Aew Uk Long Lease Reit Share Discussion Threads

[cwa1] 08/10/2019 09:52

Morning petewy

Bigger ones today, stopped me selling out

I've dozed off at the back of the class...but what bigger ones are you referring to?

Cheers

[petewy] 08/10/2019 09:21

Bigger ones today, stopped me selling out

[spectoacc] 03/10/2019 08:48

A rare (small) director buy.

[spectoacc] 01/10/2019 14:17

Aye that was the case first thing this morning, presumably some trades we're not seeing yet. First positive sign for a long while!

[hugepants] 01/10/2019 12:08

Cannot purchase at the sell price now. Quoting 71p to buy

[chucko1] 27/9/2019 21:11

Very cheap - but very out of favour. Seems someone cannot take the pain, or rather, quite a few.

But I do agree that the Board should not have allowed this to be the outcome, or at least comment on the current situation.

[spectoacc] 27/9/2019 17:19

I don't see how they can get bigger in truth, when NAV discount so wide, and amateurish Board have already rejected all the other options in the review.

But - they're cheap IMO, very cheap considering the index-linking.

[edinandy] 27/9/2019 17:12

I can see improvement in this pricing once the Board announce a new Manager and hopefully a nailed down strategy.

[spectoacc] 27/9/2019 16:42

They're well spread, but small enough such that any one tenant going pop can cause a problem. Particularly with an uncovered dividend next year already, thanks to Meridian's rent-free.

Saying all that - I've been adding below 70p. There's a lot in the price already IMO.

[hugepants] 27/9/2019 11:32

should be OK as long as none of the bigger tenants go under

[belgraviaboy] 27/9/2019 11:13

Speculative - but back in here for a few at 70p

[iggis] 27/8/2019 18:11

What a dog this has turned out to be. Questions need asking of the board.

[spectoacc] 27/8/2019 16:21

Still heavy selling, including under the bid.

At first I thought it was the manager who needed removing. Now I think it's the useless board. Why have a long review that ends in a fall to a much greater discount?

[skyship] 23/8/2019 14:27

AEW try again.....hope it bombs!

New AEW UK fund to reposition retail assets. Manager to raise £250m for fund that will convert retail property to other uses.

[spectoacc] 18/8/2019 18:53

Did buy back into AEWU too last week. I like AEWU but their shortish leases, currently an advantage (higher re-lets), are going to be a disadvantage if we're going into recession. The yield/growing rents/discount make it a good long atm tho IMO - feels like it's slipped too far.

(I note even the sector star, BBOX, has been slipping lately).

[skyship] 18/8/2019 14:36

Specto - trying to disregard your overweight position here, which way would you have stepped when I was weighing up AEWL & AEWU last week, then deciding on AEWU @ 90p rather than AEWL @ 75.5p or slightly less?

[williamcooper104] 18/8/2019 14:06

Agree - for AEWL to really work it needs to be much larger and cannot see how that happens with current discount to NAV Valid point on the "strong covenant" point - chartered surveyors aren't generally very good on credit The covenant probably had a descent Dun & Bradstreet grading (valuers place to much faith in this) - Of course D&B is a box ticking tool/analysis which doesn't tell you much (it's got some use at a portfolio level but much less so when looking at individual tenant)

[spectoacc] 18/8/2019 14:05

Aye I've no idea, but I do know they've gone unmentioned. I once bought a commercial unit, in seemingly very good condition on hand-back, where the negotiated dilaps came to more than half the price we'd paid. Not suggesting they're multi millions here but after that length of time, could have been significant.

Bye-the-bye now - Meridian hasn't ended too badly, & got to hope there's alternative uses for anything else that falls vacant, even if the likes of car showrooms and care homes tend to be single use.

I still say there's a lot accounted for in that discount to NAV. But then I would say that :)

[williamcooper104] 18/8/2019 14:01

Delaps in an industrial unit (if rentalised at shell which it probably is) are not as large as for an office (part of the reason why industrial now valued higher than offices) But yep - they probably dodged a liability - don't know how much they are investing in their demise though which would in part counter that

[spectoacc] 18/8/2019 13:56

All valid points but "Investment value well supported by vacant value" doesn't say 30% less to me - also not sure what happens to dilaps with the effective change of tenant, particularly when in occupation for 30 years - could be talking big numbers.

Also the "strong covenant" comment.

And the fact it's all still on the webpage!

AEWL need to get larger, spread the costs, spread the risk, but are hamstrung by trading so far below NAV. Is a pity the Board didn't take any offers more seriously, since there's a fair SDRT saving from buying out the co rather than selling assets.

Again tho - I'm very long AEWL. When you have half the world trading at negative yields, the differential starts to look pretty good.

[williamcooper104] 17/8/2019 16:49

Thanks for that I would be much more class half full than you on the VPV/"well supported" point On a newly purchased asset VPV is always going to be at least 30 percent less than Investment Value - it would need to be hyper reversionary to be otherwise (eg a ground rent) A rough rule of thump for VPV is that's it's about 50 percent of investment value However I've seen many examples (particularly artificially arranged sale and leasebacks) where it has been as low as 5-10 percent - so I would say that management were being honest when they made that comment (though clearly they should have made it clearer so there was no doubt)Agree with you on some of the other assets - and in a recession there will be more defaults But then a commercial ground rent has just gone under offer as a sub 2 percent NIY - so it's a question of how low rates go relative to how much income falls away in a recession And the next recession could well see a fair bit of inflation if the pound tanks I've put this on my watch list - currently super long US REITs and waiting to re-balance to UK when we know what's happening with brexit This one has to be a target at some point for a Crystal Amber The assets are generally small and shouldn't be that hard to sell

[skyship] 17/8/2019 16:28

Well, sorry to say, but having been out of both AEWL & AEWU and watching both closely for a cheap re-entry; I plumped for AEWU when they dropped back to 90p at the end of the week.

I suspect AEWL may be under a bit of a cloud for a little while longer; and with AEWU yielding 8.84%, couldn't pass that up!

[spectoacc] 17/8/2019 16:12

@Williamcooper104 - no, clearly not. Conclusion to strategic review barely a week ago.

Question for me is - are there any more Meridian Metals? Where the manager claims the covenant is strong and the price paid is well supported by vacant value. Within barely a year, Meridian goes bust and the vacant value turns out to be c.£4m less than they paid.

Yes, it's turned out OK - lose a year's rent, but get a (hopefully) genuinely better covenant from a larger group. But not enough assets in AEWL to cope with many of those IMO, and we're not even in the recession we're no doubt due.

Again - this is the website:
This is what they STILL say about Meridian purchase:
"Fully let to the strong covenant of Meridian Metals who have been in occupation for c. 30 Years, as at January 2018"
"New 15 year lease providing 5 yearly RPI linked reviews"
"Investment value well supported by vacant possession value"

It's that last part that says they have to go as manager.

A reminder:
"-- On 3 April 2019, the Group announced that MMT, the tenant occupying three industrial assets, had appointed Administrators. As a consequence, the value of the three assets have been included in the 31 March 2019 valuation at their vacant possession value of GBP6.80 million, a fall of GBP3.95 million from the 31 December 2018 valuation "

Perhaps Alex Short would like to explain to shareholders how "..Well supported by..." actually meant a fall from nearly £11m to under £7m?

Yes, it turned out OK. No, I don't believe most of the other assets are much different if it came to vacant values, particularly in a recession. To pick one - Motorpoint occupy a 68,000sqft site in Birmingham, AEWL paid £8m for it, just under 6% yield. Or the couple of care homes. Or the Audi showroom site. All may be fine, none are great sectors or immune from problems.

I'm over-long AEWL because it's on a fat discount, a decent yield, and plenty of RPI-linked rents, which makes them look a bargain next to anything "Linker". But I wouldn't buy it at NAV.

[williamcooper104] 17/8/2019 15:31

A dog with a long lease is still a dog Question is whether somebody might take this one off shareholders hands at something close to NAV

[skyship] 14/8/2019 15:41

With the cost of professional advisers of all colours, personally I thought £32k was cheap!