Aew Uk Long Lease Reit Share Discussion Threads

[sleepy] 03/4/2019 23:23

Interesting that they were valued at £10.75m at 31 December last - presumably by Knight Frank

Does that have implications for other valuations?

[sleepy] 03/4/2019 22:20

There was presumably at least one good reason why they put over £10 million into Meridian’s properties on a 6.0% yield but I don’t see it

[sleepy] 03/4/2019 21:53

Companies House link for Meridian -

[sleepy] 03/4/2019 21:21

From 26 April 2018 Update

Portfolio activity

Gazebrook Industrial Park, Dudley and Provincial Park, Sheffield

In January, the Group completed the acquisition of a set of two industrial units in Dudley and Sheffield for £10.14 million. Both properties are let to Meridian Metal Trading Ltd on 15-year leases and subject to five yearly rent reviews linked to RPI, with annual uplifts between 1% and 4%. The first property, Works 1 and Works 2 are located in Gazebrook Industrial Park, Dudley, and total 137,002 sq ft. The Park enjoys good transport links, located in close proximity to the A461 and Junction 2 of the M5. The second property in the portfolio is a 33,405 sq ft unit in Provincial Park, Sheffield. The Park comprises a large warehouse and distribution facility with several smaller units located around the perimeter. The site has excellent connectivity to the M1. The total portfolio has a weighted average unexpired lease term of 15 years to expiry and reflects a net initial yield of 6.0%.

[getscenic] 03/4/2019 21:04

edit JW you forgot the "To Let" sign

[jonwig] 03/4/2019 20:23

Meridian Dudley:

[horndean eagle] 03/4/2019 19:42

I don't think really fancied so much concentration risk but fund raising was poor and they never raised anywhere near what they were after. The portfolio isn't great though. Better served just buying up hotels on long leases as others have done.

[davebowler] 03/4/2019 14:47

3(rd) April 2019

AEW UK Long Lease REIT Plc notes the news that Meridian Metal Trading Ltd ("Meridian"), a tenant of the Group, has appointed Allan Graham and Matthew Ingram of Duff and Phelps as Joint Administrators.

Meridian occupy two industrial assets within the AEWL portfolio located in Dudley, West Midlands and Sheffield. The annual passing rental income of GBP659,000 from Meridian, represented just under 10 per cent. of the Group's total annual rental income as at 31 December 2018. All rent owed by Meridian to the Group has been fully paid to date including a payment made on 26 March for the quarter ending 24 June 2019.

As at 31 December 2018, the two properties were valued at GBP10.75 million, representing approximately 9.4 per cent. of AEWL's property portfolio. The vacant value of the two properties as assessed by the Group's independent valuers, Knight Frank, is approximately GBP6.8 million. AEW currently awaits further news in relation to whether a buyer of the business can be found and Joint Administrators advise that interested parties have been asked to come forward before close of business this Friday. If not, then the vacant value position indicates an expected negative impact on the Group's NAV from this news of approximately 4 pence per share. If the properties do become vacant, the impact on AEWL earnings will also be negative.

Further announcements will be made as appropriate.

[spectoacc] 03/4/2019 14:40

Attempted to copy/paste the tenants but hasn't formatted well. Suffice to say, Meridian Metal at the top.

Others:
Prime Life Ltd
Mears Group (!)
Juniper Hotels
Motorpoint Ltd
Premier Inn
Handsale Ltd
VW UK
Travelodge
Hoddesdon Energy Ltd

That makes up just over 75% of the rent roll (65% if no good resolution on Meridian).

Again - industrial has been going gangbusters, if the vacant value of the two Meridian buildings are really c.£4m less than their current book value, that's not good news.

I remain not a holder.

[spectoacc] 03/4/2019 14:08

Have to say, I'm surprised the vacant value is so low, relative to the NAV value - they must be fairly naff
buildings.

"As at 31 December 2018, the two properties were valued at GBP10.75 million, representing approximately 9.4 per cent. of AEWL's property portfolio. The vacant value of the two properties as assessed by the Group's independent valuers, Knight Frank, is approximately GBP6.8 million. AEW currently awaits further news in relation to whether a buyer of the business can be found and Joint Administrators advise that interested parties have been asked to come forward before close of business this Friday. If not, then the vacant value position indicates an expected negative impact on the Group's NAV from this news of approximately 4 pence per share. If the properties do become vacant, the impact on AEWL earnings will also be negative."

[chucko1] 03/4/2019 11:43

AEW are a good property company, but this particular fund never seemed to reach escape velocity. The administrators may find a buyer for Meridian, or AEW may find that the two properties relet readily. But the fund is not really in great shape whatever happens.

[spectoacc] 03/4/2019 11:40

A point I've previously made on here. "Long lease" is all well & good, until a recession hits and tenants go pop (& not even had the recession yet).

[dendria] 03/4/2019 11:30

That's the risk with being small scale. Market cap is only ~£70M and they only have 17 properties. 3 of them in 'leisure' which I wouldn't touch.

[orinocor] 03/4/2019 10:55

Just terrible. Is 10% with one tenant normal.

[dendria] 03/4/2019 10:44

You might have thought long-lease carried less risk but not when a key tenant goes into administration – Meridian accounted for around 10% AEWL income.

I see the 31 Dec 2018, valuation of the Meridian properties was £10.75M, whereas the current vacant valuation of the properties by Knight Frank is £6.8M.

[spectoacc] 27/2/2019 08:13

Everything reads well this morning in fairness, EXCEPT for saying they're looking to raise more money - how will that not be dilutory, with shares currently below NAV?

[Edit - rhetorical. I don't think they'll get it away at a premium, ie 97p+, and market saying the same. They're trapped as sub-scale, and see the way out as issuing more shares at well below NAV, diluting existing holders, just to try to get the company to a reasonable scale].

[spectoacc] 01/2/2019 09:03

Just doesn't appeal to me over AEWU.

[davebowler] 01/2/2019 08:47

Liberum;
AEW UK Long Lease REIT

Improving dividend cover

Mkt Cap £73m | Prem/(disc) -7.0% | Div yield 6.1%

Event

NAV rose by 2.0% to 97.5p per share at 31 December 2018 (September 2018: 95.6p). NAV total return in the period was 3.4% and over the last 12 months was 10.0%. The increase was driven by a 1.5% like-for-like revaluation gain. The portfolio sector split at 31 December 2018 was: Hotels 21.6%; Industrial 21.6%; Residential care homes 16.0%; Car showrooms 13.2%; Student accommodation 10.8%; Leisure 8.6%; Power station 4.4%; and Petrol station 3.8%.

EPRA earnings of 1.4p per share generated dividend cover of 1.03x in the quarter. Dividend cover over the half-year period was 0.98x. In January, the company completed a £6.7m care home acquisition. The acquisition was funded from the company's debt facility. The company's LTV ratio is 35% (maximum limit of 40%) and there is a further property under offer, which will be funded from the debt facility. We estimate the acquisition will increase recurring EPS by 0.2p per share and improve dividend cover by 0.04x.

[speedsgh] 31/10/2018 08:56

NAV Update and Dividend Declaration for the quarter ended 30 September 2018 -

AEW UK Long Lease REIT plc (LSE: AEWL) (the "Group"), which directly owns a diversified portfolio of 17 regional UK commercial property assets, announces its unaudited Net Asset Value ('NAV') and interim dividend for the quarter ended 30 September 2018.

Alex Short, Portfolio Manager, AEW UK Long Lease REIT, commented: "Across the portfolio, we have now seen two consecutive quarters of valuation growth, reflecting the strength of the individual assets that have been acquired and the favourable levels of pricing that we have been able to acquire them at. We currently see interesting purchasing opportunities in the market and are tracking a healthy pipeline across alternative and industrial property sectors."

Highlights

· EPRA earnings per share ("EPRA EPS") for the quarter of 1.27 pence per share (quarter to 30 June 2018: 1.25 pence per share).

· The Group today declares an interim dividend of 1.375 pence per share for the quarter ended 30 September 2018 bringing the total since IPO to 4.625) pence per share. This dividend is to be paid on 30 November 2018 to shareholders on the register on 9 November 2018. The Company targets an annual dividend of 5.5 pence per Share, with an ambition to grow in future years by the rate of inflation.

· At 30 September 2018, the fair value independent valuation of the property portfolio was £103.98 million (30 June 2018: £99.09 million), following one acquisition during the quarter which cost £3.94 million (see below). On a like-for-like basis, the valuation of the property portfolio increased by £0.95 million (0.96%) over the quarter (quarter to 30 June 2018: £3.43 million or 3.67%)

· Unaudited NAV increased to £76.94 million or 95.58 pence per share (30 June 2018: £76.42 million or 94.94 pence per share), an increase of 0.68%

· The IPO proceeds have now been fully invested, along with the £30 million of debt utilised. The Company has increased the available debt facility in order to make further acquisitions.

· Portfolio activity during the period included the acquisition of Eurolink Industrial Estate, Sittingbourne for £3.94 million on 13 September 2018. This property comprises two warehouse buildings totalling 43,636 sq ft let to Dore Metals Services Southern Ltd, which has had its headquarters on the site since 2007. The lease provides a new 15 year term expiring in September 2033 and has 5 yearly RPI linked rent reviews. The transaction reflects a net initial yield of 6.3%.

[belgraviaboy] 31/8/2018 12:31

Profit taken - however will keep on radar

[typo56] 10/8/2018 16:15

Large trade this afternoon. 9.2% of market cap.

[spangle93] 08/8/2018 17:26

Closing the gap to the increased NAV reported recently...

[horndean eagle] 18/7/2018 16:50

Today's nav increase was a bit of a whopper. Must imply a pretty sharp compression in yields for the assets they are playing. Rental growth would have been modest in the quarter. Property market outside of retail is still very bullish. Lots of money chasing assets and chase for yield is back on given rate expectations and treasury yields have backed off a fair bit.

[belgraviaboy] 18/7/2018 08:15

SpectoAcc

Always better the discuss the merits of an investment with someone who disagrees with you :-)

1) NAV can go down, as with any REIT. Like you I found this comment reassuring "the price paid for our assets has been well underpinned by our assessment of alternative use or vacant possession value" so I am not overly concerned.

2) I am expecting (and would welcome) a successful equity raise. They are sub-scale and need to get bigger. I expect, market conditions allowing, we will see it at the tail end of this year. By that time the quarterly dividends will be 1.375p and I expect the share price to be in the low 90's

3) I don't think the raise will be big enough for the stamp duty to have the same level of impact as when they started from scratch

Definately not the finished article, but probably the first step in the right direction.

On another note - thanks for pointing out RGL, I have been building a position over the last few days.