Life Science Reit Share Discussion Threads

[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.

[cousinit] 14/3/2024 16:22

It happens occasionally...

It's taking time to recalibrate to the current environment where a seller who needs liquidity can do untold damage to the price (on what can be fairly limited volumes).

When trusts that seem to be perfectly fine are tossed around like flotsam and jetsam, others with a few hairs seem able to plumb deeper troughs.

The repurposing at LABS seems to be taking some time. Everything (generally) seems to take longer than management teams indicate, but in the past 5 years or so (particularly in the UK) timelines seem very sluggish/extended.

I know Specto has been quite sceptical on rate cuts. It did look at times over the last 3 months or so that they could be delayed for a while but the disinflation trends seem to be stronger in the UK and Europe such that that they may move first without waiting for the Fed. 2-3 cuts would hopefully be a useful tailwind to trusts with chunky yields and some floating rate debt.

[spectoacc] 14/3/2024 15:35

Hate to agree, but even if you take LABS to be offices not labs, it still looks not bad down here to me.

Persistent seller, so might go lower yet, but value is value.

Good luck holders.

[ghhghh] 14/3/2024 15:06

CousinIT

You have called this a lot better than me! I'm still buying and now one of my largest holdings.

43p discounts a lot of bad news. You have obviously seen the Presentation re the Interims re supply/demand?

My reason for buying REITs is mid term capital growth and I think LABs will do well - eventually!

[cousinit] 14/3/2024 12:10

Despite my reservations, I've taken a starter position here at 42p.

When I was kicking the tyres it was bobbing around 50p.

There's a fair amount in the price now and this leg down has been on no news. 10 days until the results, which may not be pretty.

[spectoacc] 23/2/2024 16:22

In here, albeit not calling the bottom on a chart like that.

I don't think a fall in NAV would bother me - LTV c.20%, and that's the relevance for NAVs atm (as witnessed by the many REIT deals at well below, API the latest).

But interesting comments re divi. My guess is they'll sustain it regardless, in the belief they'll have it covered again before too long.

[cousinit] 16/2/2024 12:47

ghhghh - fair play - I've always considered that you have an appetite for greater risk/reward!

In 5 years' time when some of the asset management initiatives may be starting to bear fruit, if the RSY space remains in demand along with lower interest rates this could look very appealing.

I do wonder how it might fare in the meantime if the NAV dips down into the 70s and the divi is cut. One aspect is whether the valuer can look through assets with limited income and assess them as lab developments or as is vacant offices.

[ghhghh] 16/2/2024 08:11

I've been buying in anticipation of superior growth potential from their more specialist strategy. Risks are how long it takes them to persuade the market that it's not offices and what does future demand look like for such a niche REIT.

Limited new build and rising replacement costs must bode well for future capital appreciation? Dividend cover a bit of a red herring at this price.

[cousinit] 15/2/2024 15:51

I think my current assessment is that they have one too many material assets. The WAULT is short outside of Oxford and the interest rate caps run out in barely more than a year. Debt could then be costing c7% partly backed by assets in London which currently have more like 5% yields and could potentially have chunky vacancies in a year or so from there.

If they can get a London asset away within 20% of the last valuation then it may make sense, but a completion of Oxford would then dominate. They could either split that or at least carve out the hotel.

A lot of things would need to land jam side up to avoid a (chunky) divi cut while base rates are running north of 4%.