Schroder Real Estate Inv... Share Discussion Threads

[spectoacc] 10/12/2020 15:33

Missed that, thanks.

[skyship] 10/12/2020 15:28

Buybacks again yesterday:

09/12: 400k Bought at 37.4p. (Highest price paid 37.9p)

[essentialinvestor] 07/12/2020 15:09

Nick, CLS acquiring assets again.

[nickrl] 06/12/2020 21:32

EI thing is initially the conditions were ripe for values to fall but govt largess on furlough and other support mechanisms facilitated by BoE QE has significantly suppressed the decline in economic activity that conventionally would have been expected.

The question is have they only delayed the inevitable or not? Ive no real idea but something i was slow to react to was lenders being lenient on covenants and i now believe short of a business in dire straits they will continue to do so as long as interest can be paid. So i now can see this as a key prop under asset prices for the short to medium term.

Hopefully BREXIT uncertainty will give a bit of run back this week so I can pick up a few here.

[essentialinvestor] 06/12/2020 15:06

Ken, in terms of buy backs for SREI, they built up a huge watchest

of cash and asset prices did not fall by the % many expected.

That's what I think has happened, although would expect to see some acquisitions ultimately.


The SREI share price was hammered, but without a corresponding

% fall in real world property values.

[frazboy] 03/12/2020 17:36

58. Half the initial tranche of the buy backs were completed after the end of the last reporting period but this has been offset by the dividend payment.

[chucko1] 03/12/2020 17:31

But what's the current NAV? 56p or so?

[skyship] 03/12/2020 17:10

So, they've resumed the buybacks - one can imagine the discussions about when and at what level. Sadly they missed the cheap stock...

03/12 - 465k @ 37.25p (highest price 37.90p)

[kenmitch] 02/12/2020 16:05

SKYSHIP.

I agree that it’s pointless spending long arguing for or against buybacks, as (a bit like with Brexit) minds are made up, and are almost impossible to sway.

But I can’t resist replying to your “just the one case” comment. There are so many similar examples. Look at what happened to Investment Trust share prices and discounts at the time of the March market crash. The many Trusts who had bought back often saw their share prices hammered. The buybacks provided no support with those buying back seeing similar or worse falls than Trusts that hadn’t. And it was the same with shares. US Companies had bought back on a scale like never before ahead of the crash, and yet the US market saw one of the biggest and fastest crashes ever.

[skyship] 02/12/2020 14:43

Ken - I won't take up more time debating the relevance of buybacks. I would say that your 1 & 2 above are one and the same; and exemplified by just the one case.

Then; of course the shares rise when supported and drift when not - but the current buybacks are only 20% into the permitted programme - so need to wait awhile.

Personally I'm surprised that we haven't seen a resumption since the Interims - especially seeing the volume late on Monday...looks like a missed opportunity.

[hindsight] 02/12/2020 14:35

Brought a few at 37.05, Im not exactly sure why did though

[kenmitch] 30/11/2020 17:28

SKYSHIP.

I take your point and the same point made by others that there are few bargains available for Trusts like SREI at present.

But whenever I post on buybacks there are almost no direct replies or counter points to the evidence I provide to back up my negative view of them.

e.g SERE far far better share price performance despite not buying back than SREI who have bought back.

e.g that shares and Trusts buying back often underperform shares and Trusts in the same sector who didn’t buy back. SERE vSREI is yet another such example.

e.g Trusts buying back often see the discount narrow and the share price rise a bit while they are buying back, only as has happened with SREI, for the share price to drop back when they stop.

[skyship] 30/11/2020 17:00

Ken - no problem disagreeing over buybacks; but just glad the Board agree with me over that one. Exceptional times, exceptional discount - so acted accordingly under the annually approved 15% Buyback Scheme.

Sphere - a good spot. If we picked up those then that one trade would cost £3.57m and add £2.1m to the Net Assets (0.42p/share!). Obviously no property acquisition is going to produce that instant return.

[flyer61] 30/11/2020 16:49

Well lets hope that is why they were waiting to buy back. A buyback of that amount at 36.4P would be good news! Cannot imagine the MM's would want to hold that many shares for long. Waiting for the RNS....

[sphere25] 30/11/2020 16:38

MSCI dump confirmed in auction with an exchange of 9.8m @36.4p

[kenmitch] 30/11/2020 16:29

SREI share price is up today despite no current support from buybacks. Isn’t it possible for Investment Trust REIT share price discounts to NAV to reduce without buybacks? e.g if investors decide a REIT looks good value as SREI certainly does. SREI has significantly underperformed others I hold like SERE who have not afaiaa bought back recently. What’s more SERE increased their dividend.

Much as I respect Skyship for his excellent posts and correct calls I just can’t fathom his absolute certainty about SREI buybacks being a no brainer. As with so many contrary views the points for and against are finely balanced yet people post with absolute certainty. Brexit was a classic example of this. Views were far too polarised on both sides of the argument.

[skyship] 30/11/2020 14:24

Specto - quite right - we see share prices down 20%/30%/40%; but we certainly don't see property valuations down anywhere near that - as recent acquisitions attest. 5%/10% at most. So really buybacks a bit of a no-brainer, especially for propcos with cash on their B/S.

Happily SREI see the logic in that.

[hindsight] 30/11/2020 10:56

Buybacks at these discounts look best investment to me, cant see much good commercial at -30%. And small REITs should be merging to reduce overheads going forward, but that turkeys voting for xmas.

[brwo349] 30/11/2020 10:55

Quite right kenmitch. The company should not be buying back shares just so short term traders can make a profit.

[flyer61] 30/11/2020 10:50

Yep the number one worry here is they are not going to find any bargains and just buy come what may. Keeps the fees up. Buybacks please.

[chucko1] 30/11/2020 10:46

The maths alone is persuasive - a 35% discount to NAV is worth 4.4% per annum over 10 years. If you can buy property in this market at a 4.4% yield "addition", then fine - but there is no evidence that you can. Not reasonable stuff, at any rate.

If we were talking about 1.00% per annum rather than 4.4%, then that is a different matter. But we are not.

[spectoacc] 30/11/2020 10:34

@kenmitch - agreed, but how many bargains have there been? Thought we'd get some with the UTs forced to sell, but not really seen any. There's a few REITs been buyers, but at yields generally similar to pre-Covid. And those who've sold have got good prices - few at any meaningful discount to NAV, some at a premium.

So I'm for buybacks - on the logic SREI's NAV isn't far out, and the discount they're buying the shares at is well beyond the discount on any property they could buy.

[kenmitch] 30/11/2020 10:26

I would much rather SREI invest spare cash on bargain priced acquisitions than spend it on buybacks. For traders buybacks might appeal, but for longer term investors what matters is not the share price and NAV next week or month, but longer term. Shrewd buys now from distressed sellers could work wonders for the SREI share price in time, along with possible dividend increases.And that way SREI could outperform too.

[spectoacc] 30/11/2020 09:12

Interesting - so SLI saying where they think the floor is. Could SREI have spotted an acquisition instead of buy-back I wonder? Or waiting on EU deal/no deal?