Aew Uk Long Lease Reit Share Discussion Threads

[hindsight] 04/3/2020 10:47

Skyship, as your wedded to the sector could you please point out any other potential happy marriages one should research

[skyship] 03/3/2020 10:07

Link to the new AIRE thread:

[skyship] 02/3/2020 18:00

CWA1 - The new ticker AIRE is up tomorrow.

I'm perfectly happy to do it and maintain it as I'm wedded to the sector; but if you would like to do so, then please confirm and I'll leave it to you...

[williamcooper104] 02/3/2020 17:40

Aewl is tempting But the leases are worth little without decent properties and/or quality tenants And the mixture of car show rooms, regional hotels and care homes isn't filling me with confidence

[jonwig] 02/3/2020 16:30

CWA1 - I'd be obliged if you would!

[cwa1] 02/3/2020 16:27

If no-one else is keen to, I'll go for it and do my best to maintain it.

Remind me when the new ticker is up if I haven't already done it ;-)

[jonwig] 02/3/2020 16:24

Skyship - can do, but can't promise to maintain it (ie. update header with holdings, etc.) as I'm no longer interested in this.

Better that you do it and link to this for history.

[skyship] 02/3/2020 15:37

Name change to Alternative Income REIT (AIRE) as of tomorrow.

Jonwig - will you start the new thread? (Will leave messages for him elsewhere too.)

[skyship] 02/3/2020 13:57

Specto - sent you a private message...

[chucko1] 02/3/2020 13:53

Even better is that AEWL has barely shifted lower in the recent meltdown. No more than 4%. In blue-chips, even the best is down 10%.

[edinandy] 02/3/2020 13:34

I agree with the majority however looking up Mason Owen they are property advisors (agents) looking for fee income. I suspect they will be encouraging sales to make up for their lost fee income.

[spectoacc] 02/3/2020 13:25

Thanks @Sky. Can't say I disagree with any of that (but I would say that).

A change of name to LXI Reit would help ;)

[skyship] 02/3/2020 13:09

Simon Thompson tips AEWL in his IC Online article today. He concludes:

Investors have been rightly cautious since then especially as the company only listed its shares on the premium segment of the London Stock Exchange in June 2017, so has a short track record. But with overheads cut, and the rent free period coming to an end, there is an opportunity to lock into a secure dividend yield of 7.8 per cent and benefit from the expertise of Mason Owen. The manager works with the likes of Lxi REIT (LXI), LondonMetric Property (LMP) and Assura (Agr), companies which are rated on hefty share price premiums to net asset value (NAV).

That’s worth bearing in mind given that AEW’s share price trades 23 per cent below EPRA NAV of 94.63p even though the company has a modestly geared balance sheet (36 per cent loan-to-value ratio), 100 per cent occupancy rate and a weighted average unexpired lease term of 20 years to the next break. The board will also be changing the company’s name, details of which will be announced shortly.

Having advised buying the shares just above the current price in my October 2019 Alpha Report, I feel that AEW’s share price discount to NAV should narrow markedly in the coming year to complement returns from four quarterly dividends of 1.375p a share. Buy.

[nickrl] 26/2/2020 09:47

Are Liberium factoring in the Metal Trading Ltd income of 0.659m pa which kicks in later this year?

Also when you look at Table 14 it shows lease income for years 2-5 being above the run rate for year 1 which is unusual for property companies although with AEWLs longer leases its not unreasonable. However, given they quote 6.78m as annual rental income of portfolio and even allowing generous 3% pa uplifts you get c29m at end of year 5 not the 34m they are quoting?

[davebowler] 26/2/2020 09:03

Liberum:AEW UK Long Lease REIT Board targets 50% reduction in advisory costs Mkt Cap £60m | Prem/(disc) -20.6% | Div yield 7.4%EventAEW UK Long lease REIT has appointed Mason Owen and Partners as the company's investment adviser with effect from 9 April 2020 (taking over from AEW UK Investment Management). Mason Owen and Partners was established in 1967 and is a full service agency that manages £500m of property. King Capital Consulting has been appointed as the consultant portfolio manager. King Capital is led by David King, non-executive Chairman of CBRE Asset Management Services. In addition, a number of other service providers to the REIT have changed with the appointment of a new AIFM (Langham Hall Fund Management LLP), Company Secretary (Hanway Advisory Limited) and administrator (Westlake Clark Limited). The board expects the dividend to be fully cash covered from 1 July 2020. It also expects the changes to the company's service providers will achieve a 50% cost saving of the historic level of recurring annual overheads. Separately, the interim results for the period to December 2019 were published today. All of the main figures were previously reported in the Q4 update. NAV total return in the half-year was 2.7%. EPRA EPS rose 6.6% to 2.87p (six months to 31 December 2018: 2.69p). This includes non-cash items such as accruals to reflect minimum contracted uplifts over the term of the leases. Cash dividend cover was 0.81x for the period.?Liberum viewThe individual fee levels on the new agreements have not been disclosed but the targeted 50% decrease in service provider costs appears ambitious. The existing investment manager is currently paid a management fee of 0.75% of NAV. In FY 2019 (June period end), total operating costs were £1.16m (1.5% of NAV), of which 47% related to the investment management fee. The achievement of a fully cash covered dividend requires an improvement in cash earnings of £0.57m pa from the run-rate Q4 2019 (0.87x cash covered dividend). The board has again reiterated its longer-term goal of growing the company but we see that as highly challenging given the current scale and rating. Real Estate 

[spectoacc] 26/2/2020 07:00

Agree with all comments above. Suspect the "..Raise more capital.." is nothing more than an aspiration, hence the move to significantly lower costs (&, as noted above, expertise). In theory, AEWL doesn't need purchase/sale expertise, it has its portfolio, it's paying out all (and currently more) of its income.

Again tho - the market adores the management at AEWU, and hates it at AEWL. Same management.

AEWL one of the few yet to revalue from the GE result, with a possible long overhang, but if you're in it for the yield and value, who cares.

[chucko1] 25/2/2020 22:15

What do you mean by “it”? I am interested in the rental payments, not, at this stage, the NAV. I assume that the contracted rental payments are long, and absent of a (further) credit event, will largely be inflation uplifted. Whether at the end of each term the same rent (and terms) can be achieved is secondary at this stage. That is an asset management exercise which they may, or may not, do well.

[edinandy] 25/2/2020 22:08

They have changed from a genuine IM to a property advisors. Who will make decisions on new acquisitions or raising capital? Or is this just a holding appointment?

[nickrl] 25/2/2020 21:44

So according to last annual report the AEW LLP got 544k so the replacement arrangements saving c270k or are there other costs that may reduce. Its great to see a REIT being so bold and booting out the IM and shows that a few more REIT directors ought to be terminating there current agreements.

[williamcooper104] 25/2/2020 21:27

It's not really index linked The rental streams (not super long) are The property reversion (eg value excluding the generally shortish committed rent stream) isn't at all index linked 100 year ground rents are genuinely index linked A 10 year RPI lease to a car showroom is not an index linked asset

[chucko1] 25/2/2020 16:43

7.43% yield and index linked. But they do need to avoid another credit issue. Perfectly reasonable valuation, and nowhere near a premium as opposed to a number of other REITs now.

Still hardly loved, but that’s a positive at this stage.

[edinandy] 25/2/2020 16:38

Problem is none of these changes will grow the vehicle so no reason for share price to grow. In addition, there is risk on the portfolio not hitting its values or what happens if another tenant goes bust? Just had a look at the assets on the website again and they don't look great (May just be the photos tho). Board have been poor here if this is the outcome of a genuine strategy review.Positive is that buying in now is a good yield. I bought in at 71p so happy enough for the moment.

[skyship] 25/2/2020 16:38

An outside possibility perhaps, but someone else could come in with a reverse bid and use it as a vehicle. Whatever, the yield will reward our patience...

[spectoacc] 25/2/2020 16:29

Indeed, except that they "examined all options", and this was the outcome. Chance of another review in say the next 5 years seems slim.

The costs cut is a positive, but like you, I fail to see how they'll raise any more capital, barring a sustained share price rise.