Life Science Reit Share Discussion Threads

[williamcooper104] 26/3/2024 23:08

Wouldn't worry too much about CW Scientists even less keen to go there than investment bankers once were Kings Cross/Oxford/Cambridge will do fine Tenants aren't that rent sensitive - it's not like they will go to CW because it's cheaper And it's not that CW can be cheaper as much of the rent comes from capitalised fit out costs

[giltedge1] 26/3/2024 22:17

Massive loss of capital from IPO, worry here is competition from recent Govt incentives to Canary Wharf empty offices to convert to Labs. Best avoided better value elsewhere SREI, SHED.

[williamcooper104] 26/3/2024 22:03

The valuations look reasonable and there's plenty of liquidity still for the sort of properties they have What I'm not sure about is the balance sheet commitments OTP was IIRC an acquisition of some built assets and forward funding commitments to buy future assets when built Don't know what funding liability (if indeed any left) there is Would want to understand that first before buying Management not buying is a red flag - if there's a problem I think it's more liquidity than values

[riskvsreward] 26/3/2024 20:39

Price more than halved in two years and you still don't see a single director buying. That tells you all as if it is really a bargain no one would know it better than the insiders and I don't see they will not have some of it if it is really a bargain.

[williamcooper104] 26/3/2024 20:21

Problem is that it's likely the vacant space requires capex and the development pipeline definitely does - plus at least some of that pipeline is forward funded investment acquisitions so lower return than pure development Given new debt is going to cost close to 7 can't see a lot of point However a wind down/sale of assets would work

[ghhghh] 26/3/2024 17:50

It is not viable as a stand-alone REIT

But letting the vacant assets lifts income to circa £20m and rolling out the development pipeline adds another £6m.

LABS claim the limited new build supply should strongly support rental growth when interest rates fall/economy recovers.

A 47% discount to NAV looks excessive, presumably this is because a high % of the portfolio is old offices but these will be subject to the ongoing refurbishment to labs programme.

[williamcooper104] 26/3/2024 16:07

Yep; hard to see it getting to the scale now But the assets aren't bad; even if you characterise some of them as more office than labs; they still are in good locations An office in Oxford trades at a very different price to one in Leeds

[jombaston] 26/3/2024 15:52

This shows the perils of investing in a REIT before it is properly established. Any dividends are obviously paid out of capital to start with. In this case the timing was unfortunate but that was always a risk. It is not viable as a stand-alone REIT although it could be attractive to a buyer.

[wshak] 26/3/2024 15:51

I've been buying here recently at current levels.

Divi yield not particularly exciting after an expected cut but it clearly has good assets, with low debt.

Nice, safe asset play to lock away for a couple of years, then take another look?

Looks vulnerable to a bid in the meantime.

[williamcooper104] 26/3/2024 15:34

Not unlike DGI9 (ok not as badly run) in that it's been sold as an income investment but its asset are capex hungry/growth Once you can't fund that from raising equity or incremental debt you can only use internal cashflow; which of course doesn't work for an income/divi stock

[cousinit] 26/3/2024 10:08

I guess the results were a bit better than I'd figured, but that was probably more down to how far the valuer's red pen went in terms of 'office' haircuts.

Nothing lurking in there that was particularly negative or positive regarding the portfolio. The sluggish approach outside of OTP in terms of repurposing/new lettings will probably keep a cloud over the strategy until something meaningfully accretive is delivered.

The biotech 'winter' over the past 18 months won't have helped and interest rates rising/economic slowdown gives tenants plenty of reasons to pause on long-term commitments.

[chrisdgb] 26/3/2024 09:03

Yes need more lettings news.......

[spectoacc] 26/3/2024 09:02

Gone very quiet on here. The divi cut look wise, and the market seems to have mostly priced it, but even 2p isn't quite covered by earnings.

LABS still has something to prove.

[spectoacc] 26/3/2024 07:12

Divi cut to 2p pa. Otherwise seems to read well.

[wskill] 22/3/2024 13:14

With a loan to value ratio of 20% there is not a lot to worry about here I am thinking added a few more today with this in mind.
Without this seller I am sure the share price would not be so low.

[chrisdgb] 22/3/2024 10:37

Never have a set of results been more important for a stock..........

[ghhghh] 20/3/2024 14:58

Thanks Specto, I think!

My broker says there is still a large seller stuck at 43p

[spectoacc] 20/3/2024 12:34

@Invisage - can't say I see eye to eye with @ghhghh too often, but I think you may have confused him with a certain other poster, for whom buy/post everywhere/ramp/sell again is the modus operandi.

That doesn't apply to @ghhghh, irrespective of trading in & out of positions.

Back on topic - some very large trades on LABS of 800kx2 or x4 today, might signal a bottom (tho looks a cash & new).

[ghhghh] 20/3/2024 11:45

Invisage

Are you nuts?

Check my posting history! I currently hold over 15 investment trusts, have only sold out of GABI (wind down) and API (takeover)

Still holding all my DGI9!

4m traded or crossed today?

[ghhghh] 20/3/2024 07:42

The H1 Presentation projects income rising to c. £25m from memory albeit conditional

[cousinit] 19/3/2024 13:21

RvsR - see my post 141 earlier in the thread.

I have bought a small position here but suspect there's bad news coming and likely a divi cut for the reasons you've already picked up on

[riskvsreward] 19/3/2024 13:03

Can someone explain how the business model works for this trust? On its webpage it says portfolio valuation about £410 m and rent less than £15 m with 90% occupancy. That works out gross rent less than 4 %. How can that cover the interest rate let alone the operational cost and anything left for shareholders?

[spectoacc] 14/3/2024 16:24

You'll get your 2-3 cuts - just not this year ;)

LABS is still cheap without them IMO, but agree it's all taking too long. LABS's other advantage is the low LTV.