Real Estate Investors Share Discussion Threads

[nickrl] 25/9/2022 21:37

Interims due this week on 29th Sept

[hillofwad] 22/9/2022 12:20

Yes plenty up for sale at below purchase price Debt wise I should imagine the banks are pretty happy with what they are achieving

[sleepy] 22/9/2022 12:18

Also little matter of reducing debt

[nickrl] 22/9/2022 11:15

flatters the P&L line but does nothing for income to pay the dividend but that is secondary consideration as long as BoDs salaries, bonus and fees are covered.

[hillofwad] 22/9/2022 10:47

They must have shifted £10m + worth of kit in H1 Having taken a knife to retail valuations recently certainly showing a small profit over book

[nickrl] 22/9/2022 08:37

RLE H1 results were out on 21st last year so ought to be imminent so we can see how the stealth winding up is going on.

[hillofwad] 01/9/2022 04:59

They have certainly put some hay in the barn in H1 and H2 lookinhgt that way too with a lot of kit on the market The shops were generally showing around 8% yield which is perfectly accptable to hold in the portfolio but I guess they are under pressure to reduce LTVs so understandable

All the sales achieved are effectively carbon zero or less from original purchase price

Values will have been downgraded over last few years to show a notional book profit

Its always quoted without selling fees deducted to make it look sweeeter !

My view nothing too wrong with what they are doing but all very pedestrain and if they have identified any opportunities to use proceeds s to buy -fine

Its been a long time since they bought anything !

The reality is all those scattergun purchases during 2015-2017 have not produced a fat lot and very little evidence of them adding any value by asset management

[nickrl] 31/8/2022 20:16

H1 report should be out within the next few weeks may give us some insight.

The shops probably weren't producing much so if they are getting them away for current NAV that will be reasonable.

[hillofwad] 25/8/2022 08:56

Bond Wolfe still busy with the clearout.It does look as if anything can clear current book VALUE itis up for grabs irrespective if the price achievable is above the original purchase cost.

For example they have recently let with incentives the former Bathstore unit at Newcastle Under Lyme which has been vacant for sometime to a restaurant/takeaway operater. Local covenant so will be interesting to see if they get close to asking price

hxxps://www.bondwolfe.com/agency/properties/unit-3-barracks-road-newcastle-under-lyme-staffordshire-st5-1aw/

Originally bought with Xercise4 less and Dominoes as part of a terrace off a yield of about 8% Should imagine the value has already been book discounted sufficent to turn a small profit



Nothing wrong with that I guess but achieves very little apart from generating fees for BW !

[hillofwad] 19/7/2022 20:16

It does sound as if they are very competitve on auction fees at 1%. That does surprise me . Certainly give Allsopps a run for their money if it's 1% their standard rate on commercial property investments

They must be giving it their best shot to get the business Does help publicisng having 9 sold prior ,mind LOL

The irony is not lost the dog in Walsall has just been withdrawn



Maybe not a fat sausage but a chipolata but neverthless but £1400 is £1400!

Who knows what deal they do for RLE?

As it happens I did try to buy a few RLE shares a couple of years ago in a SIPP managed by Bestinvest Tilney

They wouldnt let me do it Apparently RLE unlike most other REITs or AIMs don't meet their criteria! That really doesn't sound very good at all!

[ravpabari] 19/7/2022 17:34

I anticipated that you might say that, Hill- So I asked..

BW charge the successful buyer an admin fee of £1400 plus vat. I queried about additional fees in legal docs and they said and I quote “sellers can include their reasonable costs in the legal pack to include solicitors/search/auctioneer fees, but these have been capped to £5995.” The young lady went on to say that she advised that I didn’t include any of my costs or only some of them as it could put potential buyers off and that savvy buyers would factor it in to their final bid anyway. She also said that any costs I wished to include needed to be set out clearly in the “special conditions” page of the legal docs and that the full docs needed to be with the auctioneer no later than 10 days prior to the auction to give buyers a chance to read them.
Not quite the fat sausage you expected then!

[hillofwad] 19/7/2022 17:08

Can't argue with the 1% very reasonable . Yet that is only half the story It's a sausage.

You shorten one end and it gets fatter the other
How much of the auction fees does the buyer at auction pay on top ?

This of course affets directly the level of their bid and hence the net receipts for RLE and ultimately their shareholders

It's never straightforward, is it ?

[hindsight] 19/7/2022 16:05

ravpabari, for info HoW was active on the LSR thread few years back, pointing out the bear traps. Anyway if RLE is such good value and not a cash cow for Bassi and co, then I look forward to a 50p offer for mine from them in the very near future

[ravpabari] 19/7/2022 15:55

Hills

I didn’t say they are separate? My understanding is that both are run by Gurpreet Bassi so not sure what gain there is for him or Bassi family to want a “slice of the pie” for different departments as they end up with the fee regardless.

As stated previously- my understanding is that once agency dept agree a sale and a purchaser starts dragging heals or going quiet, they drop into auction to flush them out and either jolt them in to action or prompt an underbidder to put their money where their mouth is. Also, with a purchaser signing an auctions contract the sale is deemed more secure.
Still not sure what the adverse affect to you or shareholders is to this?

Just FYI I just mystery shopped BW with a potential sale and asked about fees to sell in auction or private treaty and after asking the usual questions re potential value etc- they quoted me 1% sale fee whether it’s auction or private treaty. So once again you have just made up that the auction fees are higher than agency.

Fair enough if the RLE shares aren’t for you- but I still don’t get the Bassi family obsession particularly when you have no intention of investing.

[hillofwad] 19/7/2022 15:34

That's it for now


As for buying RLE shares I tried one time but I couldn'tI do all my purchases via a SIPP thru Bestnvest Tilney

They have recntly amended their criteria on what comapnies can or can not be be bought which includes most AIM comapanies but RLE no longer tick all the boxes and are excluded !

[hillofwad] 19/7/2022 15:23

Well first and foremost Auction fees are usually much higher than agency fees They all come off the net proceeeds


Agreed It's pure speculation what fees have been charged in this particular instance but its usual practice amongst selling aagents that if a property goes to auction which they have been marketing they get a fee too

Dont take my word for it have a word with Savills


On one hand you are saying that auctions and agency are seperate but operate under the same banner so you would think then that both would want a slice of the pie if a property is sold prior the auction house gets the full fees or at least that is the usual practice Why should they sell themselves short as a favour!

What is noticeable though that there are very few other properties outside RLE'ownership appearing in the catalogue sold prior I wonder why that is


Fees apart what it does do is beef the catalogue up

[trcml] 19/7/2022 15:08

Where an auction is a public auction the resultant price of a property sold at such an auction is normally disclosed. A sale prior to auction is not a sale at public auction so there is no need to disclose. > if its shenanigans you're after uncovering, a few auctioneers offer "underwriting": with the seller's agreement the property is sold prior to auction to a reliable trusted buyer who then re-offers the property for sale at the same auction in the hope of it fetching a higher price: The first buyer pays the deposit which is returned when the end buyer (also paying a deposit) completes. the difference between the first prior and the end price is shared with the seller, the auctioneer gets paid twice, not necessarily the same percentage. if the property does't fetch a higher price then the auctioneer withdraws the lot, the first buyer completes.

[ravpabari] 19/7/2022 14:59

Hills

Again you are speculating and have no basis or proof to your claims that both agency and auction has a fee.

I have it on very good authority (a relative is involved with a conveyance firm that is retained by the auction side) that Bond Wolfe is seen as one entity with different departments and whether or not an RLE (or any property for that matter) is sold by either the auction or agency arm, the department that secured the sale gets the fee- so this feefest agenda you are pushing is a fallacy.

[hillofwad] 19/7/2022 14:49

Again you are deliberately missing the point.Whatever precise role his son has or not had with RLE there is a family involvement and with the substantial property West Plaza acquired from Bassi family intersts

We clearly think diffentally about whether the acquistion of West Plaza was appropriate

A number of issues -Bond Wolfe
Let's get the timeline here

Bond Wolfe agency were instructed by RLE to sell the proeprties Now if as you suggest the properties e were placed at auction as a "tactic" to tickle things along LOL (as you say seperately with Auctions run by now esatablished nephew) both would be entitled to a fee


Even if that wasn't the case its usual practice for the original sellig agent if sold by auction to get a fee too

It really isnt the norm for a vendor to place a number of properties at auction sell the lot prior to place a no of properties only leave the rag in Walsall to go to the room You will note there are very few others sofd prior in the catalogue

You are correct its usually just flagged up as sold prior on the auction site but you would normally find the selling agents on their news feed giving the amount RLE investors unliklely to find out the exact amounts!

So its a feesfest for the wider Bassi family

[ravpabari] 19/7/2022 14:32

Hills
Cottons Auctions and SDL auctions (both local Birmingham auctioneers) have properties listed on their most recent catalogues as “Sold Prior to auction” and neither of them disclose the price. Go check for yourself.

Have also just checked Allsops and Savills recent auctions on their sites and they do the same.
Seems it’s the norm.

[ravpabari] 19/7/2022 14:27

Hill

I have made my enquires and I know I’m correct. You have gone from saying he definitely employed by RLE to he is involved with liaising with external agents- quite the climb down.

So your issue here is that Bond Wolfe charge a fee for selling? Bond Wolfe is run by Gurpreet (nephew) he also is not employed by RLE and he charges a fee for his companies service like every other agent. Sure Paul is involved with Bond Wolfe, but they are doing the job that they are paid to do. It’s not like he is paying them for nothing.

I think “giving up” is probably the right thing to do.

[hillofwad] 19/7/2022 14:23

Rav
Oh dear yhave got it around your neck I didnt say BW never disclosed prices but have chosen to do so on those RLE properties in the 21st July catalogue


Before mouthing it off you need to go and visit Bond Wolfe Auction site Find the RLE properties and you will note the following words: SOLD PRIOR FOR AN UNDISCLOSED AMOUNT
Here is one to help!

hxxps://www.bondwolfe.com/auctions/properties/176264-property-auction-birmingham/

[hillofwad] 19/7/2022 14:16

Rav

I think you need to make your own enquiries about his son .He has certainly been involved with liasing with external agents instructed on RLE properties and that Bassi
has talked about succession at RLE

He was also involved with West Plaza in a private capacity a

Auctions

Sure on one or 2 but with 9 These arent distressed sales so if it happens it happens On the other hand the agent knows he has a captive buyer ,someone who has already underatken en due diligence and with an undiclosed reserve equating to that offer stands every chance of beating it on the day

Its a feesfest for Bond Wolfe and Bassi's private interests

Oh dear You really don't get the idea of integrity do you ?
He started his whole estate agency career with a Bond Wolfe board on his own property msileading the public that he had actually sold a house when he hadn;t
I really give up

[trcml] 19/7/2022 14:05

Quoted plcs generally only deliver good news and twisted. The PR people see to that. The idea is to maintain at least support the existing share price and encourage buyers for positive prospects. Without more buyers than sellers not only would the share price languish but also director share options can lose their appeal. Every so often, a company's prospects are promoted by tip sheets even though most if not all of what is written about is already in the share price MMs join in by increasing the share price to deter buyers which has the desire opposite effect by making naive investors think there is something to go for. then having got rid of a load of shares on the new buyers, the MM lowers the share price to deter sellers which has the opposite effect when existing shareholders sell. Whether the approach succeeds depends upon the investor market's perception of the news. > The challenge for directors of quoted propcos is how to overcome adverse media comment about the state of the property market at any time. Which in the case of REI is not easy because in my view most commercial property in the provinces is ex-growth.