NCP is owned by a Japanese company which during the UK covid-19 oandemic lockdowns refused to pay rent. I know one landlord was furious and would think quite a few others were as well. |
It's not that Aldi necessarily want a rent free You, the landlord, give them because of red book values You value only the headline rent and then knock of the PV of the rent free You don't value the net effective rent Such that once the rent free expires you are then over valuing the asset Eg £100 rent with £100 rent free on a 10 year lease - P&L for tenant is £90 each year of the lease Red book values are on the full £100 with no accounting for future rent frees |
As usual AEWU provide loadsa of info setting the gold standard. Interesting comment re Wilko who else has them in the stable NRR? Surprised they need to give rent frees to Aldi but guess thats the price for getting them onboard for a long lease and they will probably roll the site in a couple of years. |
IMO AEWU is about the only over-distributor that's justified in doing so - they're superb at the trading side. Maybe comes from being a newish REIT, relatively, without the historic baggage of many others. |
Hardly surprising the dividend is uncovered as EPRA PPS was 1.77p in Q4 2022/3 and they sold 3 properties in the period. The part reinvestment of proceeds into York did not occur until after the end of Q1 2023/4. Earnings actually fell slightly less than I expected from the timing of sales (to 1.75p rather than 1.73p). Nice to see NAV starting to recover, despite the temporarily uncovered dividend and the dividend maintained again. Steady as she goes... |
Divi still remains uncovered by income. Tapping into the capital profits they make from spinning the portfolio.
I have been in and out of this one. Currently out (sold at £1) as there are bigger discounts available elsewhere, where the income divi is covered. I’d be a buyer again at 88p. |
I also disagree. I’ve held from 63p in 2020 slump when the AEWU dividend yield was 13%. No way would I want the dividend cut. AEWU is also the best performer of the REITS I bought in 2020 so there’s nowt wrong with overall performance either. |
There's no law that reits need to barely cover their divi Because of previous over distribution plus capital allowances most REITs can get away with distributing as little as 65-70 of FFO (scrip divis count too - hence why HMSO hasn't paid a cash divi in years) |
I disagree and anyway they are a REIT so need to distribute. I suspect a lot of holders are in for the dividend yield and if they cut it the price would fall. |
It's annoying They should have just cut it long ago and then removed the question of it being cut; initially it put me of investing here too I'm bought in here for total return driven by active management, not for them to buy and hold assets - this isn't SUPR or PHP And if they can keep buying and turning assets then I'd rather the cash stayed in the reit to reinvest and compound up at a higher rate than the divi yield |
@SteMis they've been warning about sustaining divi for years but despite it being uncovered for the same period they never cut. I read too much into that historically and lost out as Laura and the team have shown great adeptness in timing sales and purchases to keep enough surplus in the tank to make up the difference. |
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! |
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