Newriver Reit Share Discussion Threads

[essentialinvestor] 18/3/2020 18:29

PI, don't know the company well, a friend of mine mentioned it
recently, but did not look at the company in detail

[propinv] 18/3/2020 17:00

Hi Specto. Most HBs don't have on balance sheet debt anymore 0 - 5% max

[propinv] 18/3/2020 17:00

Essential. Thanks. Wasn't on my radar. Decent balance sheet. Debt long term. What triggered collapse today?

[spectoacc] 18/3/2020 16:50

@PropInv - then I fear we're in for a housing boom.

Suspect the windfalls will be used to cover debt built up by the crisis, and loss of employment tho. Also doesn't account for the rare effect of so many houses coming on simultaneously.

[propinv] 18/3/2020 16:47

Specto. Thanks. What people are missing with the people die, housing stock vacant argument is this - when a house is vacant due to death, it's because the last member of that generation has died. They pass money on to next generation - on average 2.4 people. They don't keep that house. They spilt the money and those people use it as a deposit to buy. It's a well known multiplier effect. It's actually positive for housing, not negative.

[propinv] 18/3/2020 16:44

Essential. People on zero hours contracts don't get mortgages. Brexit backdrop and loss of workers will more than make up. My thoughts anyway.

[essentialinvestor] 18/3/2020 16:37

Just noticed INN.

[spectoacc] 18/3/2020 16:33

How many businesses survive this, how many jobs are lost? Interest rates can't go much lower than they have been, Help to Buy already pumped prices, thousands of, ahem, vacant houses coming on the market if this death rate continues to climb. Housing market won't do relatively as well in an unemployment crisis.

Most of the renewables, particularly the wind & solar, also GRIO (hate it!) and AIRE (former AEWL) as an outside bet on inflation/tenants not going bust.

[essentialinvestor] 18/3/2020 16:33

Issue with the house builders is employment, employment has been exceptionally
strong, will that continue?. Margins also a key for that sector.

[propinv] 18/3/2020 16:25

I like housing, people will want to buy after this. Mortgage rates will be low. Inflation will rise. Will pay increase? Not so sure initially. Like Redrow, Bellway, TW.Any names in IT space?

[spectoacc] 18/3/2020 16:11

Agree on inflation. Are housebuilders the way to play it tho? Large wage bills & building costs.

There's some very interesting, very cheap, inflation-protected IT investments - if you trust the underlying.

[propinv] 18/3/2020 16:07

Hi Hpcg what stocks you looking at for rebound and thought process please? Personally eyeing house builders. Inflation is coming. Proper inflation.

[essentialinvestor] 18/3/2020 11:39

There are two teams in this sector that I would usually trust with my house.

The first is the team behind Hansteen Plc, who once again managed to call
the very top of the market, quite incredible.

The other is Helical Barr.

Mentioned here previously the Helical started selling out of shopping centres around 3 years ago, their last sale completed approx. 18 months ago. And perhaps more interestingly
they sold their industrial warehouses over a year ago.

Mucklow was also managed exceptionally well, but like Hansteen was bought out.

[spectoacc] 18/3/2020 11:27

No, what justifies an economic depression is at least 3 months (or up to 18 months if you read the hilarious Imperial report from last night) of near total shut-down of the economy. No factories (yes yes - but are the factories abroad open? Will they supply us, or their home markets?), no transport, leisure, travel, tourism, schools, courts. Limited demand for the things that can be done working from home. It's the reason to applaud the UK approach of lock-down-but-not-really, and deplore what they're doing on the continent (except Italy, where they totally lost control of it, and soon also USA, which is heading the same way).

Agree - who'd buy NRR in this uncertainty? There's many cheaper REITs atm. I'm buying a few of them in fact.

[hpcg] 18/3/2020 11:22

Spectoacc - because the death rate doesn't justify an economic depression, which will also kill people. Not only that, but the people most likely to die have the shortest life expectancy. If it were teenagers then that's another matter. The longer the lock down goes on the more people will risk the consequences and hope its not them. People keep saying we are at war. If we were at war we would accpet the casualties.

Anyway, investment case here does not look great even at these prices. However that view is extremely dependent on how long this lasts. That said, their are better places to deploy money on a rebound.

[fenners66] 18/3/2020 00:57

Unlucky - but buying pubs does not look so clever now.

Carphone wharehouse to shut - how many shops ?

[spectoacc] 17/3/2020 07:02

At least until the hoped-for vaccine - yes. Apparently poor Chinese can "last 3 months" without income - they've had 2 months so far.

[fenners66] 16/3/2020 22:16

As for China getting on top of it , lets say they eradicate it with their lockdown policy.
What then ?

Relax - reopen the border , let it back in , rinse and repeat ?

We are supposed to believe that a case or small number of cases has spread around the world - so how can they possibly reopen and not have it come back by thousands of routes ?

Clearly our govt has it right - we have to be able to reopen for business - so we are all going to have to catch it in a measured way.

[propinv] 16/3/2020 17:13

Boris - avoid pubs. When that doesn't work, they will shut them down. Watch Ireland for case study. Took them 3 days between asking people and forcing people

[spectoacc] 16/3/2020 15:53

@hpcg - disaster isn't a given, I agree, but intrigued where you get "...A country can lock down for a month" from, and why on earth a month (when a partially effective vaccine is 12-18 months away) would be enough. Most infection happens in small family groups. Just the incubation among health workers would be more than enough for it to re-emerge.

A month on, month off perhaps?

We have neither China's surveillance State, nor Singapore's control, nor S Korea's social cohesion - and the jury's still out on all 3 of those regardless.

[einsensei] 16/3/2020 15:37

Ok. One clever wheeze if it can be sneaked through is to maintain the divi at 5.4p per quarter BUT make it a COMPULSORY scrip dividend for all. Better to be ahead of the debt steamroller than get run over. A rights issue isn't an option so go down a compulsory scrip divi route.

[drradcliffe] 16/3/2020 15:34

I suppose if it was a question of meeting short term liabilities versus the dividend payment, the answer is they could suspend it. But that would be extreme, and would imply the REIT doesn't have any net income. To comply with financial and tax legislation, they have to return a minimum of 90% of their taxable income as dividends.

[eeza] 16/3/2020 15:33

REIT's have to pay out at least 90% of their earnings, so they can't just ditch the div (unless their earnings are wiped out), without losing REIT status.

[hpcg] 16/3/2020 15:28

They should reduce the dividend to the minimum required to avoid tax, but then that was always the case, so not sure they will.

Spectoacc - I disagree r.e. 1940, not even close. As I say a country can lock down for a month, which is twice as long as needed. After that most people will carry on as normal, though with hopefully retaining the improved hand washing.

[spectoacc] 16/3/2020 13:54

I agree, but - as a REIT, can they ditch it altogether? At least without some accounting tricks, the required writing-down of the assets potentially destroying the LTV? Could be a curious rock-and-hard-place scenario for all the REITs.