Invista Share Discussion Threads

[skyship] 30/6/2011 15:13

It was indeed. But perhaps JR is recognising that any lengthier stand-off benefits no-one. So we may well yet see some value from that JV.

JRR - Would be thrilled to see IFD go the self-liquidation route. With an EPRA NAV of c57p, we would be unlikely to see lesser than 52p, which for an average liquidation period of, say, 2.5yrs would give us a 33.3% capital return at a GRY of 12.2%pa......+ some lovely dividends in the meantime of course.

Hybrasil - I don't think we can read across anything from IERE other than lower management fees at some stage. Hope you get a line in IFD @ 38p; though I'm amazed they have remained at this level for quite as long as they have done. IERE also looks pretty attractive to me; and I've bought a few this morning.

[jimbo3352] 30/6/2011 12:42

oops - apparently it was Jamie Ritblat's Delancey that blocked the vote.

[jrr774] 30/6/2011 10:16

I guess the lower mgmt fee reflects the incentivised nature of Internos's brief as they receive 12.5% of any excess capital above the current NAV that is returned to shareholders. Skyship - would you be happy for IFD to go this route? Three years is a long time to wait for capital return and I'd assume once flagged any offers for IERE's properties will be on the low side, no?

[hybrasil] 30/6/2011 10:04

Morning skyship.
Went on the bid at 38p for these this am got about 100 shares! so far.
What do you think the IERE news means for the future of IFD?

[skyship] 30/6/2011 09:26

Good news that IERE's new manager has been appointed at a saving of 47%pa from that applied by INRE. OK, they've also got a cash incentive deal as well; but it does suggest that IFD's new manager contract will be far more competitive than the old INRE contract.

Part of today's RNS from IERE:
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Under the heads of terms, the Company has agreed, subject to final contract, to pay Internos a management fee of 1.25% per annum on the net asset value attributable to the Company's ordinary shareholders, subject to a minimum of EUR1.0 million per annum. Assuming an unchanged level of NAV, this would be approximately EUR1.6 million per annum lower than the management fee payable under the existing IMA with IREIM, representing a reduction of 47%

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[horndean eagle] 30/6/2011 08:54

Get a feeling that IFD could now well topple over and join that list. Duncan Owen was looking to get a piece of the management contract that covered IERE and IFD alongside Schroders. Now IERE has gone the IFD board might take the view to wind up operations ahead of debt repayment schedules over the next 3 or 4 years. It would be silly if they put in a new manager with a different mandate and therefore limit their options.

[skyship] 30/6/2011 07:45

One of the Invista managed companies - IERE - facing up to reality. Going for liquidation; in this case over 3 years. So now IERE, MERE & TEIF have all faced the reality and all provide good upside.

[skyship] 29/6/2011 18:03

500k @ 38p this afternoon.....looks like a BUY to me.

[skyship] 29/6/2011 08:14

JRR - thnx

[jrr774] 28/6/2011 19:26

The regions will be busier. Big cities are experiencing more office activity, albeit at low rents and with longer rent-free periods.

The above is comment no.3 of the Property Week article Hieronymous mentions.

[skyship] 28/6/2011 18:33

The Recticel Manufacturing mentioned in JRR's No.176 above is a blue chip tenant. They are the UK division of a E1.3bn Belgian company operating in 21 countries - listed on the Euronext Belgian Small Caps.

[skyship] 28/6/2011 18:26

Hieronymous - do you mind providing us with a precis of No3. Seems as though non-subscribers may not be able to access.

[hieronymous1] 28/6/2011 18:17

Property Week predictions for 2011 (on 07 January. See number 3.

[skyship] 28/6/2011 17:51

"I would say the management fees are not overly generous compared to others."

However important to bear in mind that the management contract is up for grabs. Obviously Duncan Owen and his deserter team from INRE have to be the favourites, but it is a given that the annual fee will be markedly less than hitherto. Another plus point for the income equation...

[alanji] 28/6/2011 17:33

Hi JRR
Firstly, IFD is not a REIT, which have special treatment for UK tax.
"The Invista Foundation Property Trust, launched in July 2004, is a closed-ended property investment company domiciled in Guernsey and listed on both The Channel Islands and London Stock Exchange."
Commercial tenants have huge leverage at present so rent free periods and discounted rent are the norm rather than the excep0tion. I do not have enough knowledge to say whether IFD has done better or worse than its peers - maybe it has negotiated harder as its voids are above average?
I would say the management fees are not overly generous compared to others.

[jrr774] 28/6/2011 16:56

Skyship/AlanJI - many thanks for your replies, I will post a note on iii to look at this thread. Just to come back on the rental income points AlanJI mentions, is this usual for a commercial REIT to offer such discounts/incentives to tenants? For example on pages 11/12 of the interim accounts a property rented by Recticel was increased from a 7 to 20yr lease but for minimal uplift and with 41 months at half rent (a discount of 1.2M). I guess this is a rolling process as leases are renegotiated but it suggests the tenant has some bargaining strength with IFD.

Also re mgmt fees as alluded to by scburbs these are tiered at 2% per annum of NAV - is this high or comparable to other commercial property REITS?

Thanks

[skyship] 28/6/2011 08:12

Decided to add yesterday when they were briefly on offer @ 37.5p

[scburbs] 27/6/2011 18:14

Thanks AlanJI, Yes, the company certainly looks to be in good shape, just hoping for some assistance in kicking the tyres from those who have been here for a while! I am not holding at the moment.

[alanji] 27/6/2011 17:01

scburbs
I agree the 2013 cover is a target and said so in my post. July slide 27 showed how they hope to achieve it and it looks to me as though they are going along fairly well. BBC site is important but if approved for residential use will presumably be sold for a chunky profit.
I have no doubt you have analysed the April ims, which looked very encouraging imo:
- As at 31 March 2011, the Company's direct property portfolio comprised 57 properties independently valued at GBP331.42 million. At the same date the Company's direct property portfolio produced a rent of GBP22.87 million per annum which, based on the independent valuation, reflected a net initial yield of 6.52%. There are rent free periods expiring over 2011 totalling GBP0.6 million, together with additional unexpired rent frees and guaranteed uplifts totalling GBP1.93 million by May 2014. The reversionary yield of the portfolio based on the independent valuation is 7.8%. This analysis excludes the committed office development in West Bromwich which is expected to be completed by October 2011, and is described in further detail below;
- Currently subject to rent free that expires April 2012 (£1.092m);
- The Buckinghamshire New University is currently benefiting from a half rent period equating to GBP450,000 per annum from March 2009 which will increase to GBP900,000 per annum in June 2012. The lease benefits from a further fixed uplift to GBP1.02 million per annum in May 2014;
- Currently subject to a half rent free of GBP365,519 per annum increasing to GBP731,038 per annum in January 2014;
- There has been encouraging progress made over the period with prospective new lettings under offer which could add GBP0.5 million of new income. Separately, notable contracted new lettings over the quarter include two units at the Gate Centre, Brentford totaling GBP0.12 million per annum and the letting of a long-standing void in Fleet at GBP0.06 million per annum."

There will also be a reduction in finance costs and management fees (presumably!). Finals should contain a bit more detail.

[skyship] 27/6/2011 16:36

jimbo - indeed, at least 3years, possibly 5....

[jimbo3352] 27/6/2011 16:28

Re BBC archives moving out of Reynards Park in April 11: Talk of porous roofs/exploding internal drain covers suggests it may be difficult to relet. At least the BBC did cough up £1m for dilapidations. Let's hope it gets redeveloped. The date of the blog (August 2010) does suggest IFD has been aware of the likelihood of a lease break for some time

[scburbs] 27/6/2011 13:32

AlanJI,

Thanks, very useful slide. The slide is from July 2010 and looks more like an aspirational target (as it includes future uncontracted acquisitions and management initiatives) rather than a forecast based on what they already own or have contracted to buy. Given it is a year old should it still be considered accurate? Does it adjust for BBC void? Slide 22 also seems to temper some of the optimism that might be created by slide 20.

There is no equivalent slide in the December presentation, other than the info I quote above. Have you seen anything more recent than July 2010 continuing to support that level of cover in 2013?

[skyship] 27/6/2011 12:56

Thnx Alan - as ever.

JRR - could you make sure that those parties on iii who apparently don't conduct in-depth research are appraised of all the responses here - esp. those of Alan above. He is a serious analyst who understands Balance sheets and the Notes to accounts - just one of the benefits of these ADVFN bulletin boards!

[alanji] 27/6/2011 12:50

Skyship and jimbo make very valid points and beat me to a reply.
The December presentation to analysts includes a very useful rental chart on page 27.
The July presentation contains rental projections on page 20, showing a target 95.7% cover for the year to 31 March 2013.

In addition to the Plantation place asset value there is the Merchant Property jv. There is an additional £1.7m value at March 2011 in respect of the interest swap liability which will unwind over the next two years.
Following the INRE return of capital, today, this is now my largest holding.
Looking forward to the results on 11 July.