Aew Uk Long Lease Reit Share Discussion Threads

[chucko1] 07/2/2020 10:36

Perhaps they cut expenses. It’s not as though there’s a lot going on at central command, is there. Ghosts and cleaners only.

[2wild] 07/2/2020 09:55

Tempted to buy back in here. Although i can't understand how the cash dividend cover has increased dramatically over the quarter when they have made no property purchases or debt refinancing for well over a year and inflation,which the vast majority of rents are linked to, was running a about 0.5% a quarter. Perhaps they got one of those magic money trees which i have been hearing about.

[skyship] 06/2/2020 14:19

That is now c500k bought today twixt 72.50p-73.50p

[skyship] 06/2/2020 09:40

DB - thnx for posting that. I certainly agree with this "the longer term goal of growing the size of the company as challenging given the current scale and share rating". More like impossible I would say; so a trade sale still the most likely outcome.

Incidentally, I'd forgotten to update the share price on my spreadsheet, so the discount and yield previously posted were too low! I've now updated.

Sp now moving ahead marginally. So at the current offer price of 73.5p the discount = 22.3% and the yield = 7.5%. Purchases subject to SD of course.

[davebowler] 06/2/2020 09:25

Liberum:
 


AEW UK Long Lease REIT

Improving cash dividend cover

?

Real Estate 

AEW UK Long Lease REIT 

Improving cash dividend cover 

Mkt Cap £59m | Prem/(disc) -23.1% | Div yield 7.6%

Event

AEW UK Long Lease REIT's NAV per share at 31 December 2019 was 94.6p, representing a 1.6% NAV total return in Q4 2019. The portfolio valuation movement in the quarter was broadly flat after stripping out the recurring rent-smoothing charge and the reversal of a prior capex provision. The weighted average lease term to first break is 20 years. 

?

EPRA EPS for the quarter increased 12.9% from Q3 to 1.52p per share, representing a dividend cover of 1.11x for the quarter. This includes non-cash items such as accruals to reflect minimum contracted uplifts over the term of the leases. Cash dividend cover was 87% in the quarter (74% in Q3 2019).

The board intends to announce the actions it is taking to reduce costs with the aim of producing a fully cash covered dividend with effect from the financial year commencing 1 July 2020. The current manager's tenure will finish on 9 April. 

Liberum view

The company has generated a cumulative NAV total return of 2.9% in 2019. Performance in H1 was impacted by the Meridian Metal Trading administration. The cumulative NAV total return since inception in June 2017 is 7.3%. Acquisition costs have been a major drag on performance and have reduced NAV by 9.8%. These were largely in line with what the board and investors should have expected given the company's gearing target. We await the board's proposed actions but we see the longer term goal of growing the size of the company as challenging given the current scale and share rating. 

[skyship] 06/2/2020 08:58

CWA1 - nice to find myself in good company 😄

Specto - agreed, the BoD too self-interested by far; otherwise a deal would have been done at the time of the Review. To a certain extent I agree with Edinandy - our fate could be to live on as a Zombie; however more likely that we will get taken out at some stage, albeit at a c10% NAV discount.

Still, that would mean 85p - 17% up on where we are now!

I could live with that; in the meantime I'll enjoy the 7.4% yield...

[spectoacc] 06/2/2020 08:50

Figs were what I expected (it's dirt cheap and the best value REIT on LSE IMO) but continually dissappointed with the Board.

[cwa1] 06/2/2020 08:42

Well it's either great minds think alike or fools seldom differ...but I had a little top up this morning too. The figures seemed better than I expected. I expect, however, that the share price won't gain much traction until the way forward with management, intentions, etc. are clearer.

[edinandy] 06/2/2020 08:41

In order to keep costs down, I suspect manager will be a small and just focus on ensure existing assets are managed. They may recycle a few. As long as no clangers it could be ok for a couple of years. No new money for growth will come in so might end up a zombie reit.

[skyship] 06/2/2020 08:27

Well, I added this morning as the figures, both Dividend cover and NAV, were far better than I expected.

I had thought that they might temporarily cut the dividend so as to have full year cover; but the stats show not really necessary.

At 72.5p the discount = 23.4% & the yield = 7.6%.

[spectoacc] 06/2/2020 07:35

Yeah, 94p NAV, divi covered if you take the RPI/CPI accrual (87% covered by cash), 22 years to expiry on leases (avg 20 years to break), great.

But:

"Later this month, the Board will announce the actions it is taking to reduce the Group's costs with the objective of delivering a fully cash covered dividend with effect from the financial year commencing 1 July 2020, and the Board confirms that AEW UK's tenure as investment manager will cease on 9 April 2020. "


That's 8 weeks away, who the hell is going to be the next manager? On what terms? With what intentions?

[spectoacc] 04/2/2020 12:56

Agreed. Good job we have the fat divi.

[skyship] 04/2/2020 10:31

Offered again at 72.5p....look to be headed back to the 70p support.

[edinandy] 03/2/2020 16:38

Just to provide details in reasonable time would be good. Must have known the valuation etc in December. Poor and the worst delivery I have in my portfolio.

[eeza] 31/1/2020 11:46

If they had any good news it would have been release early.

[chucko1] 31/1/2020 11:26

Well quite, not for a portfolio this size and for one that has not changed the past few eons.

[edinandy] 31/1/2020 10:45

Be good if the Board could provide in time. It's not too complicated.

[skyship] 31/1/2020 09:49

Usually end Jan. (31st & 24th past 2yrs)

[edinandy] 31/1/2020 09:37

Does anyone know when their quarterly update is out? Most others have already circulated but I think this is my last one I'm waiting for.

[spectoacc] 25/1/2020 15:02

@Edinandy - answers to your questions very easy to find:


They have a manager, obvs. Who the next manager is going to be is the question. Personally I see it making very little difference.

And no, no new money is going to be raised. Why would it be when they're on such a discount?

Unfortunately, the ignorant Board rejected all previous overtures.

In the meantime, as @chucko1 says - enjoy the income. There's also the index-linking to enjoy of course.

[edinandy] 25/1/2020 13:53

Only lasts so long. Everyone needs to get out when the valuations start to turn. How good are these buildings? Quality of tenants? With no manager, who is looking after this? Won't take long before these are bad buys. Needs to raise new money ASAP.

[chucko1] 22/1/2020 11:33

This has been looking for a plan for a long time. But as long as the yield is maintained, it’s OK. As ever, if you had too much, you might not be feeling that way!

[edinandy] 22/1/2020 09:25

Needs a new manager, some direction and a plan ASAP.

[spectoacc] 22/1/2020 09:17

Chronically unloved.

[chucko1] 07/1/2020 17:04

I do like buying when the likelihood is that it is a forced seller. Same as RLE. There is always a chance that they know something that I do not, but that is not common, and I manage the risk anyway.

In the case of NRR and other things that were clearly (demonstrably) crushed in main part owing to a forced seller, the benefits of gradually wading in against the tide have been demonstrated. In the case of NRR, unfortunately, there was also an undercurrent of genuinely, although exaggerated, bad news. But for that, I would have bought a fair amount more.