Alternative Income Reit Share Discussion Threads

[marktime1231] 31/10/2024 12:37

Quite right nickrl this is a trap, luring punters in on a rising dividend which they know will have to be cut. My guess is the cost of borrowing, which needs to be refinanced within the next six months or AIRE becomes a questionable going concern, will double up from the current 3.2% average. AIRE are a small player under pressure and unlikely to be able to agree terms better than base + 2%.

So net income available for distribution is likely to fall by around 30%. Very naughty of AIRE to be rising distributions by about 5% in the meantime.

So naughty in fact it adds to suspicion that they are lined up to sell out in the next 12 months, to a buyer attracted by a high yielding and performing portfolio. This time next year AIRE will be sold for cash at a 10% discount to NAV, subsumed by an O or other well funded real estate giant where the yields are less spectacular.

[nickrl] 31/10/2024 10:53

Good to see annualised NRI continuing to increase modestly each qtr which does support the slight rise in divi forecast. However, the elephant in the room is with less than a year to go on refi thety are going to be faced with quite a step up on finance charges from current 3.2% to 5-5.5% currently or worse after adverse reaction from gilts yesterday. I would have rather they held back on any divi increase until that refi was boxed off as cutting the divi now ill have an adverse reaction to share price As a result i will hold and not top up further here until I know whats happened on refi.

[this_is_me] 31/10/2024 07:43

Great to hold for the dividend and the capital gain is nice too.

[skyship] 15/9/2024 06:46

ASLI had a good finish to the week - moving up to 62.5p. Still good value.

As I've posted elsewhere, take a look at CLI.

Sp has been hammered due to their chosen sector of Offices. However, look under the bonnet and the 60% NAV discount and the 8.5% yield on a well-covered dividend, does seem more than a little harsh.

Berenbergs now upgrading and looking for a 25% recovery to 114p. I'm looking for much more; especially if the 60% controlling family decide to diversify their trusts and sell out to PE. An immediate 75%-100% profit!

[marktime1231] 12/9/2024 19:31

I'm sure many of you guys will have IHR. It would have been tempting six months ago but like CREI has also gained 10p since. Still looks good value, it might have further to go, worth watching. Care homes have more sectoral operator risk than leading supermarkets though, so for now I will focus on SUPR.

[skyship] 12/9/2024 12:29

ASLI looking really cheap at 59.6p, esp as fellow liquidation stock API is powering ahead; also EBOX - a fellow Euro logistics play

[marktime1231] 12/9/2024 11:53

The CREI tip here was gold, up 10p in three months. Risen so fast I haven't had weakness opportunities to add more, instead loading up on SUPR and averaging down on my price there.

Saw another tip in the FT for Impact Healthcare which was heavily discounted when one of its smaller retirement home operators folded but seems to have recovered from that and otherwise performing well. Put off a little though because the tipster has a record of backing crashers including GRID and RGL. Is IHR worth a closer look, it seems to pass the tests of cheap, reasonable gearing, scale and yield?

AIRE share price looks like it may be starting to drift back from the last bout of enthusiam, watching closely for news.

[marktime1231] 27/8/2024 11:36

Out at 71.2p. Thanks AIRE you have been a rewarding risk.

As ever the puzzle is where next. Already filled up on SUPR and CREI.

[marktime1231] 16/8/2024 10:26

Busy again today, offers up to 71p for my last piece of AIRE

[marktime1231] 15/8/2024 11:29

How strange. Couldn't sell yesterday at any price, sold ex-div today in what is a busy market for AIRE.

[marktime1231] 09/8/2024 12:27

As expected, the lack of reinvestment dragging slightly on income. The steady NAV is a comfort. If they run the risk of holding off refinancing (and dividend reset) until as late as mid 2025 what IR compression might we see? The average cost of borrowing will rise from 3.x% to 5.x%.

Merging in to a big REIT with deeper pockets remains the preferred outcome with a deal perhaps at around 73-74p. Still kicking myself for not taking that when on offer in January, if it comes round again I will be banking. The splendid distribution is very welcome in the meantime but a certain cut is only months away.

[nickrl] 08/8/2024 08:35

No surprises here 1.625p final divi for 5.9p for the year. Bought in low here for almost double digit yield but am a bit weary that with just over a year to go on the debt the divi cover will then be challenged and that relies upon IR coming down further still so if it doesn't a cut maybe necessary.

[nickrl] 06/8/2024 19:31

@marktime getting in the financing window but no need to rush if IRs are dropping back

[marktime1231] 06/8/2024 16:50

Anticipating a year end update and final dividend c. 1.6p to be announced on Friday.

And news on financing, maybe whether the board have been mulling bids?

A further switch to CREI at a convenient moment is looking favourite, neck and neck with SUPR on yield but the share price is ahead.

[marktime1231] 03/6/2024 17:53

Thanks again to everyone for their sensible and helpful comments, advfn at its best on this thread, well done to you all. Pre-empting the resolution of AIRE, whatever and whenever that might be, I have today taken maiden stakes in CREI at 73.5p and SUPR at 76p.

It was my instinct that commercial property value is firmly on the foothills of recovery to be propelled by falling interest rates, and I didn't want to miss out while there were still bargains to be had. I'm expecting some sort of exit for AIRE in the low 70s whereas CREI and SUPR have 100p+ long term futures, when I will rollover in to whichever delivers the most attractive income prospect.

Not a moment too soon judging by today.

[nickrl] 29/5/2024 19:56

SREI/CREI have best debt metrics in terms of near term refis although i doubt SUPR will be bothered by rolling debt as thats in their DNA. AEWU has been rolling double sixes for years but the shine may have gone off them and as the one with least covered divi could it finally succumb to a cut.

[skyship] 29/5/2024 12:46

marktime - I agree with Nexus that CREI now looking good value with their increased f/c divi of 6.0p for the y/e Mar'25.

CREI rather shot themselves in the foot with their abortive foray for API. They've been a weak market since then; but pretty sure they will recover through 2024; so should be some capital gain to add to the prospective 8.3% yield.

[marktime1231] 29/5/2024 11:42

Thanks nexus fits the bill good suggestion I wonder why CREI is not more popular since it was recently able to pay a small special.

So I now have a candidate watchlist of four - SUPR, SREI, AEWU and CREI - all of which you could retire on if you believe the dividend is sustainable and safe if we are in the foothills of value recovery.

[nexusltd] 28/5/2024 20:56

@marktime1231. CREI Stats - diversified REIT
• Assets 589.1mn
• NAV per share of 93.4p
• Net gearing 29.2% loan-to-value as of 31 March 2024
• Weighted average cost of aggregate borrowings 4.1%
• 140mn term loans @ average fixed rate 3.4%,,average maturity 6.3 years, first expiry Aug 2025 20mn.
• EPRA NIY topped up is 6.5% (margin 6.5-4.1)
• EPRA earnings FY24 5.8p, dividend FY24 5.8p - so fully covered
• Always paid a fully covered dividend since launch
• Dividend yield 8.3% @72.3p share price offer
• share price discount to NAV 22.6%
• +15% reversion

What do you think?

Edit: some more perspective here in post #376:

[marktime1231] 28/5/2024 19:55

Thanks appreciated. I rejected smaller REITS, ones which were heavily geared, ones cutting dividends through lack of cover or where the yield appeared exceptional because of an uncomfortably wide discount to NAV. Not attracted by exclusive focus on offices, student digs or high street retail. Doesn't leave many yielding 6.7% plus which pass the test.

Will look at SERE, and again at AEWU.

Not that I expect a sudden exit here, but it doesn't hurt to be prepared.

[skyship] 28/5/2024 12:54

marktime - see my Post below:

[marktime1231] 28/5/2024 12:41

Quietly looking around to see which UK high yield REIT might be a candidate to rotate in to should the need arise. SUPR and SREI were the ones which screened best, any other suggestions?

[marktime1231] 09/5/2024 11:56

Quite, boasting about the low average interest rate but the Oct 2025 refinance deadline fast approaching. I still think AIREs way out of this is to be absorbed by another income hungry better financed REIT in the meantime. A takeout for cash or shares at 10% discount.

A bit disappointed that NAV has eased and that the outlook is for values to turn a corner, I thought we already had. BoE MPC not helping.

Meanwhile lapping up the distributions.

[makinbuks] 09/5/2024 10:18

5 tenants looking to extend plus 3 rent reviews this quarter will help dividend cover. Makes sense given the cycle to leave refi as long as possible