Real Estate Credit Inves... Share Discussion Threads

[davebowler] 01/10/2019 15:20

1 October 2019

Real Estate Credit Investments Limited

Close of Issue of New Ordinary Shares

Further to the announcement on 19 September 2019, the Board of Real Estate Credit Investments Limited ("RECI" or "Company") is pleased to announce that the Company has raised gross proceeds of GBP17 million through the issue of 10,208,480 new ordinary shares ("New Ordinary Shares") at 167 pence per New Ordinary Share (the "Placing").

[davebowler] 19/9/2019 08:36

New issue of shares by a placing via Liberum.

[davebowler] 16/9/2019 13:41

ARTL, trading at 17% discount to NAV, just announced -

The Company is currently targeting up to GBP70 million for investment in secured senior and mezzanine loans.

Each loan will typically have a term of up to two years, a maximum 75% loan to value ratio and be targeted to generate attractive risk-adjusted income returns. Repayment proceeds will be reinvested into new facilities. The Company continues to develop a strong pipeline of new lending opportunities.

[davebowler] 13/9/2019 10:59

Liberum;
Note: Laser focus on risk-adjusted returns

Mkt Cap £332m | Prem/(disc) 1.5% | Div yield 7.2%

Event

The investor day demonstrated the level of expertise across the real estate debt team and the manager's ability to position the fund to adapt to changing market conditions. This has been reflected in the increased exposure to senior loans on value-add properties in the UK post-Brexit. The manager has been targeting larger loans due to lower competition and generally higher borrower quality. RECI's ability to access the larger position is provided by the scale of Cheyne's platform. We believe RECI’s 7.2% dividend yield is attractive given the level of protection within the capital structures in which it invests.

[davebowler] 09/9/2019 09:42

Liberum;

Steady progress with new commitments

Mkt Cap £331m | Prem/(disc) 1.2% | Div yield 7.2%

Event

RECI's NAV per share at 31 August 2019 was 164.0p, representing a 0.5% NAV return in the month. NAV total return to date in 2019 is 6.1%.

In terms of portfolio activity, a whole loan secured on a development near Old Street roundabout in London fully repaid with a realised IRR of 9.8%. The manager committed £25m to a senior loan for the development of a 369 key aparthotel in Lisbon. This is now the largest commitment in the loan portfolio (total commitment of £35.4m and LTV of 45%).

Cash on the balance sheet at the end of the month was £49.8m (15% of NAV) and gearing ratio has remained broadly stable at 18.9% of NAV (maximum limit of 40%), leaving the company well placed to fund pipeline transactions.

Liberum view

The manager has made steady progress in committing the £78m of equity capital raised at the end of August. £44m has been committed to three new loan transactions in the three months since the capital was raised. In addition, the company has paid down over £30m debt. We expect the remainder of the cash balance will be invested in the near term. The manager's flexible mandate to invest in loans and bonds enhances the range of investment opportunities for the fund as evidenced by the growth in the portfolio size (including undrawn commitments) to just under £400m in recent years. This has been achieved despite the consistent requirement to reinvest capital from the short duration portfolio. Importantly, the portfolio growth has not been at the expense of additional risk as LTV ratios have remained relatively stable.

[skyship] 09/9/2019 07:35

RNS out, but website not yet updated!

[badtime] 09/8/2019 13:27

Can you check out that new office development:)

[skyship] 08/8/2019 07:27

MONTHLY UPDATE:

• Following the 3p dividend paid in the month, the NAV as at 31 July 2019 was £1.662, representing an underlying increase for the month of 1p
• The whole loan to a hotel in Canary Wharf, London, was repaid in the month with a realised IRR of 9.45%
• Committed £10.5m to a whole loan for the development of an office building located in Clichy (Paris suburbs) in France
• A further £4.6m was drawn in the month for existing loans
• Cash of £39.5m (representing 11.9% of NAV) combined with the current leverage headroom leave RECI both well positioned for upcoming pipeline deals, and defensive ahead of potential market volatility.

[skyship] 05/7/2019 09:03

XD yesterday (4th July). PD 26th July.

[skyship] 05/7/2019 07:19

MONTHLY UPDATE:

• NAV per share rose to £1.682 per share in the month
• Declared a dividend of 3p per share to be paid in July
• Reduced leverage to 18.3% of NAV (against a limit of 40%)
• Committed £8.7m for the acquisition and refurbishment of a mixed use office/retail building in Paris’ central business district
• A further £5.0m was drawn in the month for existing loans
• Remaining cash of £47.5m (14.2%) of NAV leaves RECI well positioned for upcoming pipeline deals.

[davebowler] 25/6/2019 10:10

Liberum;
Strong performance in FY2019

Mkt Cap £338m | Prem/(disc) 1.1% | Div yield 7.1%

Event

RECI's NAV per share at 31 March 2019 was 165.2p per share (March 2018: 164.0p per share), reflecting a NAV total return of 8.0% for the year. NAV has risen a further 1.5% in the two months to May 2019.

The portfolio has grown from £245m to £303m over the year following a number of capital raises. The portfolio comprised 50 positions in loans (46% of total value) and bonds (54% of total value). The weighted average levered yield is 9.9% and the average LTV is 66.4%. The portfolio remains focused on the UK, France and Germany.


The manager has capitalised on reduced competition in the lending market to deploy capital in transactions offering attractive risk-adjusted returns. RECI has taken advantage of the market environment in the period post-Brexit to invest over £400m of capital across loans and bonds. In terms of geographic exposure, the portfolio's weighting to French assets has increased as limited competition has provided attractive lending opportunities. The manager remains cautious and the focus continues to be on senior loans and bonds.

Liberum view

The manager has been able to maintain strong returns in recent years, whilst also moving into lower risk positions. RECI has tended to outperform in periods following market weakness and this occurred again in Q4 2018 as the manager capitalised on market volatility to acquire bonds at attractive entry prices. RECI invested £32m across three new bond positions ahead of the market recovery in Q1 2019. The quarter to March 2019 delivered the highest return in the financial year with a NAV return of 3.1%.

In our view, the real estate debt sector offers the most attractive risk-adjusted returns in the alternative lending space. The manager’s flexible mandate to invest in loans and bonds should help to ensure capital from the recent raise is deployed swiftly. The portfolio has more than doubled in size to over £300m as the manager has also successfully dealt with reinvestment risk from a short duration portfolio over this period

[davebowler] 14/6/2019 09:02

ARTL up 10% today and still 20 odd% below new NAV after the large buyback.

[owenski] 12/6/2019 08:44

Thanks Skinny

[skinny] 12/6/2019 07:48

MONTHLY UPDATE
• NAV as at 31 May 2019 was £1.676, an increase of 1.0p per share in
the month
• RECI invested £8.8m in two new CMBS bonds, backed by a mixed
portfolio of Italian commercial real estate let to rated tenants
• RECI’s net assets grew to £333.8m after a successful capital raise of
£78m at the end of May
• Following this, at 31 May, RECI had a cash balance of £95.9m, which
will enable RECI to continue to participate in the investment
manager’s strong pipeline of deals, several of which are due to
complete and be funded in the coming months.

[davebowler] 21/5/2019 14:06

ARTL Alpha Real Estate have again confirmed their intention to reduce their direct exposure to property development and will allocate instead a good portion of their assets to development finance and hence pay a bigger dividend.If it intends to rival RECI compare its bargain 25% discount to NAV compared to RECI's premium.

"ART is currently planning to allocate the proceeds from its recycled capital to augment and diversify its portfolio of secured real estate senior and mezzanine loan investments. This is expected to increase the company's current earnings."

[skyship] 20/5/2019 16:03

Hi BT - yes, sold out about a year ago as couldn't see any capital growth in view of the constant placings. Surprised to see them back over 170p...

[badtime] 17/5/2019 14:48

Sky have you sold any?

[davebowler] 08/5/2019 10:40

Placing at 170p

[skyship] 08/4/2019 18:07

MONTHLY UPDATE:

• NAV as at 31 March 2019 was £1.652 , bringing the total NAV return for the financial year to 8.6%
• NAV growth in the month driven by the strong interest income , mark to market gains on the bond portfolio and a loan repayment at rate accretive to NAV
• This loan to a regional UK housebuilder, which was secured by its properties and with additional security over manufacturing equipment and the company repaid in the month with a realised IRR of 23.2%
• Since month end, RECI has invested £15m in a new UK loan deal, which is backed by a portfolio of high quality hotels in central London
• Following this investment, RECI has a cash balance of £25m
• Cheyne’s pipeline of both loan and bond deals remains strong, with several investments expected to complete in the coming months

[davebowler] 05/4/2019 09:46

Liberum;
Real Estate Credit Investments

Strong performance in Q1 2019

Mkt Cap £261m | Prem/(disc) 2.9% | Div yield 7.1%

Event

RECI's NAV total return in March was 1.5%, bringing the NAV total return for Q1 2019 to 3.1%. NAV performance in the month benefited from interest income, mark-to-market gains on the bond portfolio and an accretive loan repayment.

The loan that repaid was to a UK housebuilder and was secured on its properties and manufacturing equipment. The realised IRR on the loan was 23.2%. RECI has reinvested a large portion of these funds in a new £15m loan secured on hotels in Central London.

RECI is well-placed to fund near-term acquisitions with £25m of cash. Gearing increased marginally in the month to 39.5% of NAV.

Liberum view

The strong performance in Q1 has resulted in an 8.6% NAV total return for the financial year to March 2019. This is in line with our forecasts for the period. The company has produced consistently strong returns in recent years. We maintain our view that the real estate debt sector offers the most attractive risk-adjusted returns in the alternative lending space. We believe Real Estate Credit Investments should trade at a premium relative to the peer group given its long-term track record and differentiated origination.