Ing Uk Real Estate Income Trust Share Discussion Threads

[madmix] 17/12/2010 12:07

Well, that's me out at 53.37p.

Discount to NAV and uncovered yield not quite so attractive as they were lower down. A 22% return (including 1p dividend) in 3 months isn't bad in this sector.

[lord gnome] 17/12/2010 11:03

Onwards and upwards today. Clearly the market begs to differ with Messrs Oriel.

[tiltonboy] 16/12/2010 14:47

Lord Gnome,

Thanks. One of my better traits!!!

[skyship] 16/12/2010 11:49

Interesting statement from IRET today. It has helped the share price continue its upward path since its recent breakout through the 47p resistance. Target looks to be 52p, at which level the yield falls to an uncovered 7.7%. The NAV discount falls to c12%.

Personally I screwed this one up when I decided to go 25% liquid a month ago; and one of my sales was IRET @ 47p after they went XD. Allowed myself to be put off after that covered/uncovered divi debate. My fault. Took a turn but missed out on a larger one.

If I were holding now I would be looking to sell and to switch into larger discount plays such as MCKS & TEIF.

[lord gnome] 16/12/2010 11:35

Thanks - you're not a bad chap for a blue nose ;-))

[tiltonboy] 16/12/2010 11:02

I'm sure they won't mind me posting their summary:

Oriel View: Since we initiated coverage of IRET in November of last year the share price has made no progress, whilst the NAV has moved from 48.5p to 59p. As we highlighted in our Funds Commentary last week (07.12.10), the Oriel Real Estate team sees significant headwinds for the UK commercial real estate sector going forwards and in our view, internalisation, whilst being helpful, is largely tinkering at the edges. With leverage still high (at over 100% of NAV) and with no particular focus on prime property, we continue to prefer F&C Commercial Property (FCPT; ADD).

[lord gnome] 16/12/2010 10:38

What reasons do the give for their rating? Any chance of a cut and paste or a link please, tiltonboy?

[tiltonboy] 16/12/2010 10:06

Oriel re-confirm there sell rating calling these moves "tinkering round the edges"

[lord gnome] 16/12/2010 07:44

RNS this morning looks positive. Maintains current management and cuts costs. The market should like this.

[skyship] 10/11/2010 11:52

Exactly, 46.25p bid XD - equiv. to 47.25p bid CD. Also a chunky 1m buy @ 46.25p. All pretty small stuff, but encouraging nevertheless...

[envirovision] 10/11/2010 11:29

Ex divdiv today and price is up, thats the way i like it.

[skyship] 08/11/2010 15:33

Yes - good to see that...

Perhaps an indication that the 4p per annum divi is secure.

[envirovision] 08/11/2010 14:25

Reasonable size as well:

Pursuant to Listing Rule DTR3.1, ING UK Real Estate Income Trust Limited
announces that the following beneficial holding of Ordinary shares of 1p were
acquired by Mr Roger Lewis, a Director of the Company, on 8 November 2010.

100,000 Ordinary shares at 46.876p

[flying pig] 08/11/2010 14:14

Director buying helps suggest a sensible long term hold.

[skyship] 06/11/2010 11:28

Sleepy - seems as though you are right. I also rec'd the same answer to my email to Helen Stott @ IRET .

The Merrill Lynch surrender premium is reported as being in excess of £4m versus the other operating income figure declared as £4.875m. The property is due to have been refurbished and back on the market about now; so available in quite a strong letting market. Still, I reckon there has to be a recurring shortfall there; and even with the Rugby income it does look as though the IRET dividend will be uncovered at 4p per annum. That said, they've just reaffirmed the qtly 1p divi, so the annual 4p looks safe IMO.

Pity - perhaps a BUY / STRONG HOLD rather than a committed BUY.

That said - 8.5% is still pretty attractive and there does seem to be underlying support, so I still see these higher, though will taper my enthusiasm until the income aspect is clarified with the Feb'11 Prelims...

[jonwig] 05/11/2010 19:39

This might help clear up the question of "other operating income" - posted on the RUSP thread:

jonwig - 5 Nov'10 - 18:17 - 526 of 528 edit

SKYSHIP - [...]

By the way, off topic. I've been looking at IRET and noted the point a poster made on your thread about large "other operating expenses". I'm convinced these have something to do with accounting for the acquisition of the Rugby REIT and will be recurring.
I e-mailed the company about this but they haven't replied. I'd really like this cleared up before I put any money there.

AlanJI - 5 Nov'10 - 19:20 - 527 of 528

jonwig - it is "other operating income" not expenses and I also emailed the co and got a reply:
"The £4m+ 'other operating income' refers to the surrender of the lease at Farringdon. This is mentioned on page 7 of the accounts under offices. I have copied and pasted below for your information.

Other notable transactions include the surrender of Merrill Lynch's lease of 50 Farringdon Road, London, EC1 with the tenant paying the Company a surrender premium in excess of £4 million. The building is now to be refurbished to provide Grade A office accommodation. The refurbishment is expected to be completed by the end of 2010, which we believe will be good timing in terms of attracting a tenant in an improving central London occupier market."
I am hoping to do an analysis of dividend cover shortly but it is pretty complicated. My guesstimate is that the div is 75% covered.

jonwig - 5 Nov'10 - 19:30 - 528 of 528 edit

Alan - yes, it's income, my misprint. I searched the last accounts but didn't find that. The fact that the 4p divi is uncovered is, as you say, likely.

However, will a similar rental income replace it post-refurbishment? Also, I'm not clear about how much the Rugby REIT acquisition will contribute.
It's just in a bit of a fluxious state ... but then what property companies aren't - ever?
[...]

[skyship] 03/11/2010 17:17

695k traded @ 46p under the following:

The 'C' column will contain a 'C' if there are any bargain conditions on the trade. The particular bargain condition for each trade is not reported by the Exchange.

[horndean eagle] 31/10/2010 21:51

Sleepy is right.

[sleepy] 30/10/2010 23:16

I am a substantial holder of IRET and similar investments. I unfortunately do not have the time to study these in as much depth as I would wish.

However I stand by my previous posts. Note that the last interim results include substantial "other operating income" which looks pretty one-off to me.

[skyship] 29/10/2010 17:22

Sleepy – re divi cover – you'll find everything in the comprehensive Interim Report from 26th Aug'10. Essentially the net profit was £8.985m and the distribution of 2 x 1p divis in the period cost £6.6m. Cover = 1.36x



FINANCIAL HIGHLIGHTS

> Increase in NAV to GBP203.0 million or 59 pence/share.

> EPRA diluted NAV GBP218.5 million or 63 pence per share.

> Profit for the period of GBP20.8 million driven by income profit
of GBP9.0 million and capital profit of GBP11.8 million in the period.

> Dividends totalling GBP6.6 million, or 2 pence per share, paid over
the period.

> Maintained fully covered dividend at 1.36 times.

OPERATIONAL HIGHLIGHTS


> Successful NAV accretive acquisition of Rugby Estates Investment
Trust Plc.

> Non dilutive equity issuance of 14.9 million new shares.

> Additional cashflow flexibility provided to capital structure
through issuance of zero dividend preference shares.

> Repayment of GBP15 million of securitised debt at a discount to
par value during the period.

> Selective disposals during and after the period at a 16.8% premium
to preceding valuation.

[sleepy] 29/10/2010 15:45

The movements in the NAV can be summarised as follows;


+--------------------------+------------+------------+------------+
| | Total | Per share | movement |
+--------------------------+------------+------------+------------+
| | GBPm | Pence | % |
+--------------------------+------------+------------+------------+
| NAV at 30 June 2010 | 203.0 | 59 | |
+--------------------------+------------+------------+------------+
| | | | |
+--------------------------+------------+------------+------------+
| Gains in property values | 1.3 | 0.5 | 0.5 |
| (realised and unrealised | | | |
| ) | | | |
| | | | |
+--------------------------+------------+------------+------------+
| Gains on loan note | 0.2 | - | - |
| repurchase | | | |
| | | | |
+--------------------------+------------+------------+------------+
| Movement in swap value | (0.1) | - | - |
| (realised and | | | |
| unrealised) | | | |
| | | | |
+--------------------------+------------+------------+------------+
| Net income for the | (1.0) | (0.5) | (0.5) |
| period (after | | | |
| distributions) | | | |
+--------------------------+------------+------------+------------+
| | | | |
+--------------------------+------------+------------+------------+
| NAV at 30 September 2010 | 203.4 | 59 | - |
| | | | |
+--------------------------+------------+------------+------------+

Above is extract from last RNS. Note net income line.

[skyship] 29/10/2010 15:37

Sleepy - that comment seems to fly in the face of all the published data. As LG states, this is one of the safest investments in the sector due to the yield cover, the asset cover, the low LTV and the ING Bank connection.

Is there any reasoning behind yr comment?

[lord gnome] 29/10/2010 15:00

What makes you say that, sleepy? I make this one of the safest investments there are in today's market.

[sleepy] 29/10/2010 12:51

I think we need to be careful about IRET's cover

[sleepy] 29/10/2010 12:50

I think we need to be careful about IRET's cover.