ASLI looking really cheap at 59.6p, esp as fellow liquidation stock API is powering ahead; also EBOX - a fellow Euro logistics play |
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. |
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. |
Busy again today, offers up to 71p for my last piece of AIRE |
How strange. Couldn't sell yesterday at any price, sold ex-div today in what is a busy market for AIRE. |
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. |
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. |
@marktime getting in the financing window but no need to rush if IRs are dropping back |
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. |
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. |
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. |
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. |
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. |
@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: |
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. |
marktime - see my Post below: |
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? |
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. |
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 |
No mention or any refinancing challenges though. |
Q1 update continues the NAV decline and confirms divi just covered despite the recent disposal proceeds not yet reinvested. |
Despite i bought for yield wish i sold out when these went above 70p as am not convinced the BoD know what they are doing here anymore and they are taking out 110k/yr for the privilege. especially as they cost us 110k/yr. Now swapped to another inv adviser why do we need an adviser at all and at what cost? Inv advisers just want to churn the portfolio and selling that hotel may have made a few quid but we've forgiven a hefty income stream which is a long way from being neutralised hence the fall away in cash generated over the last six months. The clock on the loan is now inside 18mths and have to concur with @marktime assessment above that the divi is going to have cut to balance the books. |
The observation was made at the time, why have they put the dividend up when they will only have to put it down again. The answer was because they can, the new level of dividend is just about covered until refinancing. And then it has to be reset, as my sketch of the sums shows. Unless there is m&a in the meantime.
A takeout remains an option while there is such a wide discount to NAV and while the acquisition of AIREs portfolio would enhance the income and dividend prospects of the acquirer (which is all of them). Deal costs do not have to be prohibitive, and given the level of gearing a cash offer would probably be welcomed by backers with debt problems of their own. I'm not suggesting it is likely, but it is a possibility and I am hopeful. |
SteMis - agreed with yr above.
Marktime - personally I don't see a bid here - far too small to bother with as the costs of a public offer would be too high as a %age of the Net Assets.
Just view these as a high-yielding bond; same as with AEWU. |
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