Regional Reit Share Discussion Threads

[mridyard] 20/5/2019 09:49

Extract from Annual Report;Increased investment has been underpinned by strong occupier fundamentals in boththe office and industrial markets, with both markets witnessing record levels of up-take in 2018. Overseas investment in the UK property markets accounted for almost half (49%) of total investment in 2018, according to data from CoStar2. Despite ongoing uncertainty surrounding Brexit, overseas investors continued to take advantage of favourable exchange rates, with investment in the final quarter of 2018 reaching £8.1 billion, 16% higher than the five-year average.

[skyship] 20/5/2019 09:37

LG - Good point. Question is to which sector will they allocate any cash raised?

# They've been selling Industrial; and those made were by all accounts well-timed

# Retail - presumably still a "no-no" - or might they go contrarian

# Offices - they are already at 76% allocation

# Warehouse - could be a little late to enter that sector...

[lord gnome] 20/5/2019 08:55

My best guess is that they could easily double in size and then some without sacrificing portfolio quality. The market cap is still only £400 millions. Think how large the regional property market must be and how underinvested it is. Rich pickings and RGL are only scratching the surface.

[chucko1] 19/5/2019 15:47

FBloggs, I agree that your question is a key one. Most here would concur the management have run the current portfolio and developed it very well. So, if it ain’t broke, don’t fix it. Especially considering the annualised returns enjoyed so far. I would love to buy bonds like that in today’s yield environment!

But PHP, for one, has constantly raised capital and an investor would have earned 11.5% annualised over 22 years. No dividend cuts ever. That is what can be done if you are patient with quality management whose interests are aligned with ours. Are they? No evidence to suggest otherwise.

[frederickbloggs] 19/5/2019 13:04

Does anyone here think that at it's present size, the RGL portfolio might be something of a sweet spot in terms of management?Am I being too down beat if I think RGL might grow its portfolio to the extent that the quality of its assets and the management of those assets will deteriorate?Presently, I think RGL is a really well run property company with a clearly defined style all of its own. But there must be a finite size it can grow to before quality suffers on all counts?Thanks.

[neilyb675] 19/5/2019 09:34

Is it definitely an OO element to the fundraising ?

If so what price is the question.

[lord gnome] 19/5/2019 08:21

I'm staying with it. I can't think of a safer home for my money. I will look to add a few more, having missed out on the dive to 90p. Hopefully this new fundraising will present the opportunity.

[davr0s] 18/5/2019 19:58

Yep a lot of people seem to be bailing out of some of their holdings yesterday and we close -0.2%. I'd consider adding as I want to add to holdings breaking higher

[chucko1] 18/5/2019 18:43

Every REIT issue new capital. If you squander it, that’s a problem. But the issue of capital in of itself is what I expect management to do and the best REITs out there do just that. PCA messed it up, but that has no bearing on RGL (or any of the others, for that matter).

[skyship] 18/5/2019 17:52

chucko1 - "You can’t equate a new share issue with dilution when considering a REIT"

Sorry, but I have to say you've got that 100% wrong.

Go take a look at what happened to PCA back in Sept'17. Shareholders have never forgiven them.....sp now down 24% on the pre-dilution figure. CEO even admitted the dilution saying it was right for the long-term.

Of course we may see no dilution and no pre-emption; but whilst there is the risk of such, I'll stay on the sidelines after what has been a really good investment these past 18months or so.

[chucko1] 17/5/2019 19:04

You can’t equate a new share issue with dilution when considering a REIT. The proceeds merely increase the asset base, but share fixed costs and semi-fixed costs over a wider amount of capital.

The point was also made that the managers would be likely to enjoy higher bonuses as a result of a bigger REIT. Exactly - and I wish them good luck in just that. Because the likelihood is that all the shareholders will also become slightly wealthier too. You certainly don’t want the opposite - AEWL - too small to offer value to anyone and consequently too risky (as proved to be the case, although an interesting spec play now).

I bought back a half of what I sold earlier this week (a fifth of my holding owing to the speed of the share price rise - no other reason), the rest and more to be picked up upon the offer, which I deem very likely to occur. share price is now 108.4p with NAV probably 116-7p. They’re still cheap, and the only remaining question is whether to buy them in the market or within the offer terms.

[skyship] 17/5/2019 16:28

nimbo - as I posted earlier, for good or ill I decided to bank 2/3rds of my RGL holding (@108.3p average) as I fear some dilution. Last week I also banked a good profit in AEWU; though subsequently have decided I should have held on.

You were asking where else to go in the sector; now I find myself asking the same question.

Well, I have today bought back into a few ARTL @ 152p; and also made a small top-up in my remaining large REIT holding - Highcroft (HCFT) - in spite of the spread.

The 25.4% NAV discount and 5.83% yield for the very conservative REIT offers the best value at the moment IMO; especially as a recent couple of acquisitions should ensure a further dividend rise this year. Strongly recommend a browse through their website:

[nimbo1] 17/5/2019 14:49

you'll be able to buy them back for 108.2 if you are quick. : )

[badtime] 17/5/2019 14:21

At a comfortable level so I don't intend to sell any currently

[spob] 17/5/2019 13:46

sold all mine earlier @ 108

[nimbo1] 17/5/2019 13:40

well done to all who managed to trade the rns this morning, you called it right although i think much has to do with yet more infuriatingly inept actions by politicians.

[a0002577] 17/5/2019 10:54

On second thoughts - they should have a rights issue then everyone is treated fairly. If they were to organise one like the UU.A issue (nearly 20 years ago) it could be most interesting..

[hpcg] 17/5/2019 10:29

Price action is instructive. It wouldn't surprise me if they were approached - no way could a large investor get a stake of any size without moving the price against. Just right now TFIF are doing a raise above both the share price and the NAV. My best guess would be at the current price.

[nimbo1] 17/5/2019 09:49

Personally I think it will be above current share price but below nav. Insti's will already know the price. Time will tell. In the interest of full disclosure, like everyone else I am talking my own book. This is my joint largest reit holding.

[skyship] 17/5/2019 09:41

Indeed - I kept a third back so as to participate if, as they should, they attach a general offer.

[mridyard] 17/5/2019 09:21

Your quite right skyship I hope it is open to retail investors as it will be at a discount to NAV.

[skyship] 17/5/2019 09:18

mridyard - "...announces that it is considering an equity fundraise..."

[mridyard] 17/5/2019 09:12

I have also sold 2/3 my holding before the announcement as I was overweight with RGL having filled my boots at recent lows. IMO RGL has a cracking management team who are really delivering for investors. The growth rate in earnings has been excellent since IPO in what has been a very difficult operating environment. They may well raise the funds through a bond issue as last time.

[davr0s] 17/5/2019 09:11

All this speculation. Who knows, let's just wait and see

[a0002577] 17/5/2019 09:07

The most sensible way to raise new money is via a "C" share issue. The two classes can then be merged at a later date. But why would any one buy into it?