Custodian Property Incom... Share Discussion Threads

[essentialinvestor] 09/2/2024 20:20

With all respect to API, I would prefer if this merger does not complete - however ii's will likely support so it's perhaps a done deal.

[essentialinvestor] 09/2/2024 17:04

Thanks Nick, appreciate the reply.

[nickrl] 09/2/2024 16:25

@EI i loaded up when CREI share price took a dive seemed too good an opportunity to get another covered high yielder in the portfolio.

[badtime] 09/2/2024 16:23

Waiting a bit to c if they go lower

[essentialinvestor] 09/2/2024 15:54

Added a few today.

[skyship] 09/2/2024 15:42

Well, personally I've just bought a few more API @ 52.45p - equivalent to CREI @ 67.24p - yield of over 8%.

[essentialinvestor] 09/2/2024 13:11

Nick, have you bought or added here?, thanks.

[nickrl] 07/2/2024 09:37

Gives us a bit more detail than was already released with the merger document although if ive read correctly saying NAV 0.4p down on what was projected then. Happy to see vacant properties being shifted and that they will all go towards lowering the RCF. Not so happy with them saying the CAPEX is "expected" to give a positive return. Anyhow merger or not with API it created a very nice entry price.

[pharmaboy3] 07/2/2024 09:15

Any thoughts on the merger?Yes or No?

[spectoacc] 22/1/2024 15:29

ii describe it as "Other" and don't appear to get quotes (but don't tell you).

This is the sort of thing the LSE/govnt should be working on, not trying to secure bubble listings, SPACs, or Kazahk airlines. Too many UK stocks aren't consistently tradeable across different platforms (EBOX another), and who puts their £20k in with the same broker every year.

[essentialinvestor] 22/1/2024 15:25

* KID 'issue' because of the corporate action? - at a guess.

[nickrl] 22/1/2024 10:10

@dr biotech CREI's tell us they are using proceeds to lower the RCF (6.9% IR)which isn't a bad thing. At HY24 it was c24% of borrowings but c40% of interest charges so this will lower finance charges bur would have been nice to know what yield it was sold at.

[dr biotech] 22/1/2024 09:41

I've bought in here. I see it as a bit of hedge against my substantial API holding should the deal collapse, and if it doesn't it seems like a good opportunity to get another higher yielding investment into my ISA. Commercial property makes up 12% of holdings now which is enough. Hopefully if interest rates come down it will underpin the share price and the underlying portfolio.

Decent sale today too. Hopefully API will shift a couple too.

[riverman77] 22/1/2024 09:40

Well I bought in this morning. CREI look a well managed outfit - the increased scale means this should rerate once deal goes through. I think the market reaction is wrong in this case - just because API was trading at a 40% discount, does not mean their properties are worth 40% less than their book value. It merely reflects lack of confidence in the management team as well as general apathy towards these sub-scale diversified REITs. Of course these issues will no longer be relevant when deal goes through since there will be a new management team and API will become part of a larger, more specialist REIT which should attract a higher rating. Ultimately, CREI have got their hands on some decent, mainly industrial properties (with good reversion potential) 25% below book value, while instantly increasing their scale towards the magic £1bn figure which should ensure a better rating.

[arbus5000] 22/1/2024 09:28

a good deal for all involved due to the ample discount offered by APIs assets, compared to the free market.

[petewy] 21/1/2024 12:16

The combined industrial and retail holdings (44 per cent warehouses, 20 per cent offices, 18 per cent retail parks) are good enough for me to get in at this price.

[skyship] 21/1/2024 10:48

A useful "Merger" presentation over on the CREI website:



I suspect CREI will open Monday at minimally 72p; and climb from there.

Why the house broker wasn't supporting CREI after breaking the news, is perhaps rather surprising.

[riverman77] 21/1/2024 10:33

Specto, you're assuming the market was completely rational and correct in giving one trust a 40% discount and the other a 15% discount. The difference probably just reflects the perception of the qualities of the 2 managers, not because the API properties are inferior and worth less. If that is the reason then it should no longer be relevant since CREI will assume management.

Discounts often become entrenched for no logical reason. Putting the discounts aside, CREI are getting a decent portfolio of properties for a 25% below NAV, plus the benefits of scale which should lead to a better share price rating over time (lower costs, cheaper finance, better liquidity and more demand from wealth managers who increasingly won't look at anything below 1bn)

[nickrl] 21/1/2024 08:36

@specto post the announcement they are now trying to mash a 27% one with a 35% one I like CREI pretty conservatively run and always give good transparency but there was better value until Friday so given the a/c had the EPIC cash saved me postulating for too long given its 20% drop over 48hrs. Wonder if CREI BoD expected that!!

[pharmaboy3] 20/1/2024 19:01

Share price movement totally expected. Arbitrage in place till signed off.Combined assets should place it comfortably into FTSE 350, even 250.Then, the trackers move in ,massively increasing liquidity. Watching the video, the CEO hints they could sell off a couple of assets PDQ

[spectoacc] 20/1/2024 15:21

The reason, as posted on API thread first thing, is that they're mashing together a ~15% discount REIT with a ~45% one, of similar size.

Ergo, discount of combined entity will be c.30%, all else being equal (which it largely is, considering the properties don't change).

If you're going to stick REITs together, which does make some sense, either don't do it NAV-for-NAV, or better, do it with ones on similar discounts.

[riverman77] 20/1/2024 14:52

Yes API dividend is only 80% covered and the property portfolio itself also quite low yielding (the high dividend yield is only because of the wide discount and low cover). Not done a proper calculation but looks like the combined entity will have an uncovered dividend following the deal - perhaps that's the reason for the share price reaction?

[nickrl] 20/1/2024 14:13

@riverman pre covid they would regularly issue 1m shares at slight premia and probably had coterie of wealth mgrs that were pushing it to their clients so had a reasonable following. Its never fallen back like many of peers and dividend has been covered at cash level so absorbing API who are way off covering dividend is going to undermine that metric if the deal goes through. There are some sweeteners on charges may forestall it long enough for reversionary income to close the gap.

[skyship] 20/1/2024 13:16

CREI very well-managed; but historically always rated too highly versus more than competent peers. Hence 2yrs ago the shares always traded at an NAV premium - for me a total No-No for any investment company.

The driving force here is the MD - Richard Shepherd-Cross. Used to walk on water; but reputation now trashed in a single day as the Market predictably slammed this all-share merger.

Didn't expect quite such harsh treatment, otherwise would have sold my API first thing! I didn't.

Now CREI have crashed to c69.5p where the discount is nearly 26% and the yield 7.9%. So IMO the fall well overdone. Would have bought Friday - but no cash on my a/c.