Vacancy level is a big drag and like RGL disposals slow to realise. I also detect a slowdown on getting debt refi done from their more bullish tone 6m back.Will get done but maybe not at such favourable rates.
Well below my 90 threshold but it’s now not the only one tripping the buy threshold making feel cautious about sentiment at the moment. |
"..We are experiencing longer decision timelines due to macro and political factors slowing progress."
"..Letting activity was slower than forecast. "
But I'd also pick out the 49.6% LTV, falling to 44.6% if they get all the disposals away.
In the price? Probably so. I prefer to spot the negatives tho. |
Update reads really well - yet here we languish at 89p on a 61% discount & an 8.9% yield! |
Could be getting the Q3 Update this week. (15/11 last year - see Header) |
Interesting piece SKY, thanks for posting.
D. |
Thanks for posting that ...sp is a tad frustrating eh |
 Back down to 90p! NAV discount at 60%. Yield up to 8.8%.
Time to change the way we look at Reits
Changing market conditions call for changing valuation methodologies
IC - Published on November 6, 2024
by Natasha Voase
The property sector has always liked to do things differently. While other sectors debate price/earnings ratios and enterprise value to Ebitda, real estate investors wax lyrical about discounts to net asset value (NAV) and loan-to-value (LTV).
This approach made sense in the old world of declining yields and interest rates, says Tim Leckie, an analyst at Panmure Liberum. Falling rates meant shifts in portfolio valuation were a large component of returns. But now that rates are higher and valuations unsteady, Leckie says the focus must be on cash flow generation. Reits need to be able to generate enough cash to pay down increased interest costs and grow. For the low-yielding, low-risk portfolios of times gone by, this is a problem.
Yet for Reits, just as when it comes to valuing companies more generally, no valuation metric should be taken in isolation.
Harm Meijer, managing director and co-founder of real estate fund manager ICAMAP, says that this is why investors need to look at multiple valuation metrics, including net debt to Ebitda, funds from operations (FFO) yields and price/earnings ratios. "Every ratio metric has its drawbacks," Meijer says. "Because if [for example] you only look at the cash flow... the problem is you can really increase your FFO by just taking on more leverage, by buying assets."
Analysts at Panmure Liberum have created what they call the Medium Term Sustainable Earnings (MTSE) metric, a seven-year figure encapsulating reversionary potential, administration costs and refinancing drag. The MTSE total return blends yield plus growth to give investors an idea of what their medium-term cash earnings per share might be. The chart below shows the result of those calculations, albeit outliers such as Grainger's estimated growth rate should be treated with caution. With that in mind, the stocks that stand out: Sirius Real Estate (SRE), Urban Logistics Reit (SHED), Segro (SGRO), CLS Holdings (CLI) and Life Science Reit (LABS).
Analysing Reits through the lens of cash flow throws up some new names that look mispriced. Discounts to NAV alone might encourage investors to buy giants such as British Land (BLND) and Land Securities (LAND), given their discounts sit at around 30 per cent. However, from a forward-looking price/earnings perspective, they trade at 13.6 and 12.1 times, respectively, implying earnings per share of 41p and 71p. Even if investors favour Epra EPS of 42p and 50p, respectively, these valuations look fair or potentially a little high. |
If IC says sell do the opposite 😂 |
Wouldn't that have to be RNS'd on completion though? Perhaps that the reason its risen. |
Just having a look back at this thread over the weekend and post 215 caught my eye regarding Berenberg's note. According to their analyst second half property sales will be over £160M which is somewhat higher than shown in the recent accounts where Assets Held For Sale (note 11) are £132.7M of which £96.7M is the Spring Mews Property. It could of course be that CLI are expecting to sell another property but on the face of it this suggests that the student property/business has sold for around £124m/£125M. |
Hi Sky, I have sent you a private message today. |
Maybe some read across from this, despite it being very different underlying assets: "Tritax EuroBox backs Brookfield cash bid in blow for Segro" At a~12% discount to NAV. |
Just hope something is brewing; because if it is then it could result in a price way, way above 100p! |
wonder whats brewing |
....well since Feb that is |
Well well ..not seen three figures for a while |
As soon as IC says sell do the opposite |
96p. Never know, we may even see a little run back up to where we started 2024 - 102p.
free stock charts from uk.advfn.com |
Bit lively today |
Be nice to have some financials but given the Germans economic position isn't looking too favourable is a positive. |
CLS Germany leases 4000 sqm in Dusseldorf and Cologne |
Thanks guys for putting me straight about quarterly divis. Confusing when you see this:
Market Summary
>
CLS Holdings plc
8.63%
Annual dividend yield
1.99
GBX
Quarterly dividend amount |
It isn't (quarterly) :- |
Interim * 05/09/2024 2.60p
Final 21/03/2024 5.35p |
Thanks SKYSHIP but they say the divi is quarterly? |
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