Aew Uk Reit Share Discussion Threads

[chucko1] 22/4/2021 09:47

But they could not have made it clearer that they had no intention whatsoever in cutting the payout. They went to some lengths in previous months to explain their thinking.

But this was a really strange update. For the first time I think the underlying tone was a little more defensive and explanatory of the issues they were contending with (the same as before but unexpectedly protracted). And yet at the same time, the second of two huge uplifts in NAV (well, huge in the context of other Propcos) taking it up 10% in little time.

Where they could change course is indeed to rebase the dividend to reflect the uncertainty in when they will be covering EPRA earnings once again, but to engage in special dividends which they are more then able to bring up to an aggregate of 8pps from a combination of the revaluations and cash on hand.

A little gem this one, but I have now reduced by 65% or so on the back of the easy money being banked and the fact that it has low market cap. But at 9% yield it more than merits holding still a few. I think it's worth around 114p (i.e. 7% yield) but that's for another day.

[nickrl] 22/4/2021 09:09

Ive misjudged this one was expecting after last NAV update that the dividend might get recalibrated given underlying earnings shortfall yet earnings have worsened this qtr but they continue to payout.

Pretty sure these are the only propco now that has held the divi unchanged through the last 12mths

[chucko1] 22/4/2021 07:02

A "sudden" 19% increase on a single property because it just happens to be in a Science Park or business area. Says more about the process of valuation rather than stock selection.

The opposite is also true which is confounding sensible evaluation of certain portfolios. Which is good if you are in this for the long run and can ignore the [loud] noise.

[lord gnome] 22/4/2021 06:37

Bit of a mixed bag as to be expected. Increase in NAV is a nice bonus. EPRA earnings a disappointment but not entirely unexpected and the company has explained it well. I wonder who the tenant is that can pay but won't pay? Hopefully court action will prove successful. Dividends keep on coming and the company seems keen to keep paying whilst it achieves full EPRA cover. Very happy to keep holding on that basis.

[spectoacc] 22/4/2021 06:36

Wasn't expecting it the next day :)

But as per Post 1105, the "Other" has indeed had its write-downs (0% this time), & short-WAULT industrial is just gangbusters.

The impending purchases should be interesting - been seeing nothing that's cheap.

[skinny] 22/4/2021 06:02

.

Highlights

? Interim dividend of 2.00 pence per share for the three months ended 31 March 2021, in line with the targeted annual
dividend of 8.00 pence per share.
? EPRA earnings per share ("EPRA EPS") for the quarter of 1.10 pence (31 December 2020 quarter: 1.68 pence).
? NAV of GBP157.08 million or 99.15 pence per share as at 31 March 2021 (31 December 2020: GBP151.88 million or 95.87
pence per share).
? NAV total return of 5.51% for the quarter (31 December 2020: 5.53%).
? During the quarter the Company completed the sale of Sandford House, Solihull at a price of GBP10.5 million. The
asset was acquired in August 2015 for GBP5.4 million and the Company invested no further capital in the asset during
its hold period.
? The Company remains conservatively geared with a loan to NAV ratio of 25.15% (31 December 2020: 26.01%). As at 31
March 2021, the Company had a cash balance of GBP17.45 million and has GBP15.48 million of its loan facility available
to draw up to the maximum 35% Loan to NAV at drawdown.
? Having sold two properties in the past 12 months, the Company is currently in the process of acquiring new assets.

? For the rental quarter commencing on 25 March 2021, 84% of rent has been collected or is expected to be received
under monthly payment plans prior to quarter end. The remainder of rents owed will continue to be pursued.

[chucko1] 21/4/2021 12:15

You could always pretend it never went up and you are earning a 13% yield! But it's never all or nothing - you can simply reduce the position size to reflect the uncertainty.

[badtime] 21/4/2021 10:14

One of my better purchases last year at 61p....bought for div..but when have such a large increase in the share price it always begs the question of whether to cash in....for now I continue to hold

[chucko1] 21/4/2021 09:33

That buyback was at an average of 75pps, so a fair result although not nearly as large a discount as SREI now at. But recall that they had sold a large property and had cash burning in their pockets at the same time as a 11% yield to be paid out.

[kenmitch] 21/4/2021 09:30

SKYSHIP

I missed that. I just scanned the AEWU news headings on AIC. Of course I can’t argue about the positive impact on NAV.

[skyship] 21/4/2021 09:23

Ken - actually AEWU too made buybacks - but admittedly at a low level - see this from their Interim statement in Nov'20:

"In light of the discount in share price to NAV and cash reserves available, post period-end the Company has bought back 350,000 of its own shares for gross consideration of GBP262,995, which will have a positive impact on the Company's NAV per share."

[skyship] 21/4/2021 09:19

Specto/Chucko - thnx for that - agreed, NAV is 95.87p courtesy of their Qtly Update which I missed as they didn't post an RNS. Info had to be found on their website.

Also showed 2p qtly divi and EPS at just 1.68p - but they still target the 8p annual divi.

[kenmitch] 21/4/2021 09:01

AEWU performance over 5 years is very good and as long as it can be held, that still very big dividend (8%ish even after the big share price gain) is a big plus. Bearing in mind the excellent short and long term performance the NAV discount disappearing is arguably justified.

As I’ve posted (and I know annoyed in doing so) many investors prefer dividends to buybacks and if those dividends are in a REIT that outperforms then that’s even better.

Compare for example the performance of AEWU who don’t buyback with SREI who do.

AEWU share price is up 69.5% over 1 year, 27% over 3 years and 43% over 5 years.

SREI share price is up just 8.7% over 1 year and DOWN 20% over 3 years and DOWN 13% over 5 years.

Sector average is up 20.4 over 1 year, down 5% over 3 years and down 2% over 5 years.

So AEWU has way outperformed the sector and SREI way underperformed throughout.

What about NAV?

Again AEWU has way outperformed and SREI underperformed but not as badly as the share price return.

Sector NAV is 0.4 over 1 year, 2.6 over 3 and 17 over 5 years.
AEWU NAV is 9.9% over 1 year, 25.2 over 3 years and 47.4 over 5 years.
SREI NAV is 0.1% over 1 year, MINUS 2.6% over 3 years and MINUS 2% over 5 years.

Do these figures support the argument that what matters is the quality of their investment portfolio ahead of trying to help the share price and NAV via artificial means like buybacks?

SREI buying back shares since last September is still at a big discount.
AEWU not buying back has seen the big discount go to zero.

I hold AEWU and SREI, hoping better times are ahead for SREI.

[chucko1] 21/4/2021 08:44

Yes, it was 95.8p after having been written up by 3.5p or so a few weeks back. But I agree that the rise has been pretty dramatic and at 93p it's where they were before they fell rapidly to 55p. Massive gains but I will not sell out entirely as I still see the high dividend as very likely to remain unaltered (as I have argued often).

I think 3p of the recent rise is down to an aggressive buyer with the other portion really a function of the overall REIT market jollity. So switched into a mixture of SUPR and SREI, the latter which has not been so jolly, relatively.

Furthermore, I am not convinced we are pricing the continuing pandemic negativity adequately.

[skinny] 21/4/2021 08:31

A message for the cretinous down marker :-

[spectoacc] 21/4/2021 07:59

Last NAV 95.8p I thought? I think it'll rise again next time - if the "Other" is now written down, the short-WAULT industrial likely to be up again.

Saying that - not holding.

[skinny] 21/4/2021 07:58

Chucko1 - I'm not out, I've made 4 purchases since 2018 and now in profit + income.

[skyship] 21/4/2021 07:56

On my REIT spreadsheet I track 18 players - 4 of which now trade at a premium to NAV. To the usual CREI, LXI & WHR you can now add AEWU.

I must say that to my mind April's rise of 12% in AEWU seems rather absurd; but hey, no sign of a dividend cut to a covered level, so I suppose I'm just wrong on this one.

[chucko1] 17/4/2021 08:22

Skinny is all out and LG is adding! Just to say that I have been reducing in aggregate, but still adding to individual cases such as SREI. So that's most of the spectrum covered.

Where I am not reducing is where there is significant inflation protection (like SUPR where I now have well over 10% of my entire Uk equity portfolio, and may add more).

[lord gnome] 16/4/2021 21:29

Added here and RGL today. Gotta love those regular dividends. Also helps if you believe that property REITs will recover this year. £1+ here before long.

[skinny] 16/4/2021 16:54

Yes - 4 purchases here since 2018 - now comfortably in profit + the income.

Only negative on RGL now out all of my REITs.

[brucie5] 16/4/2021 16:48

Reminder never to overlook the overlooked: this has given divvy and capital gain.

[hugepants] 09/4/2021 14:49

Perking up a bit here from the low 80s. Due a NAV update and dividend declaration this month.

[chucko1] 29/3/2021 12:54

Two things: there appears to have been an ongoing seller the past few weeks or so who is now done.

Secondly, post 1095. Macron over Johnson - really?