Aew Uk Reit Share Discussion Threads

[jombaston] 22/10/2020 17:26

I agree with above - maintain div, buyback stock, re-invest Geddington proceeds and opportunistic investment management initiatives will eventually see a recovery. Debt is low so there is wiggle room should conditions worsen temporarily

[skyship] 22/10/2020 07:47

Certainly the mood music seems to endorse the maintain view

[stemis] 22/10/2020 07:43

A big chunk of the drop in the earnings will be from the sale of Geddington Road in the previous quarter. Net income of £300,000 for a quarter is around 0.2p. That money of course remains ready to be re-invested.

[hugepants] 22/10/2020 07:39

fyi if they did reduce the divi to match last quarters "epra" earnings of 1.6p the yield would still be 8.6%

[deanowls] 22/10/2020 07:37

Is there a better deal than buying their own stock at the discount and avoiding the divi payout.

[lord gnome] 22/10/2020 07:26

The uncovered element of the dividend means that if they maintain it at 8p it will cost approx £2.5 millions pa out of capital. Not ideal, but as long as they believe that they can see a way back to normality and full cover, they will maintain it. Not a lot in the grand scheme of things and they do have plenty of cash at present with income accretive purchases lined up. I am confident that the dividend will be maintained (ceteris paribus).

[spectoacc] 22/10/2020 06:47

Cash/NAV/LTV, buybacks, acquisitions, rent catch-up - I think they'll maintain at 2p/qtr.

If Covid/Brexit get worse, always the option to cut it - but only temporarily uncovered atm.

[skyship] 22/10/2020 06:41

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.

[2wild] 21/10/2020 18:46

Having sold some at 101.15p in early February, when the shares were at around a 5% premium, i would say the current discount is excessive on these.

Other REITs on 40% discounts or more tend to have LTVs over 30%, average cost of debt above2.6% and high retail exposure or low portfollio yields.
Added today at 74.5p on a 10% yield adjusted to 100% cover basis.

[skyship] 15/10/2020 08:11

Bizarre buybacks here. They are usually enacted when we see an excess discount; but the discount here is a relatively low 18%.

Seems as though the buybacks may be to save paying the 10%+ yield on the bought back stock.

[hugepants] 14/10/2020 22:02

Buyback started. 200K at 76.5p

[chucko1] 29/9/2020 21:49

I really do not think, even with a 1.1mn shortfall, that they reduce the dividend. They would do so were more adverse events to occur which were not of a very temporary nature. They have maintained the dividend because the number of adverse events is very small.

The current lack of income is not adverse, but by design. The cash shortfall is more than covered, as you rightly say, and will be more than compensated for by waiting for an opportune time to reinvest. The last thing to do is to rush into new purchases now just for the sake of a quarter or two of increased income.

An oscillating dividend would certainly serve to annoy a lot of people! Cutting it (by 25% to 50%) for a year, and then gradually raising it would be preferable. At least you could understand the plan (assuming REIT rules allowed this - they probably do as a number of REITs have cited "conservatism").

[nickrl] 29/9/2020 20:41

Chucko as i see it the fabulous sale of Geddington Rd has put 18m in the bank at a cost of 1.32m rent and there's no way they've made that back. They will be down another 0.5m on already notified departures and had another 1.3m at risk (annual report data). Made some back on various lease events reported so far but my take is they will be at least 1.3m down and maybe more but depends how year progresses. So thats nominally NRI of 17.3 less 1.3m say 16m.

Then with the current unresolved tenants (wont pay brigade?) that risks another 1m missing (so 15m) and deferrals is further missing cash depending on terms (receivables up significantly over previous 12mths isn't a good omen but with year end right at point of lockdown maybe partly explainable)

Then we have building costs of 1m, 2m other expenses and finance costs should be reduced to c1m assuming they've offset current borrowings from Corby sale which they say have the flexibility to do.

So 11m to cover 12.2m divi means they ought to pare this back but the profit on Corby sale could be used for a few years to keep it at 2p. Even if they cut back to 1.5p/qtr thats 8% yield which very few others are coming anywhere near to currently.

[chucko1] 21/9/2020 18:52

Hmmmm - there are degrees of uncoveredness! This one is pretty close and recall that the large cash holding is a key factor in the shortfall. Yet we want these propcos to be really liquid at this point in the cycle (if this really is a cycle), so you have to weigh the significant liquidity against the slight shortfall in income. The value of cash in a market as volatile as this weighs heavy.

Liquidity has always had much more value than just looking at short interest rates. It buys other peoples' pain at a very cheap price.

On that note, I bought back a portion of what I had previously sold. I am not afraid to hold quite a lot of AEWU, especially as we slide back down the 70s.

[skyship] 21/9/2020 13:52

Getting tempted at 75p; but all indicators pointing to lower levels, so will wait and see. At 75p the discount is 19.7% and the yield an uncovered 10.67%.

[bg23] 09/9/2020 11:28

interesting update today. I also note St James' have re-opened their property funds for dealing today - i'd think that is a big positive for the sector

[skinny] 09/9/2020 07:43

" This positive momentum, along with our healthy capitalisation, led our Board to support the full payment of AEWU's target 2p per share per quarter dividend during
July and it is our hope that this positive momentum can be maintained going forward."

[lord gnome] 09/9/2020 06:47

Yes, very positive. That 10% yield looks as safe as anything can be.

[djderry] 09/9/2020 06:41

Very positive update.Happy to hold.

[essentialinvestor] 29/8/2020 13:56

Short term issue is the moritorium being extended again.

There have been calls during the week for a 6 month extension.

The longer this stays in place the more tempting it is for

tenants either not to pay, or to dictate their own % payments.

HMG needs to provide some longer term clarity.


If landlords have no redress or sanction options, it's arguably increasingly dangerous for the sector.

[skinny] 29/8/2020 12:29

Oh I see - HL have always paid it gross.

Either way, a nice change in these strange times!

[ramellous] 29/8/2020 12:26

ii sipp paid net then paid all reclaimed tax back once a year. I’m still waiting for my tax back for all the pids paid from last year.. in their isa they usually pay it back about 6 weeks after divi is paid out.. They’ve changing some fees from October but no mention about this change.. I’m pleased about it anyway..

[skinny] 29/8/2020 12:06

These are always paid gross in to my SIPP?

[ramellous] 29/8/2020 11:38

I got paid gross straight up in my ii isa. Also got paid gross for the monthly EPIC divi yesterday in ii sipp. Great stuff, had no messages about this change off them though..