Londonmetric Property Share Discussion Threads

[petewy] 11/1/2024 09:33

preumably the absorbing of LXI will not affect dividend

[eigthwonder] 19/12/2023 20:43

Jones has a good track record on doing major deals for sound but undervalued assets at times when the sector isn’t necessarily in favour. It usually means a touch of initial puzzlement by the market (and its price weakening or marking time) and then we appreciate the logic of the move and the price tends to rise.

[grahamburn] 19/12/2023 20:25

The respective share price behaviour for LMP and LXI is probably within the usual ballpark for an outline all share merger arrangement (eg stronger vs weaker). If and when the details are hammered out and published more clarity should emerge.

[essentialinvestor] 19/12/2023 20:20

LMP share price dipped intially on the last major acquisition, from memory - I've not double checked.

[hindsight] 19/12/2023 19:38

"Understand the sentiment but I do trust Jones to not over pay for LXI"

Oh dear share price saying otherwise

[petewy] 19/12/2023 19:23

Thanks Alan (GR)

[alan@bj] 19/12/2023 17:03

No petewy, it's because they're in talks to merge with LXi REIT. The following RNS was issued yesterday morning:-

The boards of LondonMetric Property plc ("LondonMetric") and LXi REIT plc ("LXi") note the recent media speculation and confirm that they are in discussions regarding a possible all-share merger of the two companies, pursuant to which LondonMetric would acquire the entire issued and to be issued ordinary share capital of LXi (the "Possible Merger").

The making of any firm offer by LondonMetric is subject to a number of pre-conditions, waivable at LondonMetric's discretion. These pre-conditions include the completion of mutual due diligence, the provision of certain consents, waivers and approvals by each company's lenders and the recommendation of the Possible Merger to LXi's shareholders by the Board of LXi.

The boards of LondonMetric and LXi see the potential to bring together two companies with complementary strategic approaches and a key focus on delivering compounding income-led total shareholder returns through the cycle. The Possible Merger would result in:


-- A UK-focused triple net lease REIT of scale with a pro forma gross asset value of approximately GBP6.4 billion and market capitalisation of approximately GBP3.9 billion which is expected to provide improved share liquidity and better access to capital;
-- A combined portfolio aligned to structurally supported sectors (with approximately 93% exposure to the logistics, healthcare, convenience, entertainment and leisure sectors) and with income longevity and security; and
--- An internally managed REIT delivering economies of scale and operating efficiencies, targeting sustainable earnings and dividend progression.

There can be no certainty that any firm offer will be made nor as to the terms on which any firm offer might be made. A further announcement will be made in due course.

[petewy] 19/12/2023 16:37

With all the form 8.3 news presumably they are being bought out???

[williamcooper104] 18/12/2023 19:47

Understand the sentiment but I do trust Jones to not over pay for LXI Bit of a premium to share price but still at a discount to NAV is likely where it lands with improved management costs even if Alverium are still going to get paid something for a while As for scale; they really could benefit from it it will lower equity cost creating more growth opportunities

[hindsight] 18/12/2023 19:35

As a LMP shareholder I wouldn't want them to pay NAV for anything Alvarium are managing.

[pyufak] 18/12/2023 19:11

NAV vs. NAV I'd imagine is a good deal for LMP & LXI. At the end of September when both snapped for their most recent results - 30y gilt yields were 4.8%; now 4.1% and LXI has a 26y WAULT vs. LMP at 11y. In addition, LMP must be excited to to move all the LXI assets in house to avoid paying the 14m management advisor fee to Alvarium.

LXI have recently shown assets can be sold at book value and I am sure LMP will be recycling what they don't like in fairly short order if they wished. I'm increasingly excited this is a good deal for both sides, albeit LXI shareholders benefit the most in the short term as I am hoping we're taken out at NAV.

[hindsight] 18/12/2023 17:37

As they are one of the best reit managers and do not need the scale, the offer price will be a useful guide

[tradez4dayz] 18/12/2023 17:20

I didn't buy into either so left with egg on my face sadly! At least it solves my problem going forward

[nickrl] 18/12/2023 17:01

@tradez you get both now with all share merger being touted with LXI although why LMP wants all that portfolio is beyond me.

[tradez4dayz] 11/12/2023 00:41

Thanks all. I am still torn so will just add to other reit holdings. I do still think I lean towards lxi the underlying lmp yields I just can't get my head around. But especially with better divi yields around the other reits I will leave this thought for another day. Thanks for all the advice, lxi looks far better for me but alvarium and home reit terrifies me and I don't want to have to delay my retirement indefinitely if I go for lxi.

[redartbmud] 08/12/2023 20:13

Trader.

Two fundamentals for propcos:
Know your market.
Know yoor tennants.

Look back at recent activity. They have acqiured assets and stripped out the ones that they don't see as long term - for a profit.
They have also rorated out of sectors that they see as underperforming in the current climate.
Property valuations are carried out by third party professionals. You might argue that they could be pally pally, but the regular sales have blown that argument out of the water.

red

[williamcooper104] 08/12/2023 19:43

On shaky tenants a lot comes down to the property Often better with a good property/shaky tenant over a poor property/good tenant

[williamcooper104] 08/12/2023 19:27

Don't look at published cost ratios Go to P&L

[tradez4dayz] 08/12/2023 19:05

That's why i was interested, but then lxi has a 5% lower cost ratio, I am torn between them with lxi having a better divi yield currently.I liked both presentations, but my two concerns were, 1 over valuation of lmp I just can't get my head around it and the shakey tenants and then 2 alvarium!

[williamcooper104] 08/12/2023 18:36

Big big difference LMP is one of the best listed management teams LXI is managed by Alverium - enough said

[tradez4dayz] 08/12/2023 18:25

Is it just me or do their assets seem over inflated. Their NIY on long assets is far keener than say LXi and with arguably weaker tenants and lease length.Plus still holding industrial and logistics so keenly when other reits aren't?I want to buy in but these points are holding me back and I can't make sense of them?Some of their top tenants are eddie stobart - going bust and thg which is shakey to say the least and cinemas???I just don't understand what I am missing

[skyship] 26/11/2023 15:18

Read just yesterday of Job Centre staff WFH and not meeting claimants in person - so not pushing for evidence of job-seeking. Hence the tragic figure of over 5 million receiving out-of-work benefits.

[redartbmud] 26/11/2023 14:18

Sky

Couldn't agree more and Unions have a lot to answer for, alongside weak and incompeetent management.
It is what it is and the genie is out of the bottle, never to return.

Example - Land Registry. A simple registration of a propery change of ownership title taking up to 24 months at present, one at 15 months and counting - the estimated date keeps being pushed further out.
Personal experience from two family members I who have been and are directly affected!! Recommentation from a practicing solicitor is to claim that it is needed for the purposes of a sale. There is just a chance that registration might be completed!! You don't need to be telling the truth.
HMRC no longer queries submissions that would previously raised a question or two, with an expectation that there was indeed something incorrect on the submission.
Again the comment that they don't know and don't apply the rules correcctly in a worst case scenario. - from a practicing professional too.

Anyway, rant over, but political policy is moving towards further decentralisation of services from the London area into the wider UK. That will have some sort of disruptive impact, should they achieve their targets.

red

[skyship] 26/11/2023 13:27

red - "As an exmple I have a friend who works in the public sector. Home office system suppilee and goes in 3 days a week to the office."

The public sector is a cargo cult society - picking our pockets as productivity plunges. At some stage the politicians will have to grasp the mettle and insist on a return to the office, or no more job.

[redartbmud] 26/11/2023 11:15

nex

Thanks for the comment.
I too use the accumulation model to add to holdings, but haven't done so with LMP. That is a mistake that I should rectify.
They are activerly managing their portfolio to maximise values and profits. That is a good move in these markets. There are plently of small parcels to pick up where individual parts can be kept and rents increased on the next review, whilst other properties can be sold off at a small premium to book value. it makes sense.

Good point about generalisation of offices but I am still of the opinion that many organisations are still looking at the cost/value of overheads where occupancy is way below pre-covid norms.
As an exmple I have a friend who works in the public sector. Home office system suppilee and goes in 3 days a week to the office. NO suggestion that will ever revert to 5 days per week again!! He values the colleague interaction, but doesn't see a downside to current arrangements.
They could easily downsize the building now with sensible planning. Or alternatively thake on additional staff without significant additional cost.

Another case study was recently chatting to a PA in a FTSE 250 company (at her own discretion otherwise free to choose. She attends twice a week now. Set days so she can do face to face with colleagues who want or need that can come to her. Otherwise using technology at home that allows her to work equally as well. That situation is again not going to change. The company has settled down to function that way for the future.
When I did a tour, the vast office was almost umanned. Dozens of desks unattended, and she said that was a normal day. That space could easily be repurposed for R&D or production use, as it is a high tech. operation and ideal for the purpose. No more room on that site for expansion, so ideal in that instance.

Back to the London office crane scenrio, - They always over-build at the wrong time, then have capacity that isn't filled for a relatively long period. That is dead money and rents and values are subdued as a consequence.
London is not a barometer for the rest of the country, it is it's own bubble and has seen several property crashes in my lifetime.

red