Schroder Real Estate Inv... Share Discussion Threads

[essentialinvestor] 15/6/2020 12:30

Listened to the webcast, just takes a few seconds to register.

Their view on another 10% fall looks too optimistic to me, let's see.

To be fair Duncan mentiones a possible 20-25% fall on retail assets.

[colonel a] 15/6/2020 09:01

That's not how I read it.
They give lease durations on the new lets, five of eight.
But not for the reviews, which being pedantic is not news {new data}.

[nickrl] 15/6/2020 08:50

SREI have managed to get a few lettings done since 31/3/20 that are beneficial to NRI. They give great detail on the occupier and rental terms agreed vs previous but nought on lease duration which is disappointing.

[essentialinvestor] 12/6/2020 13:51

Mentioned elsewhere the most significant risk to wider equity markets
is perhaps a large COVID second wave. Although we would be unlikely to see the
widescale lockdown just experienced, it would be very detrimental to
consumer confidence and risk appetite, investor sentiment.

[skyship] 12/6/2020 13:48

EI - Unlike you to play fast and loose with stats!

Actually BLND have written down their total retail by 33% over the past 3yrs...

The sub-sector of Retail Parks may have been written down by less.

[llef] 12/6/2020 12:58

no problem - fingers crossed that COVID does not roar back and make a mockery of his forecasts :-)

[essentialinvestor] 12/6/2020 12:25

Thanks for the view.

[llef] 12/6/2020 12:09

EI - looking at the results, SREI have 24.6% in retail.

My friend's view is that not all retail is in the same boat.
Shopping centres are definitely suffering, esp 2nd tier shopping centres, but retail warehouses, and retail let to food retailers etc is not doing so badly.

SREI make a point in their results that they have no shopping centre exposure

"The retail assets in the portfolio are predominantly well-managed
retail warehouses and convenience retail mostly part of investments which have
multiple uses such as offices and hotels, let at sustainable rents and which
benefit from trends including 'click and collect'. The Company does not own any
shopping centres. "

[essentialinvestor] 12/6/2020 11:59

BLAND have written down the value of their regional retail parks by 60%
over the last 3 years? - if that's incorrect I'm sure someone will let me know.


SREI have over 30% in retail or mixed retail, so on those assets there
may be scope for a significant valuation decline?

Or is this too rudimental a view?.

[llef] 12/6/2020 10:30

just further to his comments, he likes the portfolio split of retail/office/industrial, (would prefer less retail but then that would be reflected in the price), thinks they are in good cities for growth, ("winning cities" in fact :-)) and thinks its one of the best valued REITS out there.
So he has bought some shares this morning, and so have I.

If we get a further lockdown however, then its going to suffer like all other REITs...

[skinny] 12/6/2020 08:42

Llef - thanks for that.

CWA1 - Not being pedantic, but it was 1,861.82 points.

[cwa1] 12/6/2020 07:53

TBF we did have a 1000+ points drop on the Yank markets, so not much was going upwards!

[nickrl] 11/6/2020 20:44

llef mr market was clearly listening to your forecaster today pushing down share price again! Despair on this one which just can't get any traction but at least none of the big holders have shifted position so gives me some confidence to stick.

[essentialinvestor] 11/6/2020 17:54

Thanks for that.

My guessestimating is in to the mid 40's. Tbf I'm often too cautious,
your friend may be much nearer the mark.

[llef] 11/6/2020 15:16

fwiw, a commercial property forecaster i know has looked at SREI, and reckons that its capital values will drop around 12% this year, 3% next. (bigger declines in retail offset by smaller ones in offices & industrials).
Gearing will add an extra 2-3% to the decline.
So he reckons NAV should bottom out at 50-52p (depending on how much income they pay out).



cheers

[skinny] 10/6/2020 13:45

Thanks for the link!

I quite liked the 'smoking dope' analogy.

[spectoacc] 10/6/2020 13:45

Auctions very lively, either due to online and everyone sat at home, or a slight lack of stock, or...everyone spending their Bounce Back Loans :)

Agree it's recession, unemployment, acceleration of High St trends ahead. Can see warehouse/last mile/big box/industrial mostly doing well, but resi/office/retail shed/High St surely all going to be "interesting".

Not currently in SREI - hardly expensive, but want it cheap.

[essentialinvestor] 10/6/2020 13:40

Spec, thanks for the heads up with that.

10% looks a very modest amount. Only 10% to fall on The Galaxy Luton!.
It only represents a small % of their portfolio tbf.

Konrad who posts on the SHB board and is a valuer reckons around 25% to
come off - that was his guessestimate on London property, from memory.

[spectoacc] 10/6/2020 13:30

A good CityWire piece on it:

[essentialinvestor] 09/6/2020 16:57

Hi Nick, it's a liquidity surge chasing finite assets atm.
Would still expect some volatility along the way.
As mentioned previously I think SREI is at the very least worth watching.
If they can buy half as well as they sold it's particularly interesting.

On flex space Mark Dixon put in £92 million to the recent IWG equity raise,
so I'm guessing he does not see the sky falling in. CapCo taking that SHB stake may also be worth noting.

[nickrl] 09/6/2020 16:42

Essential they said that on analysts briefing earlier reckoned prices are too toppy still and wouldn't see value til later in the year when the distressed sellers are shaken out. Trouble is there so much dosh sloshing about im beginning to doubt my own wait and see approach as perhaps looking a tad foolish now. It really looks as though Western Govts will kitchen sink this and probably they can limit the inflationary impact given the last 10 years has shown a delinking of the impacts of cheap money.

Trouble is SREI on a 50% divi (at best) is sitting around 3.5% yield which may look pricey to others now but even that depends on whether there tenants stay on there March positions or will more of them change positions especially if govt extend rent moratorium action.

[essentialinvestor] 09/6/2020 14:58

Would not expect to see them rush to buy, unless something exceptional presents
itself short term.

[nickrl] 09/6/2020 14:44

I like the way they hark on about winning cities underpinning the portfolios reversionary ERV at the front end before going on to say the risks C19 imposes.

Divi held back currently, rather than cancelled, pending rent collection levels in June/Sept qtr. Rental collection is 74% qtr to date but they did usefully include in presentation an indication how this would impact on FCF going forward if not improved (at least 50% drop would be needed). They also reveal that of uncollected rent they have sorted a plan for 3/4 of it but a 1/4 are tenants not yet playing ball (JD Sports potentially?)and they will go after them when allowed to. Note the NAV was adversely affected by the refinancing rather than property write downs. these were +1.9% although there retail adj of -7.7% seems light compared to others. They have low debt metrics that are all adequately covered as a result of refinancing last year will probably be able to cover half the dividend this year unlike othes yet they continue to be burnt by Mr Market.

[spectoacc] 09/6/2020 14:30

If they buy wisely ;) But yes - great timing with disposals, bringing gearing down to a sensible level.

Most of the property REITs learned from decade ago - sensibly geared.

Fewer forced sellers, but the Unit Trusts can take up that role.

[essentialinvestor] 09/6/2020 14:23

The disposals last year were in hindsight Inspired.

If asset values continue to fall this year, which in today's statement it
states they 'expect', it arguably plays right in to their hands.

With financing in place and cash to invest, falling values are to be welcomed.
If SREI navigate this well (and in selling heavily last year it's a great start)
significant long term value can arguably be created over the next 3 years plus.