Aew Uk Reit Share Discussion Threads

[chucko1] 21/4/2021 09:44

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 09:31

A message for the cretinous down marker :-

[spectoacc] 21/4/2021 08:59

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 08:58

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

[skyship] 21/4/2021 08:56

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 09:22

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 22:29

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 17:54

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 17:48

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

[hugepants] 09/4/2021 15:49

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

[chucko1] 29/3/2021 13:54

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?

[badtime] 29/3/2021 13:29

Nice to see a bit of upward movement

[raptor_fund] 18/2/2021 13:10

Macron over our government for sure. To be fair though the government's vaccination program has been the first world class thing they've managed to organise.

[chucko1] 04/2/2021 11:36

Dn't forget with AEWU, though, that they have spent some effort spelling out their road-map to full dividend coverage. It is their intention to cover it as they reinvest proceeds of recent sales. They will likely get close, although hitting it fully may be difficult until they arrive at 95%+ on collections.

But getting close is fine as they have plenty of capital in the meantime. Additionally, it seems that the draw from capital is likely to be more than met by even a moderate continuation of their assert management initiatives.

The uncertainty of this pathway diminishes as vaccination and science improves, which appears to be on a very rapid trajectory. The policy choices on just about every aspect concerning vaccines seems to be correct. Who would you bet on - Oxford Univ. or Macron for such policy choices?!

[spectoacc] 04/2/2021 11:17

A little disingenuous when the portfolios were constructed by the same manager :)

AIRE:
"A quarter of the Group's rent is derived from the hotel and leisure industry, which has been particularly adversely affected by the COVID-19 related lockdown measures enforced during 2020 and, indeed, most remain closed. As a result, the Group currently has arrears from this sector equal to c.8.0% of its 2020 rents, which, when combined with the remedial work that the Group completed in December 2020 to ensure that its property in Swindon conforms with current Building Regulations, has impacted the Group's cash position, resulting in a lower dividend declared today in respect of the final quarter of 2020. The Board continues to target a resumption of a fully covered annual dividend of 5.5 pence per share1, all else being equal, by September 2022."

A reminder AEWU was 9% short of rent (collected 90%, 1% more due) at last report.


AIRE now has a covered divi. Unlike at AEWU where it's uncovered (but will continue to be paid: I don't expect AEWU to have any reason to cut). And NAV also up.

Hard to choose between them in truth - AIRE is collecting slightly better, AEWU had a higher NAV increase, AIRE lower but covered divi, AEWU paying out of capital. Neither have any LTV issues. Price & inflation protection has me far more in AIRE than AEWU atm.

[2wild] 04/2/2021 11:05

Ex 2p div this morning. I wonder if we'll get another opportunity to buy at 80p or below, giving a 10% yield.

I note AIRE slashed its div by 20% today, 27% below this time last year. So glad AEWU avoided low yielding index-linked property.

[lord gnome] 25/1/2021 17:30

That was certainly a very pleasant share price uplift today in what has otherwise been a dismal day in the markets. Happy to add to my REITs when funds permit. They will recover eventually to provide a nice capital profit and locking in those yields is a once in a decade opportunity.

[chucko1] 25/1/2021 16:10

AIRE will have its day! It had one recently (a few months back) so let it recharge its batteries while AEWU is centre-stage.

[2wild] 25/1/2021 16:05

Top sliced 7% of my holding at 85.73p, a nice 12% increase on my previous purchase a few weeks ago. Don't think this has much further to go, although 88.89p still gives a 9% yield and cost of debt is below 1.5%.

[davebowler] 25/1/2021 15:59

Liberum;
AEW UK REIT

Industrial value uplift caps strong year

Mkt Cap £127m | Prem/(disc) -16.7% | Div yield 10.0%

Event

AEW UK REIT's NAV per share at 31 December 2020 was 95.9p, representing a NAV total return of 5.5% in the quarter. Q4's strong performance benefited from a 7.6% like-for-like revaluation gain on the industrial assets (56% of the portfolio).

The overall portfolio valuation rose by 3.4% on a like-for-like basis in Q4, well ahead of the capital return of 0.6% for the MSCI IPD Index. The valuation movement by sector over the quarter was industrial +7.6%, office -0.7%, retail -1.1% and other -3.5%.


The portfolio has benefited from asset management initiatives including a number of lease extensions. Several of the industrial assets have experienced rental uplifts from new lettings and rent reviews:

Sandford House, Solihull - AEWU has agreed the sale of Sandford House for £10.5m, 9% ahead of the prior book value. The sale price is 94% above the acquisition price and the disposals follows a new 15-year lease with the tenant in July at a 30% premium to the prior passing rent.
Bath St, Glasgow - Contracts have been exchanged for the conditional sale of the office property to IQ Student Accommodation, conditional on planning permission for a 480 bed student property (final sale price will be within £8.6m to £9.3m range).
Moorside Rd, Swindon - A new letting was agreed with HB Accident Repair Network in November, just two months after the administration of the prior tenant, Tenant Nationwide Crash Repair Centres. The passing rent on the new ten-year lease is 10% ahead of the prior rent.
Sarus Court, Runcorn - A new 10-year lease to Di-Tec Power was 3% ahead of ERV and sets a new high tone of £5.65 per sq ft for the estate.
Storeys Bar Road, Peterborough - A 15-year lease renewal has been completed with one of the company's largest tenants, Wydenham, resulting in a 19% increase in the passing rent.
Brightside Lane Sheffield - A rent review settlement has been agreed, resulting in a 7% uplift to passing rent (also 7% above ERV).
Rent collection for the December quarterly payment date is expected to be broadly in line with the prior quarter. 64% of rent for Q1 2021 has been received, rising to 92% once monthly payments and longer term payment plans are included. An additional 1% is under negotiation.

AEWU - rent collection by quarter



Q2 2020

Q3 2020

Q4 2020

Q1 2021

Received

95%

89%

87%

64%

Monthly payments







26%

Agreed on long-term payment plans

2%

3%

4%

1%

Under negotiation

2%

4%

1%

1%



99%

96%

91%

92%

Outstanding

1%

4%

9%

8%

Total

100%

100%

100%

100%



Source: Liberum, Company data

EPRA EPS rose 5% to 1.68p for the quarter (0.84x dividend cover). The dividend has remained stable at 2p per share for Q4 2020. Dividend cover has reduced since the sale of the Corby asset in May at a 25% premium to NAV. Q4's EPRA EPS was reduced by 0.21p as a result of provisions against rental income (-0.13p) and remedial works at the Blackpool property (-0.08p). AEWU completed the acquisition of the multi-let industrial asset in Weston Super Mare for £5.4m (6.4% net initial yield, expected to rise to at least 7.4% over the medium term) and dividend cover should improve in 2021 as further acquisitions complete.

The balance sheet is in excellent shape with gross and net LTV ratios at 31 December 2020 of 21.6% and 17.5% respectively (23.1% and 15.3% at 30 September). AEWU can draw up to an additional £13.7m to fund new investments.. The company's cost of debt remains very low (1.45% average cost of debt) as it is hedged using caps.

Liberum view

AEWU has generated a highly creditable NAV total return of 7.3% in 2020 despite the significant volatility impact on property markets. Rent collection has remained high and new lettings have typically been above passing rent and ERV. The company's strategy is to invest in buildings with low obsolescence, focusing on good commercial locations with low levels of supply. The portfolio has benefited from a strong letting performance and other accretive asset management initiatives. The portfolio offers considerable scope for further growth given the weighting to industrial assets with low rents and capital values. The industrial properties are valued at £39 per sq ft, c.44% below construction costs (excluding land).


In the period from 31 December 2016 to 30 September 2020, AEWU has outperformed the diversified REIT peer group by 17%. Several factors have contributed to this including asset selection, sector weightings (high industrial and low retail exposure) and a high level of recurring income. AEWU has tight control over costs with the lowest interest rate in the peer group and one of the lowest EPRA cost ratios. We believe AEWU will continue to outperform peers given its significantly higher level of recurring income. We believe the shares are highly attractive at the current 17% discount to NAV (10.0% dividend yield).

[spectoacc] 25/1/2021 15:53

Know I've said it before, but does make me laugh how revered and successful Ms Alex & Laura are at AEWU, compared to being so unsuccessful at AEWL they got the push.

As an AIRE holder, I think the portfolio they constructed (and it's pretty much still that) is better than the market gives credit for. Success at AEWU shows that.

[chucko1] 25/1/2021 15:40

The update is all very well, but this move is another example of the immaturity of this part of the market.

I mean, an 8% move on a confirmed dividend and decent NAV update? Yet no moves in others which are not a million miles different.

[playful] 25/1/2021 15:38

The answer to this question piqued my interest here...

Changes to the Use Class Order, in particular Use class E, has been mentioned several times when discussing the Company's strategy. Can you say a bit more about the changes in use regulations and expected impacts on the market?

Looking forward, it is expected that we will see increasing utilisation of ‘change of use’ as a result of newly introduced changes to the national planning regime. These changes aim to increase flexibility of use, particularly in town centres and include the introduction of Use Class E which groups together a number of previously disparate commercial uses to allow greater ease of movement between them. For example, prior to the introduction of Use Class E, commercial property uses including light industrial, office, retail, health care and gymnasium where categorised in to different use classes so movement between these uses required express consent. The introduction of use Class E, where these uses are now classified together, increases ease of movement between them.

Well done Alex & Laura!

[chucko1] 25/1/2021 13:33

Your 84p target is basically tradable now.