Ediston Property Investm... Share Discussion Threads

[wirralowl] 05/6/2018 12:22

Anyone else still waiting on their May divvy? Still nothing in AJBell, so given them a little 'nudge'.

[badtime] 20/4/2018 12:16

Bit of a weird spread currently

[skyship] 17/4/2018 07:20

NAV rises 1.3% in Q1'18:

"The unaudited NAV of the Company at 31 March 2018 was GBP236.59 million, or 112.48 pence per share, an increase of 1.32% on the Company's NAV per share as at 31 December 2017."

bb - what an excellently timed purchase. Well done you...

It was certainly a very poorly executed sale going through then; and with hindsight should have used that opportunity for a top-up.

[belgraviaboy] 23/3/2018 15:36

I was concerned there may be something company specific.

Yields rising and sector weakness have been present for some time and the shares had still held up.

Anyway - having been on my watchlist, I finally picked some up just below 104p. Seemed a decent entry point

[badtime] 23/3/2018 15:08

Sector weakness..

[westcountryboy] 22/3/2018 18:54

You mean because of the Bank declaration on a likely rise in interest rates in May?

[skyship] 22/3/2018 17:35

I assume on yield grounds. Even with 5.75p the yield at 110p was "only" 5.22%. At 105p that has increased to 5.48%; whilst the NAV discount has widened out to 5.5%.

Annoying to effectively lose a year's income in 2days; but EPIC will remain a core portfolio holding, especially as that NAV is likely to see a good increase in 2018.

[belgraviaboy] 22/3/2018 16:00

Any reason this has fallen out of bed today?

[skyship] 28/1/2018 14:03

NAV per share at 31 December 2017 of 111.02 pence (30 September 2017: 111.32 pence), a modest decrease of 0.27%, after taking into account capital expenditure and costs of the Acquisition.

The unaudited NAV of the Company at 31 December 2017 was GBP233.52 million, or 111.02 pence per share, a decrease of 0.27% on the Company's NAV per share as at 30 September 2017. Property valuations increased by 0.76 pence per share supported by capital expenditure of 0.25 pence per share. The principal movement was the incurring of a one-off transaction cost of 1.14 pence per share relating to the acquisition of a GBP144 million property portfolio, a capital raise of GBP88.7 million and a new debt facility of GBP54.2 million.

[sleepy] 04/1/2018 21:13

Sky

Respect what you say about Mucklow and very much thank you for the 2018 JDT thread

I have followed Mucklow for many years (occasionally have been a shareholder (not currently or for some time) and I also have direct commercial property interests) and would like to make two points:

1)They are family owned and run. Their objective is to benefit the family through growth in asset value and dividends. This compares to the recently established REITs where a major (main?) objective is to increase AUM so that their investment management fee income is maximised

2)as stated in their 2012 interim statement

“50th Anniversary

In April 2012, A & J Mucklow Group will be celebrating 50 years as a listed company. Its principal objective has always been to deliver steady, long-term income and capital growth for its shareholders.

The Group's financial performance has been exemplary since it was floated on the London Stock Exchange in 1962. The ordinary dividend has increased in 45 out of the last 50 years and never been cut.

An investment of £1,000 in Mucklow shares in 1962 would today be worth around £1.6m, assuming dividends were reinvested. The total shareholder return has averaged over 16% per annum for the last 50 years‡”

My understanding and belief is that their asset valuations are conservative (is that always the case with REITs?). I have a little knowledge of the Birmingham property market but no specific knowledge of the Bull Ring Trading Estate

I have not studied their last annual report but two possibilities come to mind regarding the very large excess to book value of the Bull Ring Trading Estate sale

1) properties are valued based on their existing use or

2) given its size and location its value is as a development property. By their nature development properties are more difficult to value than most other properties and the valuers took a conservative (over conservative?) view. Possibly a special purchaser (eg a developer who owned adjoining property) was prepared to pay a premium price?

Perhaps someone more familiar with Birmingham would like to comment?

[skyship] 03/1/2018 17:44

Ho Jombaston

Yes, I have MKLW in the Header on the Commercial Property thread - (CP+) - see link:



Not one I really like as I won't buy propcos at an NAV premium. At 30th June valuation the premium is just over 8%; though that could well come down to 3-4% with the Interims in February. Aided by that bizarre sale of the Birmingham Trading Estate for £13m v. £5.4m valuation! How could they have the value so wrong in their books!

Also the yield @ 4.3% is hardly generous these days; and their gearing is over-cautious...

[jombaston] 03/1/2018 16:32

Thanks for the link, Skyship.

CREI is a well-run company with one of the highest covered yields in the sector, with room to edge the divi up over time. RSC also talks a lot of sense. If it were at NAV it would be a 6.1% yield which would be too high especially now that they have executed well over the last 3 years.

Clearly, EPIC is more of a bargain probably more due to current overhang of stock rather than anything else. I don't have any insight as to how long that will last. I have taken a small position to encourage further research. Certainly, analysts are increasingly suggesting retail warehousing is the place to be.

In case you missed it, this is what Deutsche Bank are saying.



P.S. if you are interested in quality players in Midlands property, you should look at MKLW. Their track record is exemplary. Div might be slightly lower than some of the others discussed but look at the cover, low debt and progression over a very long period.

I own shares in all the above so please DYOR.

[masurenguy] 01/1/2018 09:42

At the current shareprice of 110p, the yield is 5.2% based upon the new annual dividend of 5.75p.

[skyship] 31/12/2017 16:48

CREI isn't my favourite in the new "Income" sector due to its NAV premium. Personally I prefer EPIC, RGL & RLE; but whichever, this interview explains exactly why I believe the sector to be safe for income and growth:

[jombaston] 18/12/2017 16:46

Thank you for your responses. Coincidentally, this attached report from Colliers has appeared hot of the press. I would definitely recommend reading it if you are invested in this stock.

From my calculations, the recently increased dividend does seem sustainable. Thanks in part to rent guarantees, it seems that the new portfolio should produce a gross yield similar to the pre-existing portfolio. If they can achieve economies of scale in admin costs and some rent increases then there could be room for future dividend increases.

I have been looking to buy pure Warehouse/logistics REITs but the premiums all seem to be in double-digits so I am considering this as an income play. I have been invested previously so I am comfortable with the management.

Importantly, the prospectus says they will only issue at NAV plus so this provides some comfort given that it is now close to NAV.

I'm still interested in any cheap Warehouse REITs if you have any ideas(with a track record - before you suggest WHR!)

[skyship] 13/12/2017 15:27

The EPIC management is Industry recognised as one of the best in the sector; so more than happy to delegate my cash to their ambitions.

In the same space I also like RGL where the yield is an even more impressive 7.7% on the Edison f/c of 7.85p for this year just ending. (Divi qtly - 3x1.8p thus far...)

[hiddendepths] 13/12/2017 14:17

Agreed, alter ego. The company points out that warehousing assets have rebounded quite a way and RETAIL warehouses haven't budged since the hit caused by the Brexit vote.

It's interesting that they beat off Savills for these assets. Those guys are no mugs!

From the prospectus:

The confidence behind the proposed transaction is built on the knowledge of the Manager who is an
experienced investor in and developer of retail warehouse assets across the UK. It believes it is the
right time to increase investment in this sector for the following reasons.
• The sector is currently experiencing low vacancy rates (currently 5.1 per cent. versus 10.0 per
cent. in 2013).
• There are good prospects for rental growth and inward yield movement.
• New retail warehouse development is likely to be restricted by planning authorities looking to
protect town centres.
• Retail warehousing offers a flexible sales platform which can assist with retailers’ online sales
strategy.
The Manager believes the retail warehouse sector is attractively priced following the hardening of yields
in the industrial and logistics sectors. It believes there is increased investor interest and expects this to
have a favourable impact on yields.

[alter ego] 13/12/2017 14:12

I'm not sure how much these assets would be driven by (or could assist with) on-line sales.

If I understand correctly, these are not just warehouse storage and distribution sites such as those owned by BBOX. They are more a shopping destination that combines retail space with warehousing so a DIY store or a clothing retailer can keep stock and display it for the retail public.

There are a number of reports available from companies like Savilles or Colliers which give more on the attractiveness of these assets. Google "retail warehouse parks" for example to access reports like this one

[jombaston] 13/12/2017 13:29

Just looking at the prospectus to see if there is an opportunity here.

It seems that these guys are going heavy into Retail Warehouse Assets.

Warehouses are a hot sector at the moment but these don't seem like pure warehouses to me - more like large shops on Retail Parks! Not sure there would be such a premium for these.

I'm not sure how much these assets would be driven by (or could assist with) on-line sales. Or maybe the sites could be valuable in the event of a change in the Retail environment. Do others have a view on this?

[hiddendepths] 13/12/2017 12:44

I suspect some arms were twisted to get enough of the new stock away to allow the acquisition to take place. This explains the ongoing availability of shares at the issue price - and occasionally a little lower.

It is not clear how much of an overhang there is. i am inclined to buy a few if I can get them at under 111.75. I was too slow to move on Monday though!

[rollingstocks] 02/12/2017 10:51

The subscription price is actually 111.75p - from p28 of the prospectus: "Share Issue Price per New Share 111.75 pence per New Share representing a 1.4 per cent. premium to the Adjusted NAV per Share as at 31 October 2017"

[davr0s] 30/11/2017 19:39

You might be right but see no benefit subscribing to shares at 11.75 when I can buy below this on the open market

[jdepp5] 30/11/2017 09:12

It is one of quite a few property/infrastructure fund raises going through at the moment so investors can be selective and the ones that get away do well (such as CSHc). Assuming they get it away, and the vendor has agreed to buy 36m£ worth of shares if I recall correctly the figure, locked in for 1 year plus, then I think price might well rise as
1. it could well be oversubscribed
2. management is very well regarded it seems for this co., div is covered and increasing and will show enactment of a definitive investment plan and put co on radar of other investors as it is doubling in size.
3. premium applied to warehouse assets and this is immediately income producing.

All my opinion clearly, so fell free to shoot down!

[davr0s] 29/11/2017 19:22

Yes you are right re 11.75 but on what basis do you think it will trade at 114 afterwards?