@spooky mkt seems to believe its a totally naff deal and have bashed CREI down to atl. Its not the best deal for CREI i would have gone to PCTN myself but API BoDs clearly feel the time is ripe to clear out. |
Not sure the posts on this make much sense. The implication in posts above is that CREI is a 'good' REIT, a thought primarily driven by the lower discount to NAV. API on the other hand is a 'bad' REIT because of its significantly higher discount. On that basis i would assume that the market has a positive view on CREI management. They have undoubtedly looked closely at API and have concluded that there is merit in the combination. They could have struck a deal with a number of alternatives but they have chosen API. CREI will be acquiring assets at a circa 25% discount and will benefit from a number of cost saving synergies. I think the deal makes compelling sense for both parties and 20 years ago would have been backed enthusiastically by pension funds. Unfortunately, there no longer appear to be any long term investors in the UK market. Backing management doesn't appear to be on the agenda anymore. |
I'd agree. This is going to get voted down. |
So called deal dead in the water Day 1.... |
So if it isa good deal for shareholders why has the price dropped by 9 percent ??? |
Sale of office property "....36% ahead of 30 Sept 2023 valuation". No idea what they originally paid for it but thats quite an uplift in just 3 months. |
As nick says above - far better value elsewhere.
A bit speculative but looks well overdue a large bounce back - CLI.
At 97p - 66.6% discount and a very well-covered 8.2% yield whilst you wait. |
Edison review on CREIhttps://www.edisongroup.com/research/occupier-demand-continues-to-drive-income/33071/ |
HY results tell us this one is steady as she goes free cash easily covers the divi. No debt issues for a couple of years but the unhedged RCF (6.7%) is being loaded up with capex although they have a few more disposals bubbling away. Not on much of a discount here with a yield of 6.3% and with divi looking unlikely to grow much from here unless they can fill the voids. Better value still available elsewhere. |
Q3 NAV delivers another NAV decline and seems valuers have the knife out on offices particularly now. Also good to see that even with increased cost of the RCF (6.84%) from recent capex they are keeping the divi covered. These have proven more resilient than others recently and have always been very transparent on each asset that others could learn from but better value remains elsewhere currently. |
I hear what you're saying SKYSHIP. I like CREI. It's solid & offers some value. It just feels like there are other high quality REITs out there that are cheaper eg SUPR. |
Q2 update slight drop in NAV with divi maintained and covered. RCF nearly maxed out with more capex in the qtr but can be expanded by another 10m which they will need i suspect given they've bought the leasehold on an industrial estate. RCH has a year to run but given its floating already they aren't hugely exposed on finance costs unless things worsen.
Another one where divi wont be going anywhere for a while and good that its covered but margin will get eroded away within a year i reckon. |
Jeex Pharma - you have the patience of Job.
You've been locked in for 9yrs earning dividends of 5.77%pa. Lose capital at a rate of 1.44%pa and you seem happy with an annual return of 4.33%!
Certainly wouldn't suit me; may not even suit EezyMunny.
I compound at 15%pa; and certainly need 10%pa to fund a 7% drawdown and add more to the pot each year.
Why are you happy with CREI and 4.33%pa? Or have you perhaps not realised how bad an investment it has been.
So, you can now ditch CREI (c90.2p), buy into the 3 alternatives I recommend above & thank me in a year's time.
You're welcome... |
Eezy - this is that 1st para:>
"The commercial property sector can provide rich pickings for VALUE investors prepared to spend a little time analysing the principal metrics of Yield, NAV discount and LTV; then delving into the detail of financing, tenant mix, lease lengths, sector spread, geographical spread."
So what piece do you not understand of LTV & financing?
Then why do you go on to rant against the qualified valuers? "it´s important to look MUCH deeper than some valuation from a thicko property valuer" !!!
I suspect they know a lot more about the commercial real estate market than the both of us; and anyone else posting here... |
Your posts always seem negative. I assume you're not invested in CREI, so why bother sharing?I bought in at 104p ,from float.the 12% reduction has been more than offset by the £250k divis I've received since launch.I'm definitely not an expert in this area, but the people who run the business are trustworthy, hardworking folk.They constantly upgrade the properties wrt ESG They also oversee a Private Investor Club,giving high net worth individuals a chance to invest in more high-risk opportunities. Most of which have been successful. Please remember they are also backed by Mattioli Woods,whose culture is fully aligned with CREI. |
So why write stupid, over easy posts as per post 189?
By the way the CP+ header is pretty daft, too "It is a sector relatively immune to the conventional trading company risks of competitor action, margin erosion..."
How about net margins getting absolute crushed by increasing interest rates? If you think discount is more important than gearing/debt at the moment, and what interest rates are/are not locked in and for what periods etc, then you´re doing a HUGE dis-service to the uneducati IMO.
When the head of the US Federal Reserve says "I DO EXPECT THERE WILL BE LOSSES IN COMMERCIAL REAL ESTATE" it´s important to look MUCH deeper than some valuation from a thicko property valuer IMVHO. |
Eezy - a stupid, lame, over easy critique:
No, not at all. Check out the first para in the Header on the CP+ thread.
Discount and yield are however the two most important metrics denoting stock-market value. |
SKYSHIP, are discount and yield your only metrics for determining relative value? That looks a very weak way to analyse to me... A lazy way... |
Still over-valued at 90.25p. Discount 9.1%; yield 6.1%
# API - 50.3p - disc. 39%; yield 7.95%
# EBOX - 57.7p - disc. 37%; yield 7.5%
# SREI - 45.0p - disc. 27%; yield 7.4% |
FY23 results yesterday show the ship steady as she goes. Majority debt fixed for many years and divi modestly covered but unlikely to progress much from here. Not on much of discount either but yields 6.1%. |
Interesting @nickrl, thanks. That's a curious one - so rent goes up all of £293k a year, yet they're having to spend £3.9m now? I'm not convinced that's much of a deal for CREI.
10 year, no break new leases are great, yet how secure is the covenant?
And unless I'm missing something very obvious, they're spending £3.9m to get back £2.9m in extra rent, spread over 10 years.
Granted, maybe that EPC work needed doing anyway, and at least they are getting some of the money back. But it works out at c.7.5% (by my maths) on £3.9m. Very marginal over CREI's borrowing cost, and surely there's offices that could be purchased at a higher yield for that.
Likely the shape of things to come tho. |
Mar'23 NAV 99.3p v. 99.8p as at Dec'22.
Confirms steadier times; though most peers reporting a slight rise.
What is remarkable is the c5% discount and 5.8% yield @ 93.5p. Far, far better value elsewhere. Top buy perhaps API on a 38% discount and 7.6% yield. |
Slight decline here for Q1 NAV.
This one always good with transparency on lettings but this one caught my attention specifically
"Exchanging AFL with First Title Limited (t/a Enact Conveyancing) on two office buildings in Leeds. The transaction will see CREIT fund the comprehensive refurbishment of both buildings to achieve A rated EPCs at a total cost of circa £3.9m, with the tenant taking on new 10 year leases without break on completion. Following completion of the refurbishment the aggregate annual passing rent is set to increase from £649k to £942k, a 45% increase, with an expected increase in valuation of c. £1m above expenditure once completed"
Basically up front capex recovered through rent and they get a A rated building on the books.
SP recovered back to nearly par here yet others come nowhere near for similar portfolio mixes. So certainly seems to have a fan base. |
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