Home Reit Share Discussion Threads

[williamcooper104] 01/12/2022 14:56

Nope - can't see anything on their web site

[tradez4dayz] 01/12/2022 14:54

Anyone got a link to 3pm call?

[williamcooper104] 01/12/2022 14:53

Yep - there isn't Key thing; total shareholder wipe out, given the balance sheet, is really hard to envisage - normally when a reit gets hammered it's the balance sheet - and normally best to stay well clear until the rescue rights issue or it goes bust Improving governance, replacing management, lots of things that can be done in short/medium term to improve the sp

[wallywoo] 01/12/2022 14:48

To me this is simple. You are taking a above average risk that more sh*t hits the fan. However, it will likely have a great yield and a share price that settles above 60p if it doesn't. There's never a easy win in the markets!!

[williamcooper104] 01/12/2022 14:34

Nope - talk the way I see it; with risks and opportunities; simple - it's a troubled asset class, it's over-rented, but balance sheet is great and share price has taken a huge hit - would I buy this at NAV - no chance - but at c50p I'm getting a projected > 10 IRR on a 35-40 percent rent haircut (DYOR my assumptions and even basic math may well be wrong) I'm generally very conservative, so if I'm bullish on something I'll always think of what could go wrong I would also far rather existing management acknowledged what's gone wrong, rather than delay pain and increase mistrust

[elbrus55] 01/12/2022 14:31

If you've leased an old property on tenant responsible maintenance for 25 years then I guess 90% of the value is in the lease and 10% is the residual value. After that time you may well be better knocking the thing down and selling the land for redevelopment. The residual value seems only important if the council doesn't have much demand for homeless accomodation at some point in the next 20 years or so. Why do you care how much the property is worth in alternative usage when you have no intention of selling it?Nobody asks Meta / Google how much their servers and software is worth if their advertising business model fails. They could reuse the hardware for bitcoin mining or something and get a fe cents on the dollar...If

[williamcooper104] 01/12/2022 14:23

Intending to build a long position; have just had a small nibble

[wallywoo] 01/12/2022 14:19

I don't understand, if you are not short and not long, why are you posting every 5 minutes???Imo no one spends so much time on a share BB unless they have a vested interest!!!

[williamcooper104] 01/12/2022 14:16

Anyone got the details for the call at 3 today

[bondholder] 01/12/2022 13:51

And they've done a really thorough job of removing all the copper pipe from the house !!

[paulof2] 01/12/2022 13:12

74Tom - The argument everyone has been making here is that Homes properties haven’t benefited from any of the appreciation in house prices over the last two years. Hence why the word fraud is being thrown around when it comes to the profits the developers made.

If that’s the case and the properties haven’t appreciated at all then why would they drop back now?

[williamcooper104] 01/12/2022 13:11

But that's something to watch once results are out Management buying into a turnaround does not mean that all is well Management not buying in is usually a run for the hills signal

[williamcooper104] 01/12/2022 13:10

Disagree on massive bargain But the debt is, in part, an asset - SGRO did a 19 year bond recently at 5.15 (from memory) - so the debts at least 300bp in money, 13 years of that is 42 percent, half that for discounting at an equity discount rate and it's about a £50 odd million fair value asset - as it's a fixed rate loan and not a swap HOME can't cash it in but keeping the debt means you get the full use of the asset Wonder if the debt has change of control covenants - my guess is that it would do - which limits its utility to any buyer - though sometimes the change of control doesn't fully catch holdco sales

[ammons] 01/12/2022 13:06

Silly ammons. Of course!!

[tradez4dayz] 01/12/2022 13:05

They can't until results are released they are in a closed period

[ammons] 01/12/2022 13:03

Perhaps the directors can put thier money where there mouths are and make some decent purchases down at this level. I bet they dont.

[williamcooper104] 01/12/2022 13:00

Interesting on the fall in UK house prices over next 24 months It's going to happen; almost impossible for it not to happen But the epicentre of it is going to be London and south east where expensive mortgages and affordability really bite That £60k family home in Stoke is still affordable with higher mortgages, the £600k shoebox in Stoke Newington really isn't

[williamcooper104] 01/12/2022 12:57

I'm not short at moment - why would I be when my guess of sp/valuation was c40-50p REITs pay out 90 percent of taxable earnings - based on IFRS sl rents So AFFO payouts will be more like 95 percent Little room for any further tenant insolvencies - unless HOME provides capital/incentives to new SPV/charities

[wallywoo] 01/12/2022 12:54

Of course, I think there are problems here. That's why I am picking up shares at 48.5p that were issued at 115p in May. It all looks a little incestuous, with directors both suppliers and buyers of house stock.Is it fraud though. Really doubt that. This was massively over subscribed in May. No fund is selling out. I expect a load of actions to be taken to improve corporate governance and the REIT will continue. In the meantime, shares can be picked up for a massive bargain.

[74tom] 01/12/2022 12:42

A bear raid? So just to be clear you don't think Home have done anything at all to invite the criticism they've received?

I'm not really sure how anyone could be comfortable holding shares prior to the publication of the full year results. On the call yesterday someone asked whether Home would consider getting an new independent auditor (i.e. not BDO) to redo the audit and provide confidence in the numbers. The response from home was it would likely take 3-4 months so wasn't something they had properly considered at this point. However, if shares don't recover at all or BDO aren't comfortable signing off the accounts then they may not have a choice. If that happens they you are very likely looking at a short term suspension of trading as they will miss the end of Feb filing deadline (6 months post period end).

Ps. @retailgains, you say NAV of 73p is not far off the worst case scenario but you don't seem to have considered the fact that UK property prices are going to come under severe pressure over the next 12-18 months. If they were to fall by 20% then bang goes another 15p of NAV.

[wallywoo] 01/12/2022 12:25

Well good luck with your short. See you in a few weeks.


Reits are legally obliged to pay 90% of net rent / earnings in dividends. Will rent stop here? Nah. Anyone short has to cover the dividend, so potentially hugely expensive to be short here.


Very comfortable holding at this price point.

[williamcooper104] 01/12/2022 12:01

I'm getting quoted a borrow fee of 120 percent - that's down from 180 a few days ago and 3x margin Likely large shorts have lower borrow fees, but still likely to be uncomfortably high

[williamcooper104] 01/12/2022 11:56

What shouldn't happen is each time an SPV/charity goes into admin, HOME pays a new SPV/Charity to take on the old lease Far far better to take the pain and let market find a true clearing price - and above all else be impeccable in transparency/disclosures