|Agreed, totally unlikely, especially with such high global liquidity.|
|Rubbish, but at the right yield ;)
One thing I do like with AEWU is the low gearing - although with the exception of perhaps RGL, most seem modestly geared. If anything could trip up the property ITs it'd be a return to a high rates world. Doesn't seem likely atm.|
|True what you both say, but no investment is without any risk. The managers are well-established and experienced, with a huge portfolio of property under their control. I am prepared to back their knowledge. I doubt that they would buy rubbish.|
|Yes, I'd agree with that|
|So far they seem to be fulfilling their mandate, but agreed re secondary.
For the time being, it does seem to be the place to be - demand outstripping supply in a lot of areas, and rental uplift on re-letting.
Of more concern for me (longer term) is degredation of the properties - yes, tenant-repairing, and dilapidations on lease expiry. But try getting dilapidations when your tenant's gone bust in a recession.
They - and plenty of others - yet to be tested in a downturn.|
|The problem with AEW is that they are buying a lot of secondary properties with very short leases or imminent break clauses, hence the high yields on their properties. If they cannot relet or add value to these properties the dividend will be unsustainable. It's rather early to see if they know what they are doing or just picking up loads of rubbish.|
|Yes, that yield will prove attractive. I've added another 60% to my position today. I've also added to RGL. Both have actually moved up since my purchases. Wonders will never cease.|
|Have a feeling this will be on more radars once it's paid divis for a full year, and has been ticking up nicely recently.|
|Small acquisition, yield below 8% but with rental uplift possibilities.
And a reminder of why I'm in:
"AEWU is currently paying a dividend of 8p per share p.a. and targets a total annual return, over the medium term, in excess of 12% on the IPO issue price, net of all fees."|
|RGL a recent poor performer; whereas the others still in a pack.
Personally I've ducked out of EPIC at prices up to 107p+ - will look to buy back again when offered below 105p...
free stock charts from uk.advfn.com|
|Reads well. Particularly like:
" The Company remains conservatively geared with a gross loan to value ratio of 19.4% (31 October 2016: 19.6%) and net loan to value ratio of 16.3% (31 October 2016: 12.1%)"
Obviously they won't be immune to a slump (vacancy rates, falling capital values) but they're the least geared I've seen.
"The part sale of the Company's holding in the AEW UK Core Property Fund completed in early February and we now have capital available for further investment. We continue to focus our origination efforts in locations that exhibit low levels of supply, with a particular focus on industrial premises, which we will look to acquire at prices close to vacant possession value and which will therefore be less vulnerable to capital erosion. We have a strong pipeline of assets under consideration and look forward to updating the market in respect of further acquisitions and the Core Fund holding in due course, as we continue to focus on delivering investors an attractive level of dividend."
All things I like to hear.
Vacancy rate 9%, falling to 7% after an impending disposal, falling to 5% for space under contract. Would like to see it lower still, but otherwise glad to be back in. Sold out previously over the slump in AEW fund valuation post-Brexit but that's no longer a problem.|
|Recently gone back into AEWU. Have too many REITs/property plays already, but have to say they're all doing reasonably well, and just can't resist this dividend.|
|That all reads very positively. The properties under offer to let should just about take care of the remaining cover needed for the dividend. After that, it's all about capital growth and they seem to have a strategy for dealing with that. Happy to hold 8% yield is just too good to give up.|
|NAV Update and Dividend Declaration - HTTP://www.investegate.co.uk/aew-uk-reit-plc--aewu-/rns/nav-update-and-dividend-declaration/201611151122302272P/
NET ASSET VALUE
The Company's unaudited NAV as at 31 October 2016 was £118.05 million, or 95.47 pence per share. This reflects an increase of 0.95% per share compared with the NAV as at 31 July 2016, or a NAV total return, including the first interim dividend for the period from 1 May 2016 to 31 July 2016 of 2.0 pence per share, of 3.13%. As at 31 October 2016, the Company owned investment properties with a fair value of £125.88 million.
The Company today announces an interim dividend of 2.0 pence per share for the period from 1 August 2016 to 31 October 2016. The dividend payment will be made on 31 December 2016 to shareholders on the register as at 25 November 2016. The ex-dividend date will be 24 November 2016.
The dividend of 2.0 pence per share will be designated 1.60 pence per share as an interim property income distribution ('PID') and 0.40 pence per share as an interim ordinary dividend ('non-PID').
The actual earnings per share for this period were 1.95 pence as a result of a reduction in the dividend received from the Core Fund. As noted above, the Company will look to sell down its holding in the Core Fund and reinvest the proceeds from any sale into direct property holdings. The Board of Directors continues to express confidence in the Company's continued ability to meet the 2.0 pence per quarter target dividend payment from property income based upon the existing assets. In addition, asset management initiatives continue to add to the Company's income stream. Investors should note that this target is for illustrative purposes only, based on current market conditions and is not intended to be, and should not be taken as, a profit forecast or estimate. Actual returns cannot be predicted and may differ materially from this illustrative figure. There can be no assurance that the target will be met or that any dividend or total return will be achieved.
Alex Short, Portfolio Manager, AEW UK REIT, commented:
"We have now seen two valuation dates since the referendum result in June and are encouraged by how the value of the portfolio has stabilised and also by its resilience to market uncertainty. Since July our valuers have removed their caveat reflecting a lack of post-Brexit transactional evidence from our valuations and have also applied a modest level of post-Brexit capital growth. Trading in the Company's shares has also been stable over the last quarter with a consistent premium being maintained which has allowed us to raise £6m in new equity from tap issues. The net proceeds of the share issues, and debt facility up to 20% loan to GAV, are under offer on new acquisitions in the industrial sector.
Across the portfolio we continue to see the occupier market remaining active, with robust levels of tenant demand. As a result, 40% of the portfolio's current vacancy is now under offer including units in Oxford, Sheffield and Salisbury. Once completed, these lettings, with an income stream totalling over £400,000 pa, will reduce the current portfolio vacancy from 8.70% of ERV to 3.5%. In locations where this occupier demand is coupled with a shortage of good quality supply we are seeing rental value uplift which gives confidence in the portfolio and has been additive to value. Examples of this include Queen Square in Bristol where new lettings have been achieved above the valuer's estimate of rental value. Also at Fargate in Sheffield, highlighting the success of our strategy to invest only in major retail centres, we have seen some significant rental value growth due to nearby recent lettings which is contrary to the national trend.
Conscious of an uncertain global economic backdrop, defensive downside protection remains a focus of our stock selection process with a focus on investment values that are underwritten by replacement cost, vacant possession and alternative use values and therefore less exposed to capital erosion. In addition to this we are looking to lengthen income steams where possible and we are currently in negotiation with the portfolio's largest tenant occupying a distribution warehouse close to the M1 who has lease events both this year and next; supply in this location is tight due to a lack of development and we believe the tenant in question is wedded to the surrounding area. We are also seeing many examples where a less proactive approach is required due to tenants not operating break clauses or remaining in occupation post expiry, again often due to a lack of supply highlighted by AEW at acquisition. The portfolio's second largest tenant, The Secretary of State for Communities and Local Government, did not option a break in June and during the last quarter Wella, the portfolio's fifth largest tenant, removed a break clause from their lease in Basingstoke.
As a precursor to a more stable view on pricing, the Investment market has seen a healthy level of activity since the end of the summer and is currently showing a strong pipeline of opportunities suitable for the future growth of the strategy. With this in mind, approval has been given by the Board of Directors to sell down the Company's Core Fund holding (at NAV or better) at an appropriate time now that pricing has returned to offer. Although this holding was particularly accretive to performance during the ramp-up phase, with a more mature portfolio the holding is now less relevant to the Company's strategy and the intention will be to reinvest the proceeds from any sale as quickly as possible back into direct property holdings".|
|Failed to nick a penny and now out, but happy to sit out for the time being. Tap issue RNS yesterday, at first glance looks a good price (97p) but actually they get the divi backdated, ie they actually paid 95p, which is approx. NAV by my estimate, and the highest price I'd be minded to buy back in at.|
|Have sold a few, since the last NAV didn't take account of the divi, ie c.94.5p is now c.92.5p today on XD day. It'll recover that in income over the next 3 months of course, but just trying to nick a penny or two.|
|2p XD today. Nice that it's a quarterly payer - never more than 3 months until the next 2p.|
|Fair point SteMiS, but no investment is risk free, especially one with an 8% yield. I reckon the risk / reward balance here is acceptable. If they can do more deals like Bristol, then the balance is in our favour.|
|@STeMiS - they seem to be doing OK on that front so far, but it's a fair point - in a recession that could well happen. They would of course have 6 months of empty rates relief before Empty Rates became an issue (industrial use; 3 months for offices. Both mitigable to some extent, but not cost-free). Of more importance is being able to re-let quickly, and at the same or higher levels.
Suspect they'll be buying more shortly too - personally I don't want to see them get too geared.|
|The problem is is that many of the properties are on leases with very little time remaining on them. If AEW are unable to relet them then rental income will fall and empty property rates will be payable meaning the dividend will have to be cut.|
|94.57p so "almost full asset backing" maybe more appropriate ;) But when much of the NAV fall due to that daft AEW UK Core Property Fund moving from single price to offer/bid, can't say it's too concerning. Welcome aboard and good luck to us.
Of more interest is the divi being covered by revenues, & seems they're well aware of the importance of that.|
|Finally bought into these this morning. This is never going to be a stellar performer, but an 8% yield paid quarterly, with full asset backing, is going to be hard to beat.|
|Been some good buys on it since the results, slightly surprised now it's clearly trading above NAV. Still - they reiterated the dividend target and where else can you get over 8% yield.
Still - I'd like to see some more evidence of the value-added management, and see that reflected in a rising NAV. Writing off acquisition costs vs NAV is going to be painful in a flat property market.
One more positive - gearing is very low. I'll be watching out for them trying to increase it, I'm quite happy with it remaining low.|
|Not sure what to make of this morning's RNS - mostly positive, eg:
"...Returns in strong UK regional locations remains positive for the foreseeable future. AEW UK REIT's low level of gearing and the strength of its covenants gives us confidence that, by continuing to focus on income producing assets, it can continue to deliver on its stated dividend policy across the portfolio and generate market-leading total returns to shareholders."
But countered by a NAV fall due mostly to something I wasn't aware of:
" The value of the REIT's interest in the AEW UK Core Property Fund ("the Core Fund") is now 14.4% below its value as at 30 April 2016 despite the underlying fall in value of the property held by the Core Fund being only 2.6% down. This is predominantly a result of the Manager's movement of the fund's swinging single price from offer to bid and also the application of a further dilution levy of 5% to the funds overall pricing"|