2017 12:56

speeds - but the IPO proceeds are a lot lower, so they should get fully invested ahead of schedule. That might mean they can amend their divi tt.

[speedsgh] 06/6/2017 12:48

Maybe not overly surprising in view of time lag before fully invested & generating meaningful income for distribution. Prospectus forecast DPS 3.25p in current FY to Jun 2018, then DPS 5.50p in FY to Jun 2019 with ambition to grow by UK inflation rate thereafter.

From IPO prospectus...

DIVIDEND POLICY
Whilst not forming part of the Investment Objective or Investment Policy the Company will, once fully invested and levered, target an annual dividend of 5.5 pence per Share, with an ambition to grow in future years by the rate of UK inflation.

The Company intends that the net proceeds of the Initial Issue will be invested as rapidly as practicable following Initial Admission. The Investment Manager expects that the Company will be substantially fully invested within nine months following Initial Admission and will remain substantially fully invested thereafter.

Subject to market conditions, the financial position of the Company and the investment outlook, it is the Directors’ intention to pay quarterly dividends to Shareholders. Whilst not forming part of the Investment Objective or Investment Policy and assuming that the net proceeds of the Initial Issue are invested in accordance with the intended timetable described above, the Company will seek to target the following dividend payments:
* dividends totaling at least 3.25 pence per Share in respect of the period from Initial Admission to the first financial year end; and
* dividends totaling 5.5 pence per Share per annum in respect of subsequent financial periods with an ambition to grow in future years by the rate of inflation.

The Company intends to declare dividends in January, April, July and October of each year to be paid the following month. The Company intends to declare its first interim dividend in October 2017, to be paid in November 2017. On the basis of the expected investment period the Company is targeting the following dividends in respect of the first three quarters following Initial Admission:
* Initial Admission to 30 September 2017 – 0.5 pence per Share;
* 1 October 2017 to 31 December 2017 – 0.5 pence per Share; and
* 1 January 2018 to 31 March 2018 – 1 pence per Share.

The dividend for the quarter ending 30 June 2018 will be dependent on the speed of deployment of the net proceeds of the Initial Issue. In respect of the period commencing 1 July 2018 and subsequent periods, it is intended that the Company will declare a quarterly dividend of at least 1.375 pence per Share.

[spectoacc] 06/6/2017 12:19

I've a few seeing falls today but surely if election jitters, it'd be the sectors targeted by Corbyn - particularly the bus/rail operators.

Edit - from the number of sells at 100p, in funny sizes, it feels like HL users have set out to stag it. Could be a few weeks for it to feed through. I still say it should be trading over £1, compared to similar co's, and compared to AEWU's success.

[alan@bj] 06/6/2017 12:14

HL have credited my bonus shares, reducing my net cost to 99.2555 per share, so I'm just about break even at the moment. Stock Market having pre-election jitters?

[spectoacc] 06/6/2017 08:30

A poor start, expected better when AEWU is at 104p bid, vs NAV of c.95.5p. AEWL NAV should be around 98p.

May have to wait until its invested - AEWU took a long time to get going & was available at 94p a couple of times (ignoring the even lower Brexit fall).

[skyship] 02/6/2017 14:31

diamond - I too use that 10% as a MAX; though I exceed on rare occasions where the security and return seem to justify.

So currently the two propcos LSR & PCA; and the debt fund NBDG tick the boxes and I've gone higher - mainly because there are fewer and fewer VALUE plays providing secure 10%pa upside. There are reasonably active threads on all three...

[davebowler] 02/6/2017 10:06

!FOLLOWFEED

[jonwig] 02/6/2017 07:45

Maybe the nearest comparison is with LXI, who said this morning:

"The Company has now acquired nine assets, deploying just under 75% of its net equity, at an attractive blended net initial yield of 5.85% and with a long WAULT to first break of 23 years, since Admission on 27 February 2017. We are also in solicitors' hands on a number of additional forward funding and built transactions which will fully absorb the balance of the Company's net equity in short order."

That would be an average of £11.3m per asset. (I don't think they've yet taken any debt.) So the situation with AEWL might not be too constrained.

[mach100] 01/6/2017 22:45

Thanks Jonwig for your excellent explanations. I agree with the above comments and hope we get to 104p on open Tuesday. Re Specto's bear point the company is targeting under represented sectors in leisure and healthcare which will be smaller scale and therefore less expensive. Hopefully the company will be even more selective about its targets given the amount raised.

[diamond fibre] 01/6/2017 20:08

Also REMBER you should not invest know more than 10% of your portfolio in any one company.

[jonwig] 01/6/2017 14:47

Spec - a very good point! I looked, and maybe an answer is that 30% gearing (even 40%?) can be employed on GAV (and probably will be after this). So £78m equity plus 30% = £101m, allowing an increase to £10m per asset.

Did they anticipate a shortfall??

[spectoacc] 01/6/2017 08:30

Remembered a bear point for amount raised - "no one lot to be more than 10% of portfolio" and "expect average lot size to be £8m". So it could well be they've several £8m+ purchases lined up, none of which they can now buy. Hence "they'll get invested much sooner" may not apply as we think.

[tyranosaurus] 01/6/2017 08:02

LXI REIT were well short of their target and still did ok.
Happy to get all I applied for.

[spectoacc] 01/6/2017 07:40

Happy enough with that - the last one I did (DSM) also failed to get anywhere near their target, and still traded up at a decent premium. They should now get invested quickly, paying the divi sooner than planned, and that should give the track record to raise more funds.

Surprised at PRS too - really didn't fancy that one. Think people may be getting suckered by the govnt stake perhaps.

[jonwig] 01/6/2017 07:16

Result of issue: 80,500,000 shares vs target of 150,000,000 shares (and issuance programme of 300m shares). "Pleased to announce ..." - don't be daft!

The offering lacked excitement, and the oversubscribed PRS REIT may have grabbed some funds which will be returned to applicants. One pleasant thought - they should manage to be fully invested a lot earlier than planned!

[jonwig] 29/5/2017 06:24

Mach - a REIT's dividend comes out of rental income (a 'PID' taxed at 20%) but can also include other things, such as you suggest, which is paid out as an ordinary dividend (and taxable by the dividend rules). I've never come across "non-taxable return of capital" with property companies, as capital gains are subject to corporation tax.

If your REIT shares are within an ISA neither part is taxable (though some brokers pay the 80% and claim back the 20% later).

[mach100] 28/5/2017 22:58

Also joined you guys. I am never sure if these stories are genuine tips or just a friendly journo but I have done well out of another MOS recommendation BBOX so have taken a punt. At least there is some track record to go on and the long leases give some sort of visibility so must be attractive to pension funds et al.
I am not very clued up on these REITS so could any poster advise if some portion of the dividends paid out could constitute a non-taxable return of capital on which tax is deferred until the capital asset is sold?

[spectoacc] 28/5/2017 20:10

..Whereas I'm heavily over-invested in it!

Same article mentioned above also said c.85% inflation-protected.

I'm in, based mostly on the performance of AEWU.

[stemis] 28/5/2017 18:46

I've stuck an application in. If they can deliver 5.5% + inflation, it looks like a decent income stream. I'm pretty under-invested in the property sector so good diversification...

[spectoacc] 28/5/2017 17:35

Forgot to quote something I read on it the other day - aiming to be fully invested within 9 months, with a large pipeline already, so the 5.5% shouldn't be too far away.

If they don't get all they're after (& quite a few haven't recently) I'd expect the smaller amount to be invested before 9 months.

[spectoacc] 26/5/2017 12:06

If they paid out the 5.5% in year 1, before being fully invested, it'd likely only be a return of capital in fairness. Most seem to take time to reach full yield, even recent non-property ITs like JEFI.

[daveofdevon] 26/5/2017 11:57

Well I for one like the defensive characteristics and am happy to get rich slowly.

[cousin jack] 26/5/2017 10:11

The initial 12-18 month yield will be significantly below 5.5% as detailed in the prospectus, so this is probably not going to a quick premium. That may put some potential investors off but plenty of others will be happy to take the longer view. Thanks to Jonwig for highlighting the issue.