Life Science Reit Share Discussion Threads

[hindsight] 15/5/2024 17:55

Cracked and started building a holding today

[spectoacc] 15/5/2024 13:35

"NAV", that's the problem. What would they get if they sold them now? Labs, great. If offices, much less so.

The divi underpinned them for a while - don't blame them for cutting it, but you'd be hard-pressed to pick LABS over many of the others, also on discounts but paying you to wait.

Remain a holder but want to see the selling stop before adding more.

[hugepants] 15/5/2024 13:33

Yes agreed. Other adjectives you could use include abject, rank, dire and mince.

After selling at a big loss in the 40s Im contemplating buying back in here. The yield is poor, certainly for a REIT, but the discount to NAV is massive; greater than 50%.

[chrisdgb] 15/5/2024 09:37

I hope so it has been simply awful........

[gbcol] 15/5/2024 09:23

SP has been a disaster but at least I’ve reinvested all my dividends back and added a few here and there in the belief that value will out in the medium to long term. I’m sitting on a significant capital loss but you’d think that there is considerable upside for anyone getting in at these levels.

[ghhghh] 15/5/2024 06:53

I'm still buying, bought more yesterday and Monday. Sector valuations are all over the place with the likes of LABs, RESI and NRR trading at near record lows. Seems to hinge on whether there's a large seller (perhaps open ended fund) and very low market liquidity. There was a seller of c. 450,000 at 38.33p yesterday pm.

I'm happy to sell the risers and buy more of the laggards.

LABS has good quality, well located assets and experienced management. The risk is the speculative build out at Oxford but supply demand metrics appear good and the economy is improving.

What else doesn't the seller like?

Tenants tend to be start ups so risky.

Dividend halved but should increase significantly as Oxford fills up.

[leoneobull] 14/5/2024 19:54

Year's low close and sbdy sold 1m today early doors..where is the bottom? Saw this recommended by gggggggghhh so started researching

[chrisdgb] 07/5/2024 14:37

Nice to see management share purchase......

[cousinit] 08/4/2024 10:42

It's alive! It's alive!!

[spectoacc] 08/4/2024 10:22

Good to see a twitch.

[roulettewheel] 06/4/2024 20:19

Not sure but iShares UK Property UCITS ETF is down 49% over same period so food for thought

[toffeeman] 06/4/2024 18:53

Does he explain the 60% decline since flotation?

[roulettewheel] 05/4/2024 19:59

Interview with Simon Farnsworth from Life Science REIT

On Youtube www.youtube.com/watch?v=fnslItk8zPU

[williamcooper104] 28/3/2024 12:00

They'd be able to let it if the tenant breaks/exits at same rent £45 for a fitted lab is pretty cheap

[cousinit] 28/3/2024 11:34

Would be interesting to know what the break/dilaps clause is like. It clearly isn't an income strategy if you may be spending as much on fit out as the minimum contracted rent!

This seems indicative of occupiers wanting (and being able to demand!) flexibility. I guess this can act as a 'shop window' to other potential occupiers.

Very few assets now on 25 year, upward only leases outside of alternatives (if that includes logistics)

[williamcooper104] 28/3/2024 11:05

Sitting a shed out to CL2 labs also likely to be more expensive than fitting out an office to same standard Even so doubt it's more than £225psf Would of course be good to not have to guess

[williamcooper104] 28/3/2024 11:04

Yep - another way of looking at it is that it should be a c300-400bps spread over incremental cost of debt

[robards] 28/3/2024 10:55

So on your figures, the rent increase covers capex over 8 or 9 years, which is ... ok?

[williamcooper104] 27/3/2024 12:50

Of course you can rent for a much higher number if you fit out a unit with labs Question is how much capex Lab fit out, for standard wet/CL2 is c£180-200 psf

[williamcooper104] 27/3/2024 12:49

Simon Farnsworth, managing director of Ironstone Asset Management, the investment adviser to Life Science REIT, told Property Week the firm was about to sign a deal at OTP that would represent a doubling of its previous top rent at the park."We are hopeful of signing up to a deal this morning on a fitted lab basis to an occupier at the tech park at £45/sq ft, which would be a new top line for the park," he said. "Previously, that space in an unfitted condition would have been £22.50 – so effectively we are doubling the rent off the back of some capex."https://www.propertyweek.com/finance/life-science-reit-cuts-dividend-as-it-nears-record-rent-deal-for-otp/5129345.article

[williamcooper104] 27/3/2024 10:02

Right now having a converted inferior lab doesn't matter as the tenants haven't got a choice It could matter when there's a lot more purpose built labs in London - but that's some time away Tenants are all a little OCD about their labs

[williamcooper104] 27/3/2024 10:00

On 1 - LABS are right; there is currently still significant unmet demand - plus developing in Oxford and Cambridge is very difficult - no electricity in Oxford (labs use a lot) and no water in Cambridge. Within next 5-7 years there's a lot more supply coming into London - but that's not a problem now - and if I was buying into LABS now it would be on the basis of a wind up2 - market has more of a point here - it's not that you can't convert to labs but that those labs will always be inferior to purpose built, plus in urban areas you might have to internally store your plant losing a lot of lettable floor area - but that's more of a longer term problem- and as said these are not RGLO offices

[ghhghh] 27/3/2024 09:25

My take is that LABS is selling off because

1. Market doesn't believe that there is enough mid term demand for Lab space but LABS claim that interest/demand (stacked up by concerns re economy)is significantly greater than current supply and this imbalance is increasing thanks to reduced new build)

2. Market is valuing LABS on the basis of it's high % of offices, tarnishing it with the same obsolete/stranded assets discounts as RGL/CLS etc. But as far as I'm aware, all LABS offices have been acquired on the basis that they will be converted. Hence no concerns here (other than future funding) and the greater the write downs, the greater the valuation uplift on refurb, build cost inflation aside.

LAB's portfolio is already 100% A-C ESG when you exclude the one listed building.

And as far as I'm aware, they have no other significant funding commitments other than Oxford which is covered in Results? I'll double check with them.

I should get the Jefferies Note within a couple of days, this should add to the bear case!

[wshak] 27/3/2024 08:31

Are the directors particularly wealthy, enabling them to buy shares?

Four of them share £180,000, with Claire Boyle being the highest earner at £55K.

It is Ironstone Asset Management who are raking in £3.4m a year in fees.

[ghhghh] 27/3/2024 07:00

Management not buying is a red flag - if there’s a problem I think it’s more liquidity than values

Agreed but shares were over 60p (and fully valued) at YE, directors have been inside during current carnage. Plus I suspect they were intending to cut the dividend pre YE barring a miracle.

I'd hope we see some buying now but you never know when they are free to buy.

Jefferies have cut from Buy to Hold and slashed PT from 90p to 45p.

And the large seller evident over the last month still lurking at 43p.