Regional Reit Share Discussion Threads

[fenners66] 11/12/2017 13:03

pete - I see dilutions when say resource exploration companies who have never found anything , or sold anything let alone come anywhere near to making a profit ; offer more shares to mug punters at ever lower prices to pile on the misery.
Where you have money making assets , purchased with the new funds raised the only dilution is the element of the funds raised that are used for costs.
However we might see the costs for running the asset base spread further thus giving some of this back over time.

[skyship] 11/12/2017 10:29

A proxy bond paying 7.8% on the recent Edison f/c of a total dividend of 7.85p (7.65p) makes RGL a seriously attractive income stock, with the prospect of some capital gain thrown in as regional revaluations flow through.

The ship appears to have steadied since that drop to just under the 101p issue price; so I will seek another top-up in the public offer.

[lord gnome] 08/12/2017 11:07

I don't see it as a dilution, Peter. This is an asset-backed stock and will remain so. What matters is the nav per share and the income per share. In theory, an enlargement of the company should be positive in that we will be backed by a bigger and more-stable entity. Unless the bottom falls out of the markets - both stock and property - then I don't see this dropping back much under 100p. If however, there is a market correction (read panic) then anything is possible.

[petersinthemarket] 08/12/2017 10:27

Any opinions on the final share price outcome in early 2018? The 101p offer price probably underlines things for now but can we expect an share price fall to 70/80p next yr or will the mkt suck it up and protect the share price. This is one heck of a dilution. All thoughts welcome.

[speedsgh] 08/12/2017 10:23

£50m already conditionally raised in the firm placing. Whilst investors appetite may be waning in the face of so many new issues in the sector, I do not see RGL having a problem raising the £15m required to meet their minimum £65m target in order for the fundraising to go ahead. They are targeting £100m total with option to increase this by 25% if there is sufficient demand. I would be a bit surprise is there was sufficient demand to justify an increase above the £100m target but I've been wrong plenty of times before.

[lord gnome] 08/12/2017 09:24

I think there must be some danger that the market response to the offer of yet more stock could be muted. There have been several launches of me-to funds aimed at the high-yield regional property sector and the market is now stuffed with them. This has led to some stock offers receiving poor responses. Every man and his dog seems to be using property funds to drive income. It's not yet a bubble as regional property values remain stubbornly stable and yields on current deals still offer 7-8%, but if we do anything like a decent Brexit deal and the economic prospects look good, then it could become very interesting.

[eltox] 08/12/2017 08:34

I haven't read the prospectus in detail but saw that the fund raising is conditional on raising at least £65m. £50m is in the bag already but if the price drifts any more there must be a danger of very limited take up of the new offer. Any thoughts on the impact of this?

[fenners66] 08/12/2017 08:33

So we have a proxy bond paying 7%.... ok then

[sleepy] 07/12/2017 23:01

Having had a quick look at their half year results is at least part of the reason why the NAV has not increased that they pay out more in dividends than their property income excluding the increase in property values?

[speedsgh] 07/12/2017 21:44

Yes, whilst RGL have paid out 14.05p in dividends (before accounting for REIT withholding tax), the NAV & share price have really made no progress which is pretty disappointing.

NAV per share
107.30p as at 30/6/17
106.90p as at 31/12/16
108.00p as at 30/6/16
107.80p as at 31/12/15

[sleepy] 07/12/2017 21:38

Interesting read on UK property. I’m not suggesting SLI shares are good value

[sleepy] 07/12/2017 21:32

This has been quoted for 2 years now. Shareholders have had dividends but regional property markets are up 10-20%. How much have share price and NAV risen?

[alan@bj] 07/12/2017 17:42

Good point though, Solarno

[solarno lopez] 07/12/2017 17:04

well done Skyship

[skyship] 07/12/2017 16:56

Dealing costs!!! Bought at that 1.00897p & in my case just £4.95 for any size transaction; though + £1 for over £10k.

Really good thing of course - No Stamp Duty.

[solarno lopez] 07/12/2017 16:42

you forgot dealing costs !

[eltox] 07/12/2017 16:32

Just checked the buy price and was given 1.00897 so right now the 1 to 8 open offer allocation is of no benefit to existing holders...

[skyship] 07/12/2017 16:26

There was the info in my InBox...

Haven't subscribed for entitlement or excess as have just bought slightly below 101p in the Market!

[skyship] 07/12/2017 15:33

Likewise - entitlement added to my YouInvest SIPP, but no note through yet for instructions.

[stewart64] 07/12/2017 14:39

Thanks.....don't think I will bother adding it's at 101.

[alan@bj] 07/12/2017 14:27

No, that's your 1 for 8 entitlement in the Open Offer, at 101p per share. My HL account is showing 1250. I haven't had anything from them yet though, requesting my instructions.

[stewart64] 07/12/2017 14:13

I've got 912 bonus shares showing on my Hargreaves account, listed separately, of indeterminate value; roughly one eighth of my holding. A glitch, or are we getting additional rights for free ?

[speedsgh] 06/12/2017 12:35

New Edison research note...

Significant proposed growth and funding -

[speedsgh] 06/12/2017 12:11

From pg65 of the Prospectus pdf...

4.1 Financial effects [of the Capital Raising]
Upon Admission, assuming Gross Capital Raising Proceeds of £100 million, the Enlarged Share Capital of the Company will be 399,553,808 Ordinary Shares. This includes 300,543,908 Existing Ordinary Shares, and up to 99,009,900 New Ordinary Shares to be issued pursuant to the Firm Placing, Placing, Open Offer and Offer for Subscription. On this basis, the Open Offer Shares will represent approximately 9.40 per cent. of the Enlarged Issued Share Capital (assuming full take-up of the Open Offer).

Following the issue of New Ordinary Shares to be allotted and issued pursuant to the Capital Raising, Qualifying Shareholders who take up their full Open Offer Entitlements will suffer a dilution of 15.4 per cent. to their interests in the Company (assuming Gross Capital Raising Proceeds of £100 million).

Qualifying Shareholders who do not take up any offer of their Open Offer Entitlements will suffer a dilution of 24.8 per cent. to their interests in the Company (again, assuming Gross Capital Raising Proceeds of £100 million.

The percentage of the Company’s issued share capital that the Existing Ordinary Shares represent will be reduced by 24.8 per cent. to 75.2 per cent. as a result of the Capital Raising (again, assuming Gross Capital Raising Proceeds of £100 million).

[speedsgh] 06/12/2017 11:55

From pg65 of the Prospectus pdf...

4.2 Effects of the Acquisitions
The Company estimates that the First New Portfolio Acquisition and the Second New Portfolio Acquisition will generate a net initial yield of 8.6 per cent. (based on acquisition costs of 2.6 per cent.) and a reversionary yield of 10.2 per cent.