Life Science Reit Share Discussion Threads

[jonwig] 06/10/2022 13:16

Sphere - I'll respond later, but yesterday Investec raised their stake from 13.0% to 14.1%

[sphere25] 06/10/2022 12:38

95p to 90p to 73p now - is this overdone?

Nibbled a few trying to catch a slow bounce as it looks like someone is trying to clear sellers by buying in size at 72p:

2x1.5m @ 72p
1.57m @ 72p

These are boring slow ones though. Might fall asleep here or sell out of boredom if it doesn't push on. Stick a stop under 71p.

Even if it bounces...80p?

The worrying thing is looking at the sharp moves in these usually safer plays like here and HICL. There is big knock on effect that happens when there are dislocations. The problem is it doesn't take much adverse movement in rates or asset prices to cause some big issue, which makes you wonder just how fragile the system is and how levered up folk are out there.

Clearly rates can't rise too much or the whopping big debt and leverage out there comes into play. Folk mention debt to GDP but just look at recent events to see that it's all about debt and leverage. How many times are these central banks going to have to step in and bail folk out?

All that ever happens is debt goes up and the central plankers try and reverse QE but then end up doing more. I wonder if Powell and co will actually hold course this time. If there is a hard landing (happens pretty much all the time), is it back to pumping again?

This is all going to end badly. These recent dislocations are just a small sign of what could come. The big debt binge and free money is going to cause catastrophe!

Let's hope they stick to the course, we take our pain early and don't end up continuing to grow this debt bubble.

All imo
DYOR

[toffeeman] 27/9/2022 18:07

Yield 5% inflation 10% says it all

[saltwood] 27/9/2022 17:56

I’d be fascinated to know what people think now. Clearly (as with so many REITs and other companies) this looks terrific value. The sector is hot, the acquisitions seem wise, the debt has been largely secured… the yield is now c5%. A solid long term bet? I hold about £2,500 and thinking of making it a larger core position for the long term. Anything I’m missing? Timescale = 8-10 years.

[gbcol] 22/9/2022 08:08

Good to see NAV has increased. The large discount to NAV doesn’t make sense to me, which is why I have been adding recently. Dividend target of 4% is not great but OK, and should be plenty of potential for share price growth. Got into this for long term income so I’ll probably continue adding at these levels.

[jonwig] 22/9/2022 06:54

Results (link in header) look pretty OK, they seem to be doing theright things. Obviously a credibility gap, with the shares at a 12% discount to net assets.

[saltwood] 17/9/2022 05:46

Results coming on Thursday. We should also get our first dividend declaration for period from IPO to June 2022.

[chrisdgb] 12/9/2022 09:21

Wonder if we get a NAV and Portfolio Valuation update soon...?

[toffeeman] 11/8/2022 15:22

Bit of volume today but no price change so presume it's shuffling holding

[riverman77] 02/8/2022 15:54

Less positively was some recent news at AEWU regarding a sale of one of its life science properties. The property was originally sold for £37m in April but the buyer pulled out and a new buyer came in at £29m. Asked about this at a recent Q&A, the fund manager noted that this was a sector that had become a bit overextended and was not entirely surprised to see them pull out. No idea if this has any significance to LABS but an interesting development.

[jonwig] 02/8/2022 07:25

Haven't seen the JPM comment, but there as an interesting article in the FT yesterday about shortage of lab space in the 'golden triangle' of london, Oxford and Cambridge.
The need is conversion rather than new build (owing to planning laws).

LABS is doing its bit, but hasn't the scale to make much difference; and with the shares trading at a NAV discount, they can't raise new equity.

[chrisdgb] 02/8/2022 07:13

Led to believe some positive comment from JP Morgan on the sector yesterday, looks better bid today, may spark some interest....

[riverman77] 18/7/2022 09:31

I'd say the weakness is largely due to the wider market sell-off rather than anything company specific. Nearly all REITs are down and LABS is actually holding up better than many. Of course rising interest rates are a headwind for the asset class. I'd also heard some suggestions that LABS may have overpaid for assets at the top of the market, and yields they achieved were fairly low. Don't know enough about this sub sector to say whether that's the case.

[jonwig] 18/7/2022 06:24

Saltwood - interesting points.

a) I think you'll get an updatednav twice a year; that's pretty usual. It's quite a lengthy and expensive exercise.

b) Yes, they're doing more development work that is usual for a mere "rent collector". I guess it's part of their model: not enough purpose-built stuff to acquire.

c) Do you mean Chapel Road? The thing is that Ironstone have a low profile and probably not much in-house experience. Hope it doesn't recur, as you say.

I'd add that the running discount to latest nav of 100.2p is probably down to b). This is riskier than the usual sort of REIT, but the potential rewards are pretty good if they execute well.

[saltwood] 17/7/2022 17:07

I bought shortly after the IPO and intend to be a long-term investor. Three ideas I have for the recent weakness are:
a) We do not have an updated NAV post December 2021. I would expect an uplift but we simply do not know. Ditto on the dividend.
b) The strategy seems to depend to a large extent on asset management - ie redevelopment, repurposing existing buildings and, in the case of the Oxford Business Park, construction and development. I imagine inflation of 9%+ will be unkind in these circumstances so costs may be increasing beyond that anticipated.
c) Some governance concerns were flagged at the time of the results - I believe this to be a one off issue but clearly concerns about corporate governance destroy value.
There are other questions too - for example, the company is fully invested yet has a pipeline of acquisition targets. What is the growth strategy from here?
I hope these ideas help. As I say I am very positive on the long term outlook and pleased to hold - indeed, will probably top up at these levels.

[bathcoup] 13/7/2022 16:09

jonwig - Thanks.

Have a few shares from IPO. Not feeling clever right now - that's why I'm searching for any specific reasons for the decline.

[jonwig] 12/7/2022 17:40

Intention is to convert after 2026:

[bathcoup] 12/7/2022 15:42

"The entire building [7-11 Herbrand Street] is currently let to Thought Machine, one of the UK’s leading fintech companies, until October 2026 at an all-inclusive rent of c. £7.4 million per annum."

Thought Machine is hardly "life science"!

[toffeeman] 07/7/2022 08:03

I bought at the ipo and sold when it retreated to £1.

Looking to buy back, but still worried about the recession and whether potential tenants will stay put for now rather than move into LIFE properties.

[gbcol] 07/7/2022 07:25

I think so too chrisdgb and have been adding recently. Last reported NAV 100.2p, divi to be announced for period ended Jun 22. Sooner or later this will get back above £1.

[chrisdgb] 07/7/2022 07:13

Looking way oversold at these levels, one of the cheapest z scores in the trust sector........

[jonwig] 23/5/2022 07:07

Results to 31/12:



Useful NAV uplift to 100.2p, but rental income not yet enough to cover admin expenses. I guess 31/12 date is the explainer. They don't explain "other admin expenses" which might reduce now they're fully invested.

Plenty of useful detail about their investments, including occupancies (81% overall).

[riverman77] 16/5/2022 15:28

Yes feels a bit premature for a fund raise already. I'd guess at least another year or two away, and only once they've got a decent premium.

[jonwig] 16/5/2022 12:42

There will be a NAV statement on 23/05 with their results. They need to get a decent premium in the share price before they can ask for more.

But they have bought a substantial amount of development assets, which won't get a nav uplift until they are completed and let. No rush to fundraise, I think.

[toffeeman] 16/5/2022 12:21

Happy with that - they will presumably be back soon for a further raise.