Aew Uk Reit Share Discussion Threads

[stemis] 03/11/2022 13:32

What's that got to do with the REIT?

[spectoacc] 02/11/2022 07:28

Is it still the top of the market tho?

What happens after 12 months?

AEWU timed their sale v well, and I think they may well pick up a bargain some time next year, but I'd worry they're so keen on their 2p/qtr "dividend" that they may buy something just to be able to continue it.

[2wild] 02/11/2022 07:20

Even on a covered basis the dividend yield is still 4.4%. Returning capital by way of an uncovered dividend at the top of the market is no bad thing either.

[nickrl] 01/11/2022 22:28

Good comprehensive update and yet again they seem to have timed things well with the sales a few months ago but hadn't exchanged on anything new that was in the pipeline and are renegotiation prices down and expect to achieve yields 8%+. The Q&A is worth a listen starts about 30mins in. They are both quite bullish still unlike some of the others that have shown more negativity. Also my take is even though divi isn't covered they will continue to pay it as long as the board can be convinced they have roadmap to get it covered within 12mths.

Personally i prefer covered divis but have lost out here because of my self imposed rule but with share price back at this level may have to break that rule.

[stemis] 01/11/2022 17:51

Whatever was said at the investor meet doesn't seem to have helped the share price.

[fred177] 24/10/2022 06:33

AEW UK REIT Plc is pleased to announce that Laura Elkin (Portfolio Manager) and Henry Butt (Assistant Portfolio Manager) will provide a live presentation relating to the three-month period ended 30 September 2022 via the Investor Meet Company platform on Wednesday 26th October 2022 at 3:00pm BST.

The presentation is open to all existing and potential shareholders. Questions can be submitted pre-event via your Investor Meet Company dashboard up until 09:00am BST the day before the meeting or at any time during the live presentation.

Investors can sign up to Investor Meet Company for free and add to meet AEW UK REIT Plc via:





Investors who already follow AEW UK REIT Plc on the Investor Meet Company platform will automatically be invited.

[spectoacc] 20/10/2022 09:20

Agree that's what they ought to do, but they plan to punt it in first half of next year. Then again, better than punting it recently or now.

Agree that "our yields are high already so it's fine" doesn't hold water, but I guess fair to say a move from (say) 3% to 6% is a halving of capital values, whereas a move from (say) 6% to 9% is only a 33% fall. .

Agree (again) that rent collection & voids needs watching - as SGRO showed this morning, the lettings market is still fine. AEWU are still finding tenants aplenty it seems. But even now, 2% of rent isn't being paid.

Personally I'm not too comfortable with divis paid out of capital. But we are where we are, the divi will be the last thing they cut, & can't say it's expensive here.

I'll buy when it's cheap.

[nickrl] 20/10/2022 09:14

There is a reflection of hard times ahead but that AEWU has defensive elements because its

"As yields re-adjust to the current market conditions, it is those assets at the most prime end of the spectrum that have suffered more acutely to date. With higher "starting" yields, the portfolio's current book values are closer to long term value fundamentals, such as vacant possession values, alternative use values and replacement cost"

is reasonable assertion but won't hold water if we have a deep recession of course.

Also the fact they state this

"The Company's prudent accounting provision for doubtful debtors has also been increased this quarter, given the deteriorating economic outlook"

is hardlt a surprise but points to the covid situation emerging and dividends being frozen or cut

Industrials down 6.35% will be a negative read across for others although they do show that industrial has potential still with the Rotherham letting

As specto points out divi is now poorly covered but they have £30m+ cash on the books to fund it for many qtrs so i would stick 50% in a 12mth account so at least tehy neutralise some of teh cash drag if they want to maintain the divi.

[spectoacc] 20/10/2022 09:07

Ah OK. They've said they'd reinvest all of it.

They've been spending a bit on CapEx lately, not sure how much more of that they plan to do, nor if any new purchase will need it.

[stemis] 20/10/2022 08:50

The V is the value of properties, or at least it was in my analysis. I assumed they'd only reinvest £30m of the £38m. The remaining £8m would cover dividends for 18 months (i.e till Q2 2024).

[spectoacc] 20/10/2022 08:43

The covered divis don't - they're paid out of earnings - but the uncovered ones do, they'll reduce the assets ie cash ie the "V".

3p a guess based on them saying the expect the divi to be covered again in Q3 2023.

[stemis] 20/10/2022 08:37

Have you included the c.3p in capital going out in uncovered divis.

Doesn't affect LTV.

[skyship] 20/10/2022 08:10

On offer at 89.3p

[spectoacc] 20/10/2022 08:08

What are the covenants set at?

Have you included the c.3p in capital going out in uncovered divis.

Will they buy after a 40% drop, or well before then, say at -10%?

If I'm right (if), the recession will also hit tenants badly. Takes very few voids & empty rates bills to create a problem.

I think the market's not caught up yet, or else it's (rightly) ascribing only a % chance to my reasonable worst-case.

[stemis] 20/10/2022 07:48

Even a 40% drop in the valuation of current properties would only take LTV to 37.8%. Under those circumstances NAV/share would be 67.8p so clearly the market isn't expecting anything like that...

I don't think LTV is the risk here.

[spectoacc] 20/10/2022 07:46

What is the LTV covenant set at? I admit I've no idea.

Yes, valid point - LTNAV, not LTV, so better than it looks, particularly if they're waiting until into the falls before deploying the £38m.

Personally I'm expecting a much bigger drop than 25% - but horses for courses. I think we've a deep recession coming as both consumer and govnt retrench simultaneously. Can't think that's happened since the early 90's, & don't see how it can be avoided. (Or rather - consumer, govnt, & no BoE ZIRP).

[stemis] 20/10/2022 07:44

I think the risk of a breach of LTV covenant is less than you seem to be suggesting. The 31.07% quoted in the update is loan to net asset value not LTV. The LTV is actually 28.0%. If they invest, say, £30m of the funds they have available, that would drop to 24.6%. Even if there was a (pretty dramatic) 25% fall in valuation of current properties (which would take NAV/share to 88.1p so clearly not expected by the market), LTV would only be 31.5%. Although dividend is uncovered by 0.92p a share, the cost of that is only £1.5 million, so well within their ability to stand until they can reinvest the cash they have.

[spectoacc] 20/10/2022 07:35

Yes, and them saying next year gives some time for the prices to go lower first. And it depends what they actually buy.

But - I think this is the end of the ZIRP era, 14 years of ever-reducing interest rates, QE, and asset price appreciation. If it is, values could easily fall 40-50%. That's the point to buy :)

(What does that do to a 31% & rising LTV, & banking covenants).

Clearly I may be wrong - interest rates peak sooner, come back down, and ZIRP resumes. The world's debt load suggests that could happen.

Calling the top of the property market been a mug's game for years, this might just be yet another "buy the dip". But if it isn't, there's going to be fireworks.

[cwa1] 20/10/2022 07:26

I dunno Spec, sometimes the time to buy is when there's at least a little "blood on the street". I'm not suggesting for a minute there is much blood there...yet...but there are probably already bargains to be had out there if the management are good enough to sniff them out. In a few years time it's easy to speculate that one might be saying: hey, that was a decent time to make a purchase back in '22 :-)

Who knows?

[spectoacc] 20/10/2022 07:20

Yes, talk a good game, lettings strong, brilliantly timed disposal and debt-fixing.

Negatives - badly uncovered divi, fairly high LTV considering the "V" is going to tank, too early in the recession to make too bullish a call on lettings.

They say they expect to "fully" reinvest the cash in first half of next year, and should have the divi covered again in Q3. Guess they'll be paying out c.3p of capital in the meantime.

They're one of the few who'll be in the market to buy, tho whether that's wise or not, time will tell. Without the pressure of the dividend, wouldn't you be hunkering down?

[cwa1] 20/10/2022 07:14

Obviously not going to make a jot of difference in the current febrile atmosphere-but a fairly solid update with some positive points IMHO

[spectoacc] 20/10/2022 07:05

And they may pick up something great with that. But they may also need a chunk of it to cover the big drop in NAV/big increase in LTV which is (IMO) coming.

Not impossible they find something high-yielding enough to get the divi covered again, whilst still having some left over.

[stemis] 20/10/2022 06:48

Decent update. Holds £38m (27% of market cap) available for investment.