Real Estate Investors Share Discussion Threads

[nickrl] 02/12/2022 17:52

Once they cash in those generous share options they will progressively come to control more of the company

[cc2014] 02/12/2022 12:40

Fascinating. Bassi was buying down here last time at around 30p IIRC.

And that's not a small sum from the FD.

[nickrl] 02/12/2022 11:35

Bassi and FD think its worth something picked up a fair few yesterday

"Paul Bassi, Chief Executive and Marcus Daly, Finance Director purchased 3,780,508 and 1,000,000 ordinary shares of 10p each ("Ordinary Shares"), respectively, at 28 pence per Ordinary Share.


Following these transactions, Paul Bassi is interested in 16,000,000 Ordinary Shares (representing 9.26% of the Company's issued ordinary share capital) and Marcus Daly is interested in 3,513,487 Ordinary Shares (representing 2.04% of the Company's issued ordinary share capital)"

So they got someone to sell for cancellation as well as top up their own holdings

[cc2014] 02/12/2022 08:50

I took a quick look at RLE this morning only to discover not much has changed in the last year.

The LTV is too high heading into a downturn and their cost of debt is going to be much higher when it is renewed.

Yet the management keep buying back shares which although NAV enhancing depletes their cash balances and will make the cost of debt even higher when they renew.

I'll move on and come back in another year. It's far too exposed to an economic downturn for my liking even at 30p to buy.

[nickrl] 02/12/2022 08:36

Current buyback concluded again 28p. Wonder who are they finding prepared to let them go at this price.

[hillofwad] 28/11/2022 15:22

Yes indeed,

All this dust being created to show a "profit " meanwhile Bond Wolfe cream off the fees and the properties also provide useful ballast for Bond Wolfe auctions to fill out the catalogue and attract in new business.

Remarkably very few actual make it to the bidding room !

Some jusrification I guess is that selling anything over book reduces the LTVs but show little asset management

They do very little on that front . They undertook the development with Burger King but that was always on the cards when they acquired the Market Centre

[trcml] 28/11/2022 14:03

Creative accounting does not make up for the fact that they are likely to be making a loss on purchase price. Selling through their "pet" estate agent is a good way to extract from the transaction money which would otherwise have belonged to REI.

[hillofwad] 28/11/2022 10:06

TRMCL



They acquired Maypole for £6.1m +costs and they have it on the market for £6.29m So correct just like Wolverhampton unlikely to show a profit from the original purchase after transaction costs are factored in,if sold.

Yet the value of this asset would have been written down in the books in 2020 back when Travelodge negotaited a deal with their landlords to cut the rents



That would have been well below £6.1m so every chance that they will be able to sell to book a profit

The point I am making is to achieve that they will have to underwrite the short fall in rent tothe buyer after the sale The sting in the tail which RLE always fails to highlight

[trcml] 28/11/2022 09:25

I note from my records that Maypole Retail was acquired in 2017 at initial yield 7.22% and reversionary 7.31% excluding acquisition costs. Unless REI have made a profit on the interest costs (rent minus interest) likely it'll made a loss based on the asking price (offers over!)

[hillofwad] 20/11/2022 07:47

Bond Wolfe are showcasing the majority of RLE's portfolio including Maypole where they might get out ahead of the game Nice work for them !

Reading the details Travelodge negotiauted a rent reduction which means RLE will be topping up long after the sale Medoum term liability for a short term gain

They have the River Islnd shop on the market in Wolverhampton Bought for £2m in 2015 and on the market for £2m ! So after taking into accpunt both sales and acquistion costs their only hope for a profit is on a recent book value reduction

You have to beg the question why are they selling but nice fees for Bond Wolfe !

[sleepy] 11/11/2022 22:39

RLE shareholders - presumably you feel that the CEO and CFO are working wholly in your interests. (Perhaps there are many potential RLE shareholders who don’t feel the same way?)

[nickrl] 11/11/2022 22:28

Perhaps Bassi needed some cash no RNS has materialised

[trcml] 11/11/2022 11:28

I reckon RLE was contacted by the holder wanting to sell, so it announced the buy-back at a higher expenditure to mask the hidden agenda.

[2wild] 10/11/2022 07:13

At 2pm RLE announced £2 million share buy-back. By close they buy 6 million shares at 28p in a single trade, 84% of the buy-back program, at a price below the 12 month low. That is some going.

[hugepants] 08/11/2022 10:46

My concern was the vagueness of the LTV covenants but the fact they have not reduced the dividend would suggest they are not in any danger.

[nickrl] 08/11/2022 10:43

Was getting close to its all time low but picked up a bit but does seem people have finally woken up to this being not as rosy at its presented. That said yield on 11% makes it interesting as my assessment is they can just about cover the divi with what they've told us at H1 but would like a trading update but they a notoriously laggy with data here so unlikely to hear anything this side of Xmas.

[nickrl] 29/9/2022 09:43

Yes NAV is up but the world has moved on since end of June and limited reference to that at what it might mean. Anyhow as we expected NRI down as RLE has been nett seller for some time. Assets sold in H1 were yielding 7.5% and looks like they've forgone another 300k so far in H2 but if the lettings they have in discussion come good that will neutralise income forgone. Kept a lid on expenses although as % of portfolio it continues to increase and doubt Bassi/Daly will take any cuts in salary/share schemes.

At the cash level the divi is covered so looks sustainable for a while but with RLE you never really know whats lurking below the surface ie how many breaks/expiries are coming up. Bassi dangling a capital return event but can't see it happening with IR so high now need to push down on debt.

He had to mention Commonwealth games but seems it was good for Birmingham but doesn't mention RLE anyhow hes now moved onto Investment Zones as the next best thing.

[hillofwad] 29/9/2022 07:43

The empty space that never gets mentioned .The unrecovered service charge must be horrrendous. Every lease renewal must involve a cut in rent Unless they tackle this they will never get above 90% occupancy

Crewe Unit 6/7 Market Centre, Crewe, CW12 2NG 2,205 Rent £80,000 AVAILABLE PDF Email
Crewe Unit 16/17 Market Centre, Crewe, CW1 2NG 2,860 Rent £80,000 AVAILABLE PDF Email
Crewe Unit 18/19 Market Centre, Crewe, CW1 2NG 3,796 Rent £100,000 AVAILABLE PDF Email
Crewe Unit 21 Market Centre, Crewe, CW1 2NG 835 Rent £42,500 AVAILABLE PDF Email
Crewe Unit A Market Centre, Crewe, CW1 2NG 5,596 Rent POA AVAILABLE PDF Email
Crewe Unit 4/5 Market Centre, Crewe,CW1 2NG 3,945 Rent £85,000 AVAILABLE PDF Email

[hillofwad] 29/9/2022 07:17

All as expected


11 assets sold totalling £5.7 million (before costs), an aggregate uplift of 27.9% above year end book

Thats the way to do it reduce book values to show a profit !

About £10m for the year LTV around 40% and maybe another £4 £8m m worth of sales to come

They never mention Crewe or what they can do about it

[spectoacc] 27/9/2022 14:06

Is that the Bassi & Daly wages, expenses, and pension facility?

[sleepy] 27/9/2022 13:53

Please correct me if I am wrong but I suspect that at least one of their facilities requires them to pay down debt on a continuing basis

[hugepants] 27/9/2022 09:07

Agree on the lack of info on covenant tests nick. It's always been a negative. RGL have a similar issue. Still I dont think you would expect them to pay such a huge dividend if they were in immediate danger of being breached?

[nickrl] 26/9/2022 19:27

With LTV still sitting above 40% there sales have proven to be smart and expect Bassi to take the credit of course. They don't have any immediate debt to refinance but they don't appear to publish any data on covenant tests and im not sure any of the debt is an RCF so potentially penalty for paying down debt early. It will be useful to know how much income they've forgone with sales here but dividend was well supported and given there commitment to capital return a special could have been on the cards but with market maelstrom they will no doubt hold back on that i suspect but lets see.

[hillofwad] 26/9/2022 09:04

Should think H1 will look fairly respectable At least £10m in the Tommy reducing debt and Q3 bagging a few more

However shifting a few of these office buildings might prove a little difficult