Custodian Property Incom... Share Discussion Threads

[skyship] 06/3/2017 17:38

HEY - since my post this morning we've added 33% to the sum of all knowledge on this thread - WELL, perhaps not that....but certainly to the volume!

[skyship] 06/3/2017 17:36

Cashflow is King - I would certainly agree with that, in all other than portfolio funds, ie ITs & Propcos...

[eezymunny] 06/3/2017 17:03

Hmmm...they sound like the words of a property valuer who wants his fees! Cash flow is king IMHO!

[skyship] 06/3/2017 16:39

Eezy - the two main reasons for yield differential are the asset allocations across Geographical Region & Investment Sector (Offices/Retail/Leisure/Industrial).

[eezymunny] 06/3/2017 16:02

CREI yield here is about the same as PCA would be if PCA paid out same % cash flows as divis (it currently pays out a lower % so the yield is lower than CREI).

Gearing at CREI is 25% but much higher at PCA (39% at last b/s).

AEWU yields 8% here but would be more like 7.2% if fully covered and again has very low gearing 20% LTV.

Would you prefer to own a 5% yielder with 39% LTV or a 7.2% yielder with 20% LTV?

NAV's will presumably factor in quality of tenants, average outstanding lease etc but across a decent sized portfolio my experience says that's not such a big deal.

[skyship] 06/3/2017 15:42

Thanks all - just usual Market discrepancies I suppose; that and institutions trading Other People's Money.

Still, contrast CREI NAV & Yield with that over at Palace Capital (PCA). I posted the story over on the CP+ thread today. Worth reading last month's Investor Presentation (link on that post) and noting the Yield of 5% and the 17% DISCOUNT.

Personally I would never HOLD/BUY a propco trading at a premium; as it will inevitably trade to a discount in time.

[speedsgh] 06/3/2017 13:37

SKYSHIP - re your post #31. I note AEWU has also shot up recently & is now trading at 100.5p offer, a 5% premium to last quoted NAV of 95.62p. Maybe the sector is being bought?

[eezymunny] 06/3/2017 12:53

Twas ex divi on 19 Jan

[lord gnome] 06/3/2017 12:47

We are due a divi at the end of the month, so we will have an ex-div coming up. That should peg the share price back a touch, but nothing drastic.

[eezymunny] 06/3/2017 12:41

As I've said many times SKYSHIP, NAV is just an estimate constructed by a valuer. It's interesting but not even 1% as meaningful as cash flow and what dividends those cash flows can afford. CREI yields c. 5.6% at 113p and is very lightly geared.

So long as buyers find that yield interesting then I guess they'll continue to buy. UK 10 yr gilts yield 1.2%. I know which I'd rather own, given the state of UK Guv finances!

[lord gnome] 06/3/2017 12:08

No idea, Skyship, but I am staying with it for now.

[skyship] 06/3/2017 11:48

Hmm...I certainly read this one wrong; but can anyone explain just why these should stand at a 10% PREMIUM to underlying NAV!? They look absurdly over-valued...

[skyship] 26/1/2017 16:55

Credit where credit is due - the BoD of CREI demonstrate both chutzpah and skill as they manage to convince another institution to pay 106.3p for 7m propco shares with an underlying value of 101.9p! A 4.3% premium.

Shares up to 109.5p, so looks like a good selling opportunity.

[neilyb675] 04/8/2016 07:40

The Company has acquired a 105,757 sq ft distribution unit on Winsford Industrial Estate, located 10 miles from junctions 18 and 19 of the M6. Nearby occupiers include Henkel, Iveco and Jiffy Packaging.



The unit is let to H&M Hennes and Mauritz UK Limited on a lease expiring on 23 June 2025. Current passing rent is £423,000 per annum reflecting a net initial yield of 7.15%, with an expected reversionary yield of circa 8.5%.



The agreed purchase price of £5.55 million was funded from the Company's existing cash resources, resulting in net gearing1 increasing to 13.9% loan to value.



Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company's discretionary investment manager), said:



"We are delighted to have secured this modern, well located unit let to a market leading high street retailer. This recently refurbished unit is one of H&M's three UK distribution locations and includes circa 1.8 acres of potential expansion land to meet future requirements."

[speedsgh] 08/7/2016 09:35

Thought this comment in this morning's rns was interesting...

New Letting -

"The 'Brexit' vote, exacerbated by the largest Property Unit Trusts introducing a block on redemptions, has led to a heightened degree of uncertainty about the prospects for commercial property, particularly in Central London. Custodian REIT's performance is more closely linked to the underlying occupational property market than what is happening in capital markets. I believe a lack of supply, following many years of limited development, will continue to put pressure on rents to grow and positively impact occupancy rates in the diverse regional properties typical of the Custodian REIT portfolio."

[neilyb675] 08/7/2016 08:31

The Company has let a retail unit on High Street, Colchester to Metro Bank plc following the surrender of the existing lease, at a passing rent of £200,000 subject to upward only rent reviews, on a 25 year lease with a tenant's break option in year 15 ("the New Letting").



The unit was acquired on 4 January 2016 as part of the Indigo Portfolio, let to Burton/Dorothy Perkins Properties Limited on a lease expiring on 24 June 2016, with passing rent of £145,600.



The New Letting is expected to result in a valuation uplift of circa £1.5 million.

[speedsgh] 03/5/2016 19:18

Contained within the recent rns on 19/4...

Unaudited Net Asset Value as at 31 March 2016 and Intention to Issue Equity -

NAV per share of 101.5p as at 31 March 2016 (31 December 2015: 103.0p)

...Intention to issue equity at 104.9p per share implying a target yield(6) on new shares of 6.05% for the year ending 31 March 2017.

...In the absence of unforeseen circumstances, the Board intends to pay further quarterly dividends to achieve a target dividend of 6.35 pence per share for the financial year ending 31 March 2017.

...On 1 April 2016 the headline rate of SDLT for commercial property increased from 4% to 5%, with relief for smaller properties via a new SDLT-free band up to GBP0.15 million and a 2% band from GBP0.15 million to GBP0.25 million, replacing the previous flat rate. As a result, the increase in headline rate only impacts transactions above GBP1.05 million and then on a sliding scale as lot-size increases.

The Company's focus on properties with lot-sizes up to GBP7.5 million has partially insulated it against the one-off impact these changes have had on valuations, with its average lot size of GBP2.9 million seeing a valuation decrease of 0.25%. To put this into context, the costs of acquiring a GBP3 million property have increased by 0.61% and a GBP10 million property by 0.85%, and valuations are expected to adjust accordingly across the property market this quarter...

Reasons for the Placing and use of proceeds
Completion of the committed acquisition pipeline will increase loan-to-value to 20.6%, compared to target gearing of 25.0% loan-to-value, leaving limited headroom for further investment. The net proceeds of the Placing are expected to be used first to repay an element of the GBP26 million currently drawn under the Company's revolving credit facility ("RCF") at 31 March 2016. The remaining net proceeds are then expected to be used to acquire additional UK commercial real estate that can further diversify the portfolio and enhance income yield, such that the Placing is in Shareholders' interests. Net proceeds are expected to be fully invested within three to six months after admission of the New Shares, depending on the amount of net proceeds of the Placing.

[wirralowl] 28/1/2016 10:36

Only just seen this divvy increase, but very happy! 4.17pm is a strange time to release good news too, feel they might have had an even bigger share price reaction if they'd released it at a more conventional 7am.

[neilyb675] 27/1/2016 16:48

Custodian REIT (LSE: CREI), the UK property investment company, confirms its third quarterly interim dividend for the financial year ending 31 March 2016 of 1.5875 pence per share, to be paid on 31 March 2016 to shareholders on the register on 5 February 2016, will be designated as a property income distribution ("PID").

[neilyb675] 27/1/2016 16:47

DIVIDEND INCREASE !!!!

[lord gnome] 11/1/2016 09:28

I'm in as of this morning. Sold my CAL and switched into here.

[wirralowl] 01/12/2015 20:52

Still waiting for confirmation on mine from iweb.

[skyship] 01/12/2015 10:43

Received my full allocation.