Schroder Real Estate Inv... Share Discussion Threads

[giltedge1] 06/6/2023 14:24

Have come back onboard at 44p, used to be my largest REIT, sold in 2022, luckily for a good price. Like the industrial portfolio of multi let units & new builds. More proactive than other REITS, rebuilds, build new units on vacant land, joint ventures with other Schroder funds. Great at fixing long term debt, so no worries on refinancing, must have made £20M on that, but not reflected in NAV, must be worth another 5p at least. Good luck for results on Thursday.

[nickrl] 03/6/2023 22:08

@mirandaj thx for posting "live" update on Stanley Green just need to get tenants!!

hxxps://stanleygreentradingestate.co.uk/

hopefully news at next week results as well as what the impact is when the hedge rolls off the RCF next month.

[mirandaj] 03/6/2023 17:14

Just a swift comment on Stanley Green Trading Estate for interest really. I am happy with the other holdings and hope that letting continues well with good percentage increases. They have chosen some very particular and popular places to be.

Obviously the results will tell all but, in the meantime, we had reason to drive over to Manchester Airport and I wanted to have a fleeting look from the A555. We didn't come off on to the A34 as I was happy with what I saw. The airport is only a few minutes away.

The new build seem to have a really high end finish and solar panels everywhere - all looks very high tech! The roads are tarmacadamed and the finish is excellent. The contractors have taken great care. I could not tell if all ready for letting but have no doubt they will have no trouble with them. Rents on the older properties will have been increasing as everywhere but being in such an advantageous position will draw in customers to the various unit.





(Still at a 28% + discount pre results on 8th.)

A little from Kepler's research - RNS dated 9th December 2022:

SREI’s high dividend yield looks attractive versus both peers and other asset classes, including equities, cash and gilts – particularly given how well covered it is. Investors buying now should receive a dividend yield of 7% on an ongoing basis. In addition, the reversionary potential of the portfolio is attractive at 6.6% (versus the benchmark’s 4.8%) and there is a pipeline of asset management opportunities to further grow income.

SREI trades on a very wide discount of 39% at the time of writing, meaning the valuation of the portfolio could fall by c. 25% and the shares would still be on a discount. We think this should give comfort to investors concerned that further falls to the capital value of the portfolio are likely in the coming quarters, given that property valuations come in with a lag. Of course, if interest rates peak lower and sooner than expected, then some of the pressure on pricing will be relieved, although there will still be the impact of a recession to assess.

Additionally, we think the balance sheet looks strong. The decision to fix long-term debt in late 2019 was well timed, and the low rate agreed of 2.5% is extremely attractive in the current environment. We note there is some refinancing risk through the RCF, the hedges on which have to be rolled in July 2023, although this is only 26% of the drawn-down debt. The cheap gearing could provide a tailwind behind the NAV when the recovery comes, and importantly there are very significant cushions over the covenants on the debt

[skyship] 18/5/2023 13:54

Alluring - I do agree; though won't be adding. One I did add today, reinvesting some of the cash raised from selling EBOX, is the one I consider to be the outstanding BEST BUY in the REIT sector - API.

API, a generalist like SREI, is now anomalously cheap at 49.4pXD - NAV discount at 40%; yield at 8.1%.

I would expect them to recover in the short-term back up to 55p for stats of 33.3% & 7.27%...

[gonsan] 18/5/2023 10:04

Added more today, on a whim. If we are close to peak interest rate hikes i assume things will only improve from here. Who knows. The divi is too alluring.

[nickrl] 23/4/2023 13:56

@sky those on qtrly valuations look like we wont see much change to NAVs other than driven by lease events or not. So its what they ahve got to say about their asset management will be a better indicator as to which way the market is going.

Should get the main wave next couple of weeks.

[skyship] 22/4/2023 12:59

Michael Morris, Chief Executive of Picton (PCTN) commented.

‘Our own independent valuation and the recent MSCI figures appear to indicate that the marked repricing seen at the end of last year has substantially run its course. In our portfolio increasing rents and rising rental values are having a positive valuation impact and offsetting some of the outward yield movement we have seen in recent months. Being able to improve occupancy and adapt our portfolio to changing market conditions is also encouraging.’

Their 1.2% fall suggests to me that the Q1 result for SREI could be pretty well flat - perhaps -0.5%. SREI has less office; more Retail Warehouse.

[flyer61] 26/3/2023 12:02

Know the site well. It is classic British, fairly cramped. In the photo across the A555 road on the left is a burnt down self storage facility and on the right is a not that old office building being demolished. The A555/A34 junction in the picture is a bit of a nightmare. However it leads off to lots of places including the airport.


Should rent....might pay a visit and see what's going on.

[mirandaj] 26/3/2023 11:44

nickrl - agreed if, for instance, these are still available:

[nickrl] 26/3/2023 11:25

@mirandaj indeed they've got some good assets just need them to get tenants for Stanley Green

[mirandaj] 26/3/2023 10:06

Certainly worth watching Nick Montgomery's videos if you have time - to reinforce...

[dodger777] 22/3/2023 16:59

Added a few more at just over 0.41. The lower it goes the bigger the divvy 😬 I’m in for the dividends and the longer haul so confident enough to keep adding when I think the price is right.

[chucko1] 21/3/2023 01:10

In that Morningstar article, the author cited some specific examples of what were extremely large losses for a short duration portfolio. In some cases, the losses are no more than mark to market where the portfolio contain more esoteric (their word, but absolutely right) securities, or where there are cliff-edge outcomes such as CDOs.

But here was no mention of what many ultra-short portfolios now contain, or how to go about inspecting the holdings which is a great shame, as there are perfectly decent enhancements to 30-day Bill (or equivalent) returns available with minuscule additional risk.

I can tell you that today's typical portfolio with cash, repos and CDs etc. would lose no more than 1.5% even if we saw 2008 financial credit spreads. Additionally, credit spreads on 1 year financials have widened by around 50% the past days and weeks, and yet the current crop of cash funds (ultra-short) have not been impacted.

Those yielding about 50bps more than SOFR or SONIA have an assortment of other things such as Gov Guaranteed, Supras and Sovs (for example Canadian BAs swapped into GBP), and so have a diversification which upon great market stress would be pretty solid.

So I would take some issue with the article in that it did not indicate the wide variety of funds available and the differences between them as they try to add a few extra basis points of yield. This is essential, as you want to be fully aware what is earning that extra yield.

[spectoacc] 20/3/2023 17:37

Thanks @orinocor, interesting read. Guess the flipside is that even after the collapse in the financial system of 2008, most didn't lose much & soon recovered. But definitely some short-term dips possible, & perhaps necessary to know what they actually hold.

[skyship] 20/3/2023 17:05

Bizarre under-valuation.

Well managed and best B/s in the sector; yet discount again widening out to 32.3% and the yield up to 7.8%.

Would add; but already just over my max allocation of 10%.

[orinocor] 20/3/2023 16:32

beware ultra short bonds. Not as safe as you may think
hxxps://www.morningstar.com/articles/1143674/why-ultrashort-bond-funds-arent-cash-substitutes

[hpcg] 20/3/2023 16:24

Dipped a toe in today. Just a toe. I can see it outperforming cash, and even ultra short bonds over 6 months, with potential for a volatility kicker. The Truss lows are a pretty good support level, but the trend on the chart, yikes.

[mirandaj] 16/3/2023 12:33

A reminder of investor presentation 3rd February if wanted.

[my retirement fund] 14/3/2023 20:48

I was pleased to add a few today below 44p bargain

[spectoacc] 12/3/2023 08:32

Any size involved an extra 1.5p on the offer for me, which would have meant presumably an extra 1.5p off the bid when selling. Not a spread that appeals.

[chucko1] 11/3/2023 09:16

Strange - I had no problem buying or selling (had I wished) all day. Was a wide spread in the AM.

[wllmherk] 10/3/2023 20:40

I'm with Halifax and also had to place an order, filled at just under 44p with costs, I'm happy with that. Got them in my ISA so hoping they stay at this level for a few weeks so I can add a few more with my ISA allowance,

wllm :)

[frazboy] 10/3/2023 19:09

Manage to add 15,000 with ii. Had no issue getting quotes, liquidity aplenty. Perhaps it was just an issue at certain times. Odd.

[spittingbarrel] 10/3/2023 17:23

I topped up with another 20,000 this afternoon at 43.35 through AJ Bell, you just have to place an order and hope. With the way gilts were on fire across the curve today I'm surprised any of the solid dividend payers got hit at all.