They bt in another 256,400 @ 66p last week; taking the total up to 770,000 so far.
Buy-in price sticking at 66p for the time-being... |
 Thnx to stolenscone who posted this on the ASLI thread:
------------------------------------------------------
From Greenstreet News:
Logistics sector drives "significant" yield compression
Eleven logistics markets reported an inward shift in prime yields in Q4, according to Cushman & Wakefield
Twenty-four market sectors reported an inward shift in prime yields in the fourth quarter of 2024, double the number for the third quarter, driven by the logistics sector, according to new research from Cushman & Wakefield shared exclusively with Green Street News.
Eleven logistics markets reported an inward shift quarter on quarter, followed by offices (eight markets) and high street retail (five markets), according to Cushman’s latest DNA of Real Estate report.
Looking at regions, Southern and Central European markets recorded the biggest inward movements, with office yields in Southern Europe moving in by 10 basis points, driven by strong performance in Spain. Prime logistics and high street retail yields in Southern Europe moved -8bps and -5bps, respectively. In Central Europe, office and high street retail yields both moved by -5bps, while logistics moved by -4bps.
Office yields moved by -6bps in Sweden and Norway. |
Re buybacks - I have no objection because of the size of the discount to NAV but you do wonder whether whether IT as a whole sell low and buy high in the property sector. I am eventually looking to exit this position. |
Good to see a post from you here Perfect Choice. Though I dislike buybacks there are examples of them being used effectively. E.g Next. But against that there are many more examples where the sound theory in favour of them didn’t work. That particularly applies to many of the Investment Trusts that bought back heavily and wanted money that could have been used for investments. |
That’s the theory William….that’s been posted multiple times, but what are your thoughts on the facts covered in posts 333 and 335? |
It works if you are buying back from free cashflowUsually there's none of that post the regular divi So when a reit buys back it usually is increasing leverage which increases its cost of equity negating the benefits of the buy back If you've got no or very low debt then it really ought to work over time and against an unknown hypothetical of what would have happened if you hadn't bought back Though the maths are pretty clear - if you've no debt and you sell assets at say 6 and buy and then you are increasing your earnings so long as your divi yield is greater than the yield you've sold at |
Can we estimate the debt transferred ( effectively the sale price) ? , I make it around euro10m give or take. |
So finally got rid of the Seville shopping centre and its debt (so off the books) reducing LTV to 21% with a further reduction to 19% also on the way. Think that makes SERE the lowest LTV REIT I own.
Also hello to Kenmitch (from old times on other BB) and yes I struggle to see the value of share buybacks but plenty of ITs doing that right now. But I cannot recall any company doing buybacks who could claim they increased the share price to nearer NAV. In principle sounds right, in practice very rarely works! |
They bt in another 198,500 @ 66p last week; taking the total up to 511,600 so far.
Buy-in price sticking at 66p for the time-being... |
dont use common sense lad, its forbidden with this travelling circus. |
RCTURNER - if your share is trading at a discount, you know the assets real value, such that you make your investors a profit - why not buy back your own shares if its the best risk adjusted invesment you know.
To me its one of the best possible uses of shareholder funds. |
Kepler research report, FWIWhTTps://www.trustintelligence.co.uk/investor/articles/features-investor-schroder-european-real-estate-investment-trust-demonstrating-resilience-with-distinction-retail-jan-2025 |
SKYSHIP.
I hadn’t realised that you were basically agreeing and so that I had misinterpreted your post. Thanks for explaining that.
As for SERE and SO many others (including WHR which I recently bought for the first time) and SUPR, bouncing today from an all time low, they look way oversold, and at these prices a great income yield while we wait for the upside. Interest rate cuts should do the trick, while of those I hold WHR and SERE look good targets for bidders or some form of positive corporate action. |
£1.25-£1.30 will get SHED, I previously assumed £1.25-£1.35.
LMP as a bidder - all idle speculation only on my part.
Institutional investors get increased liquidity as a result. |
AFAIUI while both AEWU & LMP are registered as REITs for tax purposes, they belong to 2 different chapters of the FCA's listing rules. LMP belong to Chapter 6 and is classified as a REIT trading company (similar to SGRO & PCTN) whereas AEWU belongs to Chapter 15 for REITs that are closed-ended funds. Chapter 15 requires oversight of the manager and for the board of directors to be independent from the manager. LMP therefore does not feature on the AIC website which only features closed-ended investment trusts. |
I never understand investment trusts buying back their shares.
Investors have literally given them their money to invest according to the mandate of the trust.
Any IT with excess cash should invest it in more assets. |
Add in Friday's purchase of 61,700 @ 66p and the total last week was 313,100 at an average of 65.4p. |
LMP discount the lowest at 5.9% v. AEWU at 10.1%.
No buybacks there either. |
airbus5000
The discount might have been higher or lower.Who knows? Wiser use of that £125 million might have seen a smaller discount than the current 15.7%.
AEWU is by far the best performer of the Commercial Property Trusts I bought in 2020. Unlike the others they haven’t bought back any shares. And the AEWU discount is by a long way the lowest in the entire UK Commercial Property sector! So MUCH lower than Trusts buying back. This AIC link shows them all:- |
what would their discount be if there were no buy-backs? 25-40% at least.... |
I forgot to include this bit from the Kepler comment after SEQI’s most recent results:-
“The board has continued to implement one of the largest buybacks in the listed fund sector, commenced back in July 2022, spending £39.5m to repurchase 49.3 million shares over the period. These contributed 0.47p to NAV per share. The board states it will continue these buybacks to support share price and reduce discount levels, factoring in the underlying liquidity of the portfolio, dividend cover and portfolio diversification needs amongst other considerations.̶1;
So almost £40 million spent on buybacks contributed just 0.47p to NAV per share. So the total £125 million wasted on their buybacks presumably added a tiny 1.5p to NAV. A lot of money to spend for minimal effect on the NAV isn’t it? Note too how the board “will continue these buybacks to support share price and reduce discount levels,” despite the discount widening from 6% to 15.7% and these buybacks achieving the opposite of their intention. |
In the first week of buybacks they've bought in 251,400 shares at a cost of £164,055. An average price paid of 65.26p. |
SERE Share buybacks will be a waste of money as Trusts are finding out the hard way.
There is a classic example of the money wasted on buybacks in Investors Chronicle this week. It’s SEQI (SEQUOIA ECONOMIC INFRASTRUCTURE INCOME TRUST).
They’ve spent £125 million buying back 10% of their shares in by far the biggest buyback in the sector. The discount to NAV was 6% when they started buying back. It has now widened to 15.7%. So much for buybacks helping to narrow the discount!
A Manager is quoted saying “We could double the buybacks and it wouldn’t change things. They just show we are confident in the business.” What’s the point then of continuing with their buybacks even now while admitting that they haven’t been effective so far despite £125 million being spent on them?
So they’ve spent £125 million to achieve what??????? This is what they’ve achieved with that waste of money. A discount doubling instead of reducing and the other achievement apparently is to show their confidence in the business. That’s a very expensive way of doing that. AND big buybacks are shrinking these Trusts and reducing the capital base and making them more illiquid.
Some Trusts are getting the message at last and bemoaning that their buybacks hadn’t worked as hoped. When will more commentators and bb posters get the message too? |
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