Real Estate Investors Share Discussion Threads

[cc2014] 06/2/2020 15:43

Perhaps it's a false dawn? Perhaps a new day? But we have 55p on the bid now.

It will be much easier for Invesco to sell into a rising market.

[spectoacc] 06/2/2020 13:05

This has of course been going on for over 18 months.

[cc2014] 06/2/2020 12:15

I guess that's another 300k Invesco have just shifted.

At some point the redemptions at Invesco are going to slow down. Partly because the size of the fund is shrinking every month and partly because at some point you reach the area where all the remainding holders are those which don't actively manage their portfolios or will hold regardless of what they might read in the press.

At the end of December Barnett was down to £8m AUM from £16m three years ago.


Everyone can see the trade flow. 90% of the trade by number are buys at 55.7 with one party (presumably Invesco) providing the volume to balance the MM's books apart from a few low number and low volume sellers at 54.8

Today we have one trade at 54.8, yesterday none, the day before that none and the day before that 3 sells...

[chucko1] 06/2/2020 10:34

CC, precisely how I see it. The issue is that Invesco are a little behind the required selling rate (looking at redemptions), but many of the decent REITs are getting bid up, so they should be able to clear the difference near the offer (which is gradually happening).

[cc2014] 05/2/2020 15:21

Retrospectively it looks like Invesco were selling down in line with redemptions and then PAM/Miton came along and wanted to sell some too (probably for risk management reasons due to the merger).

I'm guessing but PAM/Miton stopped selling some time ago and Invesco realised they were the only large seller in the market and have been happy to let the buyers come to them and as long as they shift so many a week or whatever they are happy.

[chucko1] 05/2/2020 15:08

I agree. I sold a bunch at 55. Buying them all back and more at prices between 55 and, until yesterday, 55.25p. Now 55.7p. Could have got 54.5p on the day of the fall, but thought there would be some follow through. Nope. Seller is not in a hurry any more, it would seem.

[cc2014] 05/2/2020 14:19

Looks like the chances of this going back to 53p so I can pick some up are now slim.

So, if that's not going to happen it would be nice if it would zoom up so the share price begins with a 6.

[porsche boxster] 28/1/2020 12:40

Local Midlands business news today (plenty going on!):

Real Estate Investors (REI), the Birmingham-based property investment and asset management company, has enjoyed a roaring start to 2020, announcing seven deals struck in the last few weeks of 2019, totalling £726,268 in annual rental.

REI chief executive Paul Bassi said: “This demonstrates the strength of the regional occupier market, in the right locations, across all sectors and the vibrancy of our regional economy.”

In Birmingham, the AIM-listed REI negotiated a lease renewal with Pertemps who occupy the entire ground floor of Hagley Court, totalling 5,400 sq ft.

Jack Sears, asset manager at REI: “Pertemps has been in occupation since November 2014 and so they wanted to retain their established position in the popular Edgbaston area. Hagley Court has good car parking, adjacent to Hagley Road with good access to the city centre and is on the well regarded Calthorpe Estate.”

Pertemps has agreed a lease renewal for five years from November 2019 with the rent increasing from £36,450 to £45,900 per annum.

In Bromsgrove, AFH Wealth Management surrendered three leases on the ground, first, second and third floor of Avon House, in order to take a new lease on the whole building, signing a ten year agreement from September 2019.

Jack Sears said: “AFH Wealth Management has enjoyed remarkable growth since it moved into what is now called AFH House, previously Avon House, and both parties will now benefit from a new ten year term with an established and respected wealth management company.”

In Warwick at Westgate House, a complex series of negotiations has enabled law firm Moore & TIbbits to expand while Boots has been able to consolidate some of the space it occupied.

Following an agreement with Boots to surrender part of its first floor storage area, REI was able to offer Moore & Tibbits a further 735 sq ft of additional office accommodation, granting the law firm a new lease from January 2020 for ten years.

Mr Sears explained: “This is a deal that works well for all three parties. Moore & Tibbits gains much needed office space, Boots has reduced its footprint but REI has been able to capitalise on the conversion from storage space to office space, with circa £7 per square foot difference in value.”

Boots has agreed a new six year lease from December 2019, while Moore & Tibbits rent has increased to reflect the additional space taken.

In Redditch, REI took possession of the first floor of The Quadrant, actioning forfeiture on Prime Fitness, the gym occupier.

Mr Clark said: “REI took possession of the premises and immediately agreed new terms to The Fit Club Redditch Ltd, agreeing a new six year lease from November 2019, with the rent remaining at £60,000 per annum.

“This negated any void period and retained the client base of the gym by ensuring that the gym was kept open.”

In St Paul’s Place, 40 St Paul’s Square, Birmingham, ISG plc has agreed a re-geared lease for a further five years as the tenant was keen to stay in the city and consolidate its business.

In Crewe, Burger King has signed an agreement to take a bespoke pod on a 20 year lease, and REI are due to build the 2,750 sq ft unit.

Mr Sears said: “This is a welcome addition to the tenant mix at the scheme and supports our strategy of investing into our schemes to further enhance the attraction to both customers and tenants.

Paul Bassi said: “The central theme of all these deals is proactive asset management and we are very proud of the results achieved by our asset management team.

“REI is very well placed to take advantage of the current upturn as companies seek to grow their business and the brakes come off the economy after the election and the confused messages emanating from London in the past three years.”

[clausentum] 28/1/2020 11:25

Invesco were keen sellers at 53p, but don't appear to be selling at 55p. Could there be any reason for this except that they expect the company to be bought at a share price nearer NAV? Would they be aware if the company was actively trying to find a buyer?

[chucko1] 23/1/2020 15:11

In particular, the huge SL GARS has achieved the cubed root of SFA the past few years. That is truly remarkable given the rallies in bonds, credit and equities. They have strategies where they look at various arbitrage opportunities - they have around 20 on the go at any one time. Surely they could have eaked out 10% the past 5 years!! Nope.

[spectoacc] 23/1/2020 14:54

Absolute Return funds are the best - when markets go up, they make you much less. When markets go down, they often still lose you money. Some of the performances vs eg "Libor + a few %" targets have been amazing, down 20% in some cases.

[cc2014] 23/1/2020 14:46

Indeed. or any one of numerous other stocks.

What I find most interesting is that a fund manager running a "Global Opportunities Fund which makes money by exploiting pricing of closed end funds" has a £100m market cap AIM stock on their radar.

The fund has AUM of £79m and has put £3.6m into RLE or 4.6% of it's total fund.
There again despite having SONIA+2% as it's benchmark the monthly factsheet does not have this as a comparator but instead offers FTSE all-share index, ftse small cap(ex-IT) index and FTSE AIM index. Can't say I'm very impressed with Miton. But if what you are after is safe and secure it does seem deliver what it says on the tin

[chucko1] 23/1/2020 14:44

I totally agree with you both - create your own portfolio with RLE as a part of it. However, as a place to park short term money, it might have its place.

[chucko1] 23/1/2020 14:42

Sonia 3m is merely the 3m average of the daily Sonia 7am fixings. It is the U.K. equivalent of the SOFR rate whose daily average will be employed to replace Libor in 2021 in the US. At any given time, certainly in the current benign rate environment, the difference in the Sonia you see and the 3m average will not be likely to affect your investment decisions!

Right now, the 3m will be lower than the published overnight rate as it is expected that the BoE will reduce base rates at some stage during the next 3 months. The 3m rate you see today is merely the expectation of the average of the overnight rates over the next 3m.

Make sense?

[spectoacc] 23/1/2020 13:51

...Or just buy RLE :)

[cc2014] 23/1/2020 13:26

I had a few minutes to spare so took a look at the link above. Indeed Miton were buying small amounts of RLE in Decemeber whilst PAM were selling large amounts.

The Miton Global Opportunities Fund puzzled me so I took a closer look. It's investment objective is 3 month SONIA +2%. So, I went to look that up but the BOE don't seem to publish that (rant!) only daily SONIA but whatever I guess SONIA is around 0.7% regardless giving a target investment objective of 2.7%.

Hardly exciting when you can get 2.1% on a 5 year bank/building society bond.


In order to get this 2.7%, Miton charges a 0.65% management fee or on-going charges of 1.3% if you prefer. And what does it do with the money. Well "it exploits pricing of closed end funds", buys them at a discount and holds them waiting for the gap to close if you prefer. And how much do these funds charge. Well I looked at the first one on the list Alpha Real Trust, management fee of 2% according to HL and and on-going charge of 3.5%.

...

so, to get a non-guaranteed return of 2.7%, you pay 4.8% in charges. Of course you might do better than 2.7% which the fund has indeed attained of a 5 year average.

[rambutan2] 21/1/2020 18:16

Mr Greenwood says he was a buyer in dec:

[tiltonboy] 17/1/2020 18:16

The larger trades which are round numbers are the other side of the smaller purchases. Work through the trades today, and you will see the pattern. This has been going on for months.

[chucko1] 17/1/2020 16:38

I don’t recognise that. I have done a number of trades and see them as only individually counted. I suspect most trades are retail as I am.

[tiltonboy] 17/1/2020 15:11

chucko,

Beware the marks. Most of it is double-counted as the MM is taking a commission, and doing both sides at the same price

[chucko1] 17/1/2020 14:50

The issue is one of timing. His two largest shareholders are selling for purely structural reasons, not fundamental reasons and this will attract all number of buyers at the current valuation. One of them will be done in a few weeks and the other, well, that is the big question. It seems that the sellers are able to get on average 200,000 shares a day sold at the offer. Do the maths and we see that it will be circa mid year at the current rate that all sellers will be satisfied.

His “paper may be good”, but it will likely be far better in a few months. He stated that it will be a YEAR of consolidation. I hope that his conversations with potential takeover targets are sufficiently gentle that he can move at such a sedate pace.

Today so far, 350,000 sold at 55.00 - precisely the offer. Yesterday a lower number, but mainly at the full offer. But we should take into account the overall positive market conditions, so nothing is predictive in my numbers. I think they could increase this to 500,000 a day were they more aggressive.

[cc2014] 17/1/2020 14:35

The paper ain't great whilst they've got PAM/Miton selling out. As for Invesco the RNS feed suggests they've stopped but maybe they are just going slowly but regardless I'd be pretty sure they will be back selling if the share price rises 10%.

My guess is Bassi isn't really looking to do deals that big. More putting some feelers out.

I suspect he's more interested in RLE being taken over than he is in an agressive expansion.

[tiltonboy] 17/1/2020 14:31

I'm sure they wouldn't countenance cutting the dividend, which is of more importance.

[skyship] 17/1/2020 14:27

Perhaps could issue a chunky ZDP. They've totally gone out of fashion and very few still in existence. A great route for a propco as you lock in, say, 4.75% for 7yrs, whilst buying properties on an 8% NIY...