Abrdn Property Income Share Discussion Threads

[spittingbarrel] 19/5/2023 14:30

I keep thinking of buying some but the chart is putting me off at the moment. Someone persuade me...

[chucko1] 19/5/2023 13:46

Indeed, the refinancing was a little bit of a fiasco. You can tie the relatively poor share price performance largely back to that period, from which it has not recovered.

But the high rate it fixed at is historic, and the loss taken. Even the ongoing high strike on the cap along with amortisation of swap breakage costs allow a substantially covered 4p dividend over that period. This makes API at its current price a play on future interest rates as much as anything else. Normalisation of their financing rate would see this outperform significantly, but I reckon you will have to be patient on that.

Nevertheless, I own a few for the first time.

[riverman77] 19/5/2023 10:38

Took a position too this morning - discount looks out of whack with sector. API has solid long term record (NAV growth over 5y and 10y is actually the strongest amongst the diversified REITs). They have a fairly low office exposure - the sector I'm most concerned about, and strong weighting to industrials - still the best part of the market. The manager has been there since 2006 and has good track record. The debt refinancing last year is the only black mark but that's now been sorted out and I think the overall cost of breaking the swap was only about 1% of NAV so not the end of the world.

[stupidboypike] 19/5/2023 08:51

I also joined sky yesterday. You have quite a following sky!!!!

Best regards SBP

[skyship] 19/5/2023 08:41

hybrasil - welcome aboard - hopefully will pay off in relatively short order...

[hybrasil] 19/5/2023 08:39

Thanks to skyship I have bought a few here this morning.
I think interest rates are probably close enough to peaking.
Here’s hoping!

[giltedge1] 18/5/2023 15:32

Closed my soreadbet on CSH got lucky & reinvested here at 49 seemed a good risk/reward. Have physical CSH as well tempted to sell in case buyer pulls out, has happened in other bids. Look to reinvest 50% API & 50% SHED.

[pavey ark] 18/5/2023 14:49

Well I also have cash to spare having bought into a very small AIM company in January (three times) and when the price continued to fall I bought more in March (again three times).

Following one of my golden rules that if I buy (repeatedly) on the way down ...I sell (repeatedly ) on the way up.

The price had recovered but a big jump today so have now sold 60% of my holdings.....more up side but "rules is rules"

API looks very cheap .... things can always get cheaper but hopefully there is a limit.

Have bought four times yesterday and today so rather well stocked.

With dividend and recent purchases my average is approaching 50p/51p

I agree that 55p looks a near term possible bounce but 62p would still give a 6.5% yield.

I see that the AGM has a share buy back included for 15% of shares.
I would expect any company paying an 8% dividend on a 40% discount would buy back shares but other rather obvious constraints apply here.
However it wouldn't be difficult to make a case for a buy back up to say 65p with the average being considerably lower .....even allowing for the cost on the RCF...who knows??

"you pays your money you takes your chance"

[skyship] 18/5/2023 14:04

So, reinvested some of the cash raised from selling EBOX, into API - the one I now consider to be the outstanding BEST BUY in the REIT sector.

API, a generalist like many others, is now anomalously cheap at 49.4pXD - NAV discount at 40%; yield at 8.1%.

I would expect them to recover in the short-term back up to 55p for stats of 33.3% & 7.27%...

[skyship] 18/5/2023 08:59

Ahh - thanks for that reminder. Great value here and now rather anomalously cheap versus peers.

Cashed up after taking the turn in EBOX; so may well add, even though now at my usual MAX allocation of 10%.

[cwa1] 18/5/2023 08:50

Ex a 1p dividend this morning, pay day 31/5

[jonwig] 18/5/2023 08:45

New video (may need to register, free) -



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Pavey - your posts are very informative, so are Specto's. The ad hominems are a distraction.

[giltedge1] 18/5/2023 08:38

Hello Pavey, thanks for the reasoned logic of Morrisons purchase, yes agree, it could be repositioned in a worst case scenario to residential. But Morrisons should carry on a good 10 years even if overleveraged etc. I have owned API in the past, so know the manager has made some good decisions. API is now on my watch list, seems good value at these depressed levels. Ticks all the boxes, leverage, dividend etc.

[pavey ark] 18/5/2023 08:15

giltedge1, If you look back you will see I have been very upfront about my purchases and I have posted fairly detailed reasons for my purchases (with actual numbers).

I own these shares !!
Shock horror I think they are good value !!

On the other hand we have a poster who posts 30-40 times a week on a whole range of companies he doesn't hold nor I suspect has any intention to buy.....I think it makes him feel important ...passes his day !!??

Re Morrisons: Yes questions have been raised but as usual it depends if the questions are rational and balanced.

Management like the store position and turnover and I imagine if Morrisons get into trouble any new owner would keep this site (or another chain would take it over).
The terms of the lease look good.
People who know the site have said that it is large with housing all round so the site itself has considerable value.

Refinancing aside Baggaley has a good record so I imagine he has covered every angle and has gone ahead with the purchase.
The guy has a plan/long term outlook and increasing "others" in the portfolio was mentioned last year.

[hugepants] 18/5/2023 07:47

So the roadshow backfired? Wouldn't surprise me. Something else they should stop doing along with their regular economics forecasts which is really taking the biscuit! Still reckon this is very good value compared to the other reits eg. compare with UKCM's (Abrdn's other reit) valuation and look at the writedown in ebox's nav today.

[spectoacc] 18/5/2023 06:48

@giltedge1 - plenty of reasons above, if you ignore those with vested interests in ramping it for a quick turn.

Probably the most interesting thing is that the fall began after the roadshow on NAV day - someone (at least) decided it was time to sell down after hearing from the manager.

Don't think API is expensive here - just not cheap. But good luck (most of) those who think otherwise.

[giltedge1] 17/5/2023 23:39

API on a downward trend any reason?. Recent purchase Morrisons not the safest supermarket chain, highly leveraged. Not one I would have chosen, in decline.

[pavey ark] 17/5/2023 21:05

SpectoAcc a common feature in many, many of your posts is the repetition of some particular point.....here it is the implication of some distressed cutback in Capex and the "forced" nature any subsequent Capex.

In Q4: "CAPEX in the quarter £7.6m " Predominantly development spend at Glass Futures, St Helens."

In Q1 "CAPEX in the quarter £4.4m "Predominantly development spend at Glass
Futures, St Helens and Explorer, Crawley"

These are unsurprising amounts as the project was coming to an end and bills had to be paid.

On completion of this capital project API immediately began another substantial capital project starting with a £4m land purchase and the start of building a large commercial unit.

No intentional "flattering" simply one project ending and another beginning.

API is not distressed or stressed and have said that the dividend will be maintained and "substantially covered" over the next two years.

Rent revision, improved occupancy rate, development project coming on stream , reduced management fees, reduction of dividend payment(on fewer shares) on one side against the increased interest payments on the other.

I think API can calculate income and dividend payments with some degree of accuracy and their conclusion is "substantially covered"

I consider you to be a career poster and would prefer to ignore you but sometimes the nonsense and bias is difficult to ignore.

For everyone else: I added further today and now have a reasonable holding at 52p for a 37% discount and 7.7% yield......happy to hold but may add further tomorrow if things get silly....."you pays your money you takes your chance".

[rcturner2] 17/5/2023 19:51

No one knows what the future price of energy will be. People are always underestimating human ingenuity.

[hindsight] 17/5/2023 17:17

Without wishing to state the obvious the trades indicate a big seller is offloading this week

[spectoacc] 17/5/2023 16:39

@nickrl - the climate change effect too, future energy is going to be more expensive whatever is said about "trending towards zero". Was a time they said nuclear would be too cheap to bother metering.

AEWU a decent trader - but always been honest about the divi not being set in stone, even whilst paying it.

I don't see API as particularly promising while they're cutting CapEx. There's some forced on them at Hagley but it was a big drop last qtr, in order (IMO) to flatter coverage.

Still - it's all about the economy from here IMO. If it holds up, no reason REITs can't do well.

Good luck @ammons, API does appear the weakest of the small REITs atm.

[ammons] 17/5/2023 16:23

couldnt resist. took a few at 50.50p

[nickrl] 17/5/2023 10:01

@specto that is for sure a risk and to be clear im not suggesting that we will see outright deflation here as even at the current levels its still running 60% above the 2010's average. However, given the market dislocation in Europe from loss of Russian gas there is a level of normalisation emerging but there will be a reset to higher prices as carting LNG half way round the world is never going to be cheaper than piped gas from Siberia. So the question for me is whether the economy can at least bumble along at these levels rather than contract as that has to be a good proxy to at least keep the rents coming in. Rents pays divis, not paper NAV gains, which is why im largely only holding ones that cover the divi or at least 90% with a firm path to parity not a hope that ERVs will come good. Mind you that approach means ive avoided AEWU where it least they crystallise gains occasionally to fill the bank account which i admit was a mistake when the share price was lower.

API certainly looks more promising that it has done for a while but my assessment is the divi is still not quite at 90% and was hoping for an indication from them of what current contracted income was post the flurry of activity they did in Q1 but not reported in NAV update.

[spectoacc] 17/5/2023 06:48

Largely agree but the trouble with a view based (correctly) on energy prices being much lower, is what happens to energy prices in future.

[flyer61] 16/5/2023 16:42

That’s it nickrl….Britain muddles along..
For me, carry on!