Based on Q4 2022/3 EPRA earnings per share of 1.77 and sales and purchases post y/e, which have raised a net £10.83m for a loss of £417k rental, I reckon AEWU are around £1.874m pa short of full dividend cover. However with c.£15m left to invest, I reckon we should get to 95% cover without the benefit of rent reviews and property management. So I see the prospect of a dividend cut unlikely.
In that respect, I note the statement in their last annual accounts
"We are pleased that NAV per share has grown in the latest quarter and are confident that the Company's track record of outperformance, robust positioning and the reliable payment of an eight pence annual dividend for the past seven consecutive years will stand it in good stead once market sentiment recovers." |
Back to the 50dma and back to a pound looks fairly imminent (hopefully) :-) |
Any idea if 27 Tanner Row is included in the acquisition?
www.loopnet.co.uk/Listing/27-Tanner-Row-York/22486319/
See next post by CWA1 for a clickable link. It seems ADVFN only allow blues to post clickable links to loopnet.co.uk.
1st Floor
SIZE 5,716 SF
TERM Negotiable
RENT £17.50 /SF/PA = £100,030 /PA
SPACE USE Office
CONDITION Full Build-Out
AVAILABLE Now
The property provides attractive office accommodation. It benefits from air conditioning, suspended ceiling and raised access flooring.
Use Class: E
Fits 15 - 46 People
Can be combined with additional space(s) for up to 5,716 SF of adjacent space
Central Air Conditioning
Raised Floor
Drop Ceilings
Air conditioning
Mineral fibre suspended ceiling with LED lighting
Raised access floor
Good quality carpet tiles and flooring |
Investor Presentation 25th Jul 2023 at 9:30am BST - invite now on investoremeetcompany. |
Bit junky in a good location is a decent mix of yield and opportunity |
Yep; looks like there's good alternative use potential |
Uncapped RPI, well done AEWU finding that. 75% of the rent from NCP.
Struggling to picture which one it is (know York well), thinking it's just around the corner from the station.
Edit - can picture it now, opposite the bus station on Rougier St, not far from PCA's Hudson Qtr flats, 5 mins walk at most from station, 5 mins walk into town.
But it's a bit junky, as shown by the yield, and amazed NCP pay that sort of rent on it.
On plus side - there's a lot of the usual AEWU work to be done on it.
Not sure if this will work, but it's this, with the NCP entrance up the road to the right: |
 Acquisition of high yielding mixed use asset in York
AEW UK REIT plc (LSE: AEWU) ("AEWU" or the "Company") is pleased to announce that it has completed the purchase of a freehold, mixed-use asset in York city centre for GBP10,020,000, reflecting an attractive net initial yield of 9.3%.
The 99,769 sq ft asset is multi-let to five tenants. 75% of the income is received from National Car Parks Ltd ("NCP"), who have occupied the 297-space car park since 2005 and have a further nine years remaining on their lease. The lease benefits from a 2027 rent review which will increase rent payable in line with the Retail Price Index, uncapped, resulting in a forecast reversionary yield in excess of 10%. NCP is one of the UK's largest car park operators with an estate of approximately 189,000 spaces over 642 sites. The company is owned by Park24, a Japanese based multi-national parking operator, and the Development Bank of Japan. Another four tenants occupy the ground and first floor retail and office accommodation fronting onto George Hudson Street.
The site totals 0.8 acres and is located inside the York City Wall, bordering the historic centre of the city, within the "Micklegate Quarter". It is situated in a prominent corner position on George Hudson Street and Tanner Row, within a 10-minute walk of key visitor attractions, including York Minster, the Yorkshire Museum and the York Dungeon. York's key retail provisions at Coppergate Shopping Centre, Coney Street, Davygate and Parliament Street are all within a 7-minute walk.
Following purchase of York, cash available for deployment in to high yielding pipeline assets is circa GBP15.0m.
Commenting on the purchase, Laura Elkin, Portfolio Manager of AEW UK REIT said, "We are pleased to have purchased this very well-located mixed-use asset at a day one yield that will be accretive to the Company's earnings. Our due diligence has shown that NCP trades well from the location and we expect this to continue given the popularity of York as a destination. Completion of the acquisition marks the strategic reinvestment into higher yielding assets of capital generated from recent sales. We continue to analyse an interesting pipeline of potential acquisitions and expect to make further purchase announcements in due course, which will bring us closer to our short-term target of full deployment of capital."
ENDS |
SOCAL. That IS how I see it now too. I.e other REITS are better choices for new buyers now. My key point is that AEWU is NOT a sell for any of us clever or lucky enough to have bought in a previous big dip (in my case 2020 covid dip)for reasons so well put by Tag57.
And SKYSHIP, as Tag57 and Spangle93 have just pointed out, my AEWU dividend yield IS 13% at my buy price, and it’s that yield that counts for me and not the yield now at a significantly higher share price! My current AEWU profit with dividends included is 100%. That’s good during a sector downturn.
And building on this point; I also bought Mining Trusts BRWM, CYN and BERI during a Mining sector dip in 2020 too. All 3 have fallen back but CYN is still more than 3 times higher than my buy price, and that’s EXCLUDING dividends on top, and the other two are still up over 150%. And the yield on big dividend paying BRWM is currently about 15% on my buy price and was more before a modest cut. And the yield on the other two though more modest is also high at 10% for CYN and 9% for BERI at my buy prices. So very useful income every year and far better than cash. i.e note my comment about John Lee’s dividends. Mine are pathetic in comparison, but at last I’ve woken up to a method that works a treat!
But my key point remains simply that AEWU is not necessarily a SELL. And for me and others using similar methods, AEWU is a strong hold. For new buyers, for now there are better choices. |
I would say that it is yielding at 13% on Ken's original investment and compounding at 7-8% pa. since 2020, giving a 16%+ return this year. If AEWU hold their divi for another couple of years he will have a free carry. While there is a chance of the divi getting cut nothing is guaranteed and this goes for other REITs and investments elsewhere.
I am using a similar methodology although my investments are taking a hit due to higher inflation rates but expecting these to come down somewhat in the next few years.
There is also the benefit of not having to watch the share price constantly, happy in the knowledge that you bought well - something I need to get much better at! |
SOCAL - that's exactly how I see it too. Though each to their own. If it works for Ken I suspect he is happy to play it that way! |
Ken, not talking about AEW specifically and definitely not opining that one must sell here, just talking in general terms about sunk cost / sunk benefit fallacy. Obviously it’s totally ok for one to like AEW here and also fine to adopt a long term buy / hold mindset; overtrading demonstrably hurts returns for most over time. But; if you are evaluating the best opportunities at the present moment and comparing them, then IMO best to cast your entry price out of the analysis; it has zero influence on the future returns you will enjoy from an investment. |
@Skyship - the way I read kenmitch's post, he's saying he was farsighted enough to buy in 2020 when the price crashed below 70p, so on that basis, an 8p dividend for him equates to a 13% yield. |
Ken - AEWU is not paying 13%. It is yielding an uncovered 8.6% @ 93p. |
Just adding a brief bit to my previous post. These days (and I wish I had done it years ago) I use methods favoured by brilliant investors like John Lee and Warren Buffett. I.e look to hold our quality holdings long term. That way John Lee is now getting dividends of 100% and more a year from some of his holdings and the dividend yield every year is massive. I trade too, but buying the big dips and then holding works! |
Fair points but I also have to decide is it a sell now?
And with a 13% dividend it certainly isn’t, at least until the news changes for the worse or if there’s a dividend cut.
So it makes no sense at all anyone else who took advantage of those great buy opportunities in 2020 selling now on another big sector dip. After all SKYSHIP we have both bought EBOX recently. So you ARE buying the sector.
So can you really convince me or anyone that selling a REIT paying a 13% dividend during the current downturn AND still up 50% on my buy price is a definite sell? It’s been the best performer in the sector and could well be again when the sector turns up again.
I do agree though that for new buyers there are better choices now. E.g SREI, EBOX and API and I hold all 3. |
Sorry Ken - but IMO you should never view your investment from the perspective and parameters at the time of purchase. You have to assess the position as it is now - not 3yrs ago. |
Ken, if you wish to hold what you buy rather than trade, then that objective is going to override everything else, and you are simply going to hold what you buy. But if you invert the logic of everything else you wrote, you will see it does not a provide a logical basis to hold now: had you bought at a higher price, say a 4% yield, and the price had now fallen to offer you a juicy 10% yield, would that poor entry price be a good reason to sell at a 10% yield? |
SKYSHIP.
I usually agree with you (except on buybacks where nearly everyone disagrees with me) but are you really telling me I should sell AEWU?
I bought at 63p and at that price I’ve been getting 13% a year just in dividends. There has always been a risk of a dividend cut but shrewd Management decisions mean that AEWU was the only Commercial Property Trust not to cut the dividend during the covid sector bear market.
Even a cut to 6p would still give a yield of over 9% at my buy price, AND with every chance when the sector recovery comes eventually of the dividend being increased along with share price gains as well.
I’m not claiming it’s the best one to buy now as the discount is (deservedly) much narrower than the others, and the likes of EBOX and SREI look better choices for new buyers. But if there’s anyone else reading these threads who also buys these Trusts on the big dips and then looks to hold them for years in preference to trading them, and who also bought AEWU or others at lower prices than now, the case for holding is strong. |
But you've been saying that for a while now...
------------
SKYSHIP - 22 Oct 2020 - 07:41:47 - 1013 of 1457
AEWU NAV Q3 update - down just 0.7% from 93.37p to 92.73p.
Dividend again at 2.0p, but EPS at just 1.6p.
Dividend unsustainable surely.
------------
Since when they've held the 2p quarterly dividend 10x... |
SERE said the same....then cut yesterday!
"Reflecting the potential impact of higher interest costs on the Company's earnings and more patient capital deployment strategy, the quarterly target minimum dividend will be rebased to 1.48 euro cps per quarter (80% of the previous level), commencing with the third interim dividend payable in October 2023. This will allow management to be more patient deploying cash reserves into attractive investment opportunities that are likely to arise, as well as enabling the immediate payment of a fully covered dividend." |
You obviously don't follow AEWU closely otherwise you would know that they stated when all the cash is invested in new properties the dividend will be fully covered.
So talk of cutting the dividend is utter rubbish. |
A very risky hold as the share price likely to drop to c85p when they eventually bite the bullet and cut to 7p pa. 6p would take them lower than that of course.
Upside - well, has to be seriously limited as far better buys across the board.
API, EBOX, SREI - discounts 32%-42% and yields 8.1%-8.4%.
Why would you hold AEWU on a mere 12% discount and a dubious 8.6% yield?
SELL! |
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