Real Estate Investors Share Discussion Threads

[sleepy] 28/7/2023 10:43

£3.8m -

[tiltonboy] 27/7/2023 10:59

BW site showing York House as sold

[nickrl] 29/6/2023 09:31

CC2014 your being a bit harsh the LTIP is "designed to promote retention
and to incentivise the Executive Directors to grow the value of the Group and to maximise returns" !!

Exactly how they fulfilled any of the conditions attached to the 2020 LTIP is a mystery to me

- 50% of the award subject to absolute NAV growth plus dividends with threshold vesting – 30% of this part of the award – at 8.5% annual growth including dividends and full vesting at 14.0% annual growth
- 50% subject to absolute total shareholder return (share price growth plus dividends) with threshold vesting – 30% of this part of the award – at 8.5% annual growth and full vesting at 14.0%

Also nothing away on current trading performance either. That said despite director largesse they do just about cover divi with free cash currently.

[spangle93] 29/6/2023 08:14

How can they describe the dividend policy as "progressive" - it's all over the shop

RLE is pleased to announce that in accordance with its progressive dividend policy, REI will pay a fully covered Q1 2023 dividend of 0.625 pence per share for the period 1 April 2023 to 30 June 2023 (Q1 2022: 0.8125 pence per share).

[cc2014] 29/6/2023 07:26

Another million shares vested to directors for lacklustre performance.

[spectoacc] 28/6/2023 17:20

Thanks @meanreverter, interesting point.

The compound nature of that excess pay - and the fact they get it whatever the profit is, higher or lower - says to me the discount based SOLELY on that should be far larger.

Solely is in caps because on REITs with reasonable pay levels, and independent boards, the discounts are c.40%, so that ought to be the starting point at RLE.

In fairness, it's held up better than many lately.

[meanreverter] 28/6/2023 14:44

Specto — in belated update of your post of 11 May: The annual report published on 13 May provides the 2022 number for the cost of the board, namely £1.503m. Instead of comparing this to the company's market cap, I consider it against the underlying profit before tax of £4.6m. Thus, if the directors worked for nothing, the profits would be about a third higher. That comparison is rather stark, and I would suggest a comparison basis of reasonable remuneration for the board, at (say) a third of the present level: £0.5m. That would imply profits 20% higher than they are now, if the board were to pay themselves fairly.

The above consideration implies that, in compensation for directors' over-remuneration, and considering no other adverse factor, a discount of 17% in the share price is justified. In fact, the discount is three times that figure. All in all, I regard the shares as at least fairly priced now.

[tr200g] 12/5/2023 14:04

not sure if you've seen but the Burger King deal is now a McD deal. Good news finally clinched and will definitely help reverse the decline of the Market Centre and get those units let up. Quite swift to open this year too
quite unusual that a town centre the size of Crewe didnt previously have either one of these two
hxxps://crewe.nub.news/news/local-news/crewe-burger-king-development-collapses-with-mcdonalds-purchasing-site-for-ps14-million-181153

[spectoacc] 11/5/2023 13:06

Looks like I did go off on one after all @m_kerr ;)

Everything has its price of course.

[m_kerr] 11/5/2023 12:50

very interesting specto. maybe i got a little carried away......!

[spectoacc] 09/5/2023 06:56

But how have the "CEO and CFO...[put] £6m of their own cash on the line".

It's a £50m IT yet they take over £1m/year out of it, year in, year out. And that's what we can see, before you get to the huge web of connected companies, many with some variation of the Bond Wolfe name.

All been done many times above so won't repeat, but Daly alone has 35 separate appointments on Co House, 16 of them active. Bassi has 49.


Edit - YE 2021 the latest to go on, but little different from prior years - Bassi cost the co £746k, Daly £466k, plus share options. In comparison, the 4 rubber-stampers cost £18k, £47k, £42k, £24k, all with no share options.

But don't worry:
"..Directors' remuneration packages are designed to attract, motivate and retain directors of the high calibre needed to help the
Group successfully compete in its market place. The Group’s policies are to pay Executive Directors a salary at market levels for comparable jobs
in the sector whilst recognising the relative size of the Group."

I'd suggest the last part of that at least is being ignored.

And again - costing 2.5% of the market cap PA is only the visible part of the iceberg IMO. There's a lot to go at at Co House, for anyone with the time & inclination.

[m_kerr] 07/5/2023 19:15

very clear, logical capital allocation process here. they are benefitting from having a highly granular portfolio, and avoiding the 'group think' that afflicts many of their peers. and very comforting that CEO and CFO have £6m of their own cash on the line.

that said, their void rate is high, and they will need to refinance their debt in the next two years.

so there are challenges, but those running the show seem far more competent than many of the peers i've come across. i'm not at all surprised mills has built a position.

[rightnellie] 05/5/2023 09:08

Updating financial information on ADVFN is woeful. Shouldn't we all be complaining bitterly about that on these boards

[nickrl] 04/4/2023 09:58

Harwood North Atlantic Smaller Companies Investment Trust up another 3.5m to 7.82% - they've taken a big position quickly and presumably someone Ruffer? is unloading.

[tiltonboy] 04/4/2023 08:39

It states they sold 2.5m shares on behalf of Discretionary clients

[hugepants] 03/4/2023 20:47

Another one. Ruffer with 4.9%


I see they had 6.3%. Not sure why it doesn't say that in the RNS

[nickrl] 03/4/2023 09:26

@huge they've topped up another 2.5m and Harwood has a few investments in teh smaller reits. Guess they picked up from another big holder.

Edit: @huge i missed that two RNS had been issued this morning so i see where your coming from. They picked up 7.5m on 30/3 then another 2.5m on 31/3 so must be an existing large holder selling up

[hugepants] 03/4/2023 07:41

North Atlantic Smaller Companies trust have bought 10M shares. 5.8%

[hillofwad] 31/3/2023 09:20

Yet the costs are likely to be significant and impact on value

In usual style a brief mention buried amongst the washing and no indication of the amount of capital expenditure involved. This all impacting on a warchest to fuel acquisitions

One hand tied behind their back

You can polish these old chestnuts as much as you like but its a difficult task to add any value and even more difficult to sell

It's just damage limitation

The quality of the portfolio is diminishing as they sell assets which show a modest book profit.

It looks very much that they will be shunting out Birch House in Oldbury to turn a profit t most of the book value uplift already catered for in 2022

[poacher45] 31/3/2023 08:36

You will also notice Hillofwad that the directors agree with you on energy ratings and have taken steps to rectify the position.

Portfolio Energy Performance Certification

In accordance with government guidelines, REI has undertaken a programme to ensure our assets meet the UK statutory regulations and timeframes for EPCs. We will continue to upgrade assets when required. An overview of the asset EPC ratings across the portfolio is noted below, showing the progress since 31 December 2021:


% of portfolio (by sq ft)
EPC
Rating A B C D E F G Total
----- ------ ------ ------ ----- ----- ----- --------
31 Dec
2021 0.00 9.48 37.18 43.15 9.35 0.54 0.30 100.00
----- ------ ------ ------ ----- ----- ----- --------
31 Dec
2022 1.36 22.99 31.18 37.49 6.98 0 0 100.00
----- ------ ------ ------ ----- ----- ----- --------

[hugepants] 30/3/2023 20:55

Huge volume today. Buyback?

[hillofwad] 30/3/2023 06:56

Nickl


It's a hard job trying to place values on anything with RLE as they only ever reveal good news

Not an easy job trying to make a silk purse out of a sows ear buy fair play in getting some decent sales in This likely to contunue in H1.

Still seems that anythig which shows a book valie profit is up for grabs The problem is the rump is getting more toxic

Difficult to assess the situation on Crewe. Whether or not the Burger King will be a draw and the loss of overall income with the loss of parking





As usual they do not indicate where overall rental values are standing on the centre We can only assume that these have travelled south combined with service charge caps otherwise they would have mentioned it

I guess any lettings to reduce any unallocated service chrges is to be welcomed

You make a good point about energy ratings With awhile host of outdated buildings in the portfolio this is going to hurt

[nickrl] 29/3/2023 14:16

First thing that struck me reading through annual report is they've done 127 lease events when they only have 201 tenants - ummm. Also disappointing that Bassi didn't highlight how beneficial the Commonwealth games had been for them!!! Anyhow back to the report NRI now down to 12.6m although should increase with the lettings they have in sol hands. You have to say that the sales they've made above valuation indicate perhaps the valuers have got ahead of themselves. Vacancy level slightly down and looks like its occupied properties that are largely being disposed of. Also they declare that there are 2.5m of associated costs of vacant property - ouch.

Debt still looks the Achilles heel here to me despite some short term extensions (surprised lenders willing to do that given IR) they have a cliff edge in a little over 12mths although at least in teh short term the sales have allowed them to eradicate all the higher cost debt.

44% of property EPC > C so to me thats another issue thats needs strategy and perhaps if Bassi will show his face again for an investors forum.

Looking ahead they can cover the lower divi on free cash flow even with disposals as debt costs dropping but that wont be possible when they refi if rates are still at todays levels although they are are pushing on with sales so wont be the full 50m.

Still not a holder but they feel in a better place.