Regional Reit Share Discussion Threads

[hindsight] 03/10/2023 19:05

Im still wondering regarding the bond RGL1, let alone the equity, sold half bond a while ago

[williamcooper104] 02/10/2023 22:07

52 gearing against a few years term certain income is simply nuts, totally crackers Add in the operational gearing through many of their assets being really development assets - a yielding land bank - and you get super sonic leverage Land and BLND blew up in the credit crunch with LTVs only a little bit higher; but with far superior assets

[williamcooper104] 02/10/2023 22:04

Both DGI9 and RGL have burning balance sheets But whereas DGI has great assets, RGL has problem assets For their asset risk and operational gearing they ought to be have basically no debt other than a bit of working capital

[williamcooper104] 02/10/2023 22:00

That's it £200 to get to EPC B in Mayfair is maybe just 9 months rent In the regions it's more than the asset is worth and more than the asset would be worth post the £200 psf spend So they're properly stranded It'll still likely work for the assets in the best locations as rents will have to rise there and will be paid by tenants wanting prime space ; but anything slightly away from prime likely to be dead

[williamcooper104] 02/10/2023 21:58

Could be problem is most of the larger PE money is run by our American friends and they are so so down on offices as a sector I think a break up and sale to local investors/developers more likely

[nickrl] 02/10/2023 21:52

So paid for Edison was telling us how sustainable the divi was only four mths ago and has now taken the red pen to their forecast for next two years. They still forecast that the reduced divi is covered even with 100m of sales and a refi of the bond at 10%. Doesn't seem credible and the mkt certainly has no faith given new atl again today. Been no RNS saying they've made any sales or asset mgt deals but should get a trading update within the month.

As per my stuck record for several years on here they have several big tenants with the clock running down to early 24 that if all are lost there is no way even that 4.8p divi could be held. Is this the next DGI9 where the divi will be canned?

[spectoacc] 02/10/2023 16:04

Why on earth anyone would want it is beyond me.

As an ST article put it at the weekend - anything outside the South East probably doesn't have the land value backing it.

They used retail as an example - how many empty, un-repurposed shops there still are on high streets, post the retail bust.

I bet Inglis is still talking a good game. Doubtless the change in the market when it comes will have been "unforeseen".

[cruelladeville] 02/10/2023 15:53

Friday and this morning I thought the share price might have stabilised a bit here. Obviously not. Expecting an opportunistic PE bid to break up and sell the portfolio soon?

[cruelladeville] 27/9/2023 17:23

From Edison today - https://www.edisongroup.com/research/regional-reit-dividend-rebase-pragmatic-and-sustainable/32716/?j=109179&sfmc_sub=12780302&l=716_HTML&u=3091414&mid=536001663&jb=11

[fred177] 27/9/2023 15:21

Currently retaining 76% And maybe they’ll get a few new tenants and trend is for higher rents but sure maybe capex required

[m_kerr] 27/9/2023 15:06

i quoted the CEO, who stated due to properties having secured lending on them, once they are sold, that secured (cheap) debt is also paid off.

so yes to raise £50m cash from disposals requires approx £100m of disposals, given the LTV.

then you get into the cash flow issue they will face, when approx 1/3 of their leases expire each of the next 3 years. if they retain approx 70%, that's 10% of their properties vacant after year one alone, then the same issue in years 2 and 3. bet your bottom dollar that those tenants that stay will be able to extract long rent frees and free capex.

[rcturner2] 27/9/2023 14:03

Wishful thinking. Until the market sees how they refinance the loan they will be battered down.

[arbus5000] 27/9/2023 12:14

there are some good points raised here but i think the negatives are over-egged.

some comments refer to the sale of £100m of properties to repay loans worth £50m, whilst other comments refer to the prospect of buying back bonds @ yield of 10%.


i don't see how a £50mln bond, maturing next year has caused a £60mln fall in share price, given that there's a hefty £40mln cashpile sitting on the balance sheet. This bond was issued in 2018, so its maturity next year is hardly *news*

[apfindley] 27/9/2023 12:13

This is looking grave now.A few months ago you couldve put it down to smaller shareholder selling pressure and general sector and wider market downturn....things from which you'd expect a recovery from.The continued slide and volume shows that bigger positions are being sold and there's no appetite to take on the risk even at these levels which would've been considered a bargain a few months ago.The high dividend yield being an attraction, but diverts attention from what's really happening.I usually like to look into companies where Edison have done a writeup report as I feel theyre one of the more credible analysts out there, but this is one they've got wrong for a change.

[cc2014] 27/9/2023 12:12

It's clear from the trade flow that someone wants out. Who knows how many they've got.

Quite a change from a few years ago when RGL was being ramped to the moon at 80p.

[drectly] 27/9/2023 11:57

Probably time they just sold all the property, paid the loans and returned the cash to shareholders. In the shareholders interest but not senior management, so we know who is going to keep gaining.

[cc2014] 27/9/2023 11:41

There is no cash or at least imho no cash.

From memory. About 2/3rds of the cash is restricted, meaning it's being used to help along security and/or the interest rate on debt. Consider it like an offset mortgage if you like.

The other third will be likely half year end window dressing. the cash was there one day before half year end but is spent the next day.


If they had cash they've be buying back the retail bonds in the market now. Plainly they aren't.

[1silverp] 27/9/2023 11:25

Can someone explain why RGL receives no interest on their cash balance of approx £40m? Are they just moving the cash in at the end of the reporting period?

[dandigirl] 26/9/2023 16:30

Wc: Of course you are right re the ytm. Silly me. That's more like it and fits.
Thank you.

[rcturner2] 26/9/2023 14:16

Yes the existing bond holders know they are getting paid soon.

New bondholders are taking a whole new order of risk.

[williamcooper104] 26/9/2023 12:02

That's because the retail bond is time senior in that it's the first debt due, so won't be left holding the bag The YTM is around 10

[dandigirl] 26/9/2023 11:35

The bond is trading around plus/minus 95 which indicates a ytm of around 5%

if the repayment/refinancing risks are high, surely this would be trading lower?

thoughts, please.

[spectoacc] 26/9/2023 06:58

@fred177 - dilaps can be highly lucrative, and work well in the good times.

In the bad times (CVAs etc), dilaps don't get paid. The familiar double-whammy with REITs.

[williamcooper104] 25/9/2023 22:28

Yep I can see them getting 10-11 so long as lenders are comfortable that there's plenty of amortisation but then that doesn't really help RGLs cashflow it's just borrowing their lease certain income, which is I suspect why there's a focus on trying to sell assets As for their leverage not being too high If you are having to sell assets to deleverage in a down market then self evidently your leverage was too high