Schroder Real Estate Inv... Share Discussion Threads

[riverman77] 24/6/2022 07:58

Added too. As well as being fixed, their debt is also long term (I believe around 10y and the longest amongst its peers). Long term, fixed debt is exactly what you want in an inflationary environment as it gets eroded in real terms.

[ec2] 24/6/2022 07:51

Topped up today 50.31p. Their very low fixed borrowing costs (lowest in the sector) are very much a positive for me along with the 34% NAV discount.

[shieldbug] 23/6/2022 16:17

I added a few. Crazy. Could drop further. Everything could drop further.

[my retirement fund] 23/6/2022 15:16

Yes I've had a few too

[skyship] 23/6/2022 14:55

Went onto the order book for a few at 50.4p - was hit immediately. That AT seller really means business; but why. At 50.4p the discount = 33.5% and the yield = 6.31%.

Now at 6.7% allocation versus my 10% MAX - so will have some more before the close perhaps.

[skyship] 23/6/2022 14:52

Personally I'm long wine every day; but when you live in France you feel it's your duty to the local vignerons!

[spectoacc] 23/6/2022 14:28

Thanks @giltedge1. Interested to hear what sellers of SREI etc are buying. Personally SHED looks not bad here, finally at a decent NAV discount. ASLI OK but EBOX cheaper ;)

Slow-motion bloodbath occurring in the small REITs, and rare to see no dcb.

Pays your money & takes your choice, but I seem destined to get all my favourites cheaper still.

I'll then happily sit on them for divis.

Could be worse - could have been long WINE today.

[giltedge1] 23/6/2022 10:09

I recently sold SREI, (& SHED) for good prices for once, to reinvest in other opportunities. I like the company more proactive than others, infill Industrial buildings, regear leases & have backing of Schroder Property team who have extensive resources, so happy to buy back when in funds. But I diversified to Europe & in Euros, ASLI as UK REITs seem correlated, & not investing all my pension fund on Boris. I would avoid house builders at the moment as too many unknown variables.

[spectoacc] 23/6/2022 07:59

We just dipped below 51p :)

Good luck - have been buying higher. We've not had falls like this for a while - a steady drip of lower prices, zero panic, but all my REITs are lower & been adding in particular to UKCM, EBOX, SREI.

Stretched to some PSN today too, as if I wasn't property-exposed enough already. Just can't see how everything isn't priced in already (eg 3% interest rates, & recession).

[skyship] 23/6/2022 07:36

The chart suggests we could sell off down to the end Feb'22 low at 50.25p; still, decided to re-join at average 51.9p - keeping some in reserve should we break down below 51p.

At 51.9p that = a 31.5% discount and a 6.13% yield.

Bearing in mind their great debt deal (13yrs at 2.3%) and 47.5% Industrial, SREI again looks a real bargain.


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[spectoacc] 22/6/2022 20:44

Agree re recession, but the markets will also turn again well in advance of it.

Trouble is, no one has a crystal ball. But recession = demand destruction = lower inflation, & markets will love an interest rate peak (albeit it we may be waiting until 3%).

The REITs haven't been this unloved for a while, and the next NAVs (& the qtr after) will be interesting.

[nickrl] 22/6/2022 17:30

MRF that is fair assumption but SREI have reasonable income protection for several years albeit if this turns into the 1930's then all bets are off.

[my retirement fund] 22/6/2022 16:52

In these markets cheap only gets cheaper. The recession has barely begun.

[rambutan2] 22/6/2022 15:36

Bought a few at under 52p. Seems too cheap, especially taking into consideration what was said in the very recent manager presentations.

[rambutan2] 22/6/2022 14:41

I noted that CREI recently added some 10yr debt but had to pay 4%. Made me think of the deal SREI has.

[my retirement fund] 22/6/2022 14:34

Food for thought, Shareprice = 52p. 31% discount to NAV on a yield of 6%

[nickrl] 22/6/2022 11:53

i thought the other way and 60p was next stopping off point after last weeks results but clearly others aren't convinced.

Several others are now getting back to big discounts with RLE/RGL both close to tipping into 9% yields by calcs. The former of no interest but RGL getting tempting although being virtually all office now leaves them as a bit of one trick pony compared to BREI etc.

[my retirement fund] 22/6/2022 11:39

Sub 50p on the cards I fear

[hindsight] 19/6/2022 11:33

Base rates one thing, borrowing on the curve another. Imagine banks will want intrabank + credit risk now

[nickrl] 19/6/2022 09:46

Added to SREI pre results and was quite hopeful that 60p looked on teh cards but looks like a big seller appeared late on Friday so back all square!

There is no doubt there will be a recession how deep isn't clear but this may help in moderating commodity prices so lower the inflation peak. What's pretty clear though is BoE doesn't have the desire to raise IRs very fast or even far as they expect prices to moderate with demand destruction driven by higher energy costs. This will have a knock on impact into discretionary spending although with savers having accumulated so much over last two years even that area won't fall off a cliff. So all round currently not too many threats in our sectors. So if REITs can raise debt they will still get a low rate so not yet the time to be too underleveraged.

[chucko1] 19/6/2022 09:19

Flyer, quite so. But the lower leverage is paramount as it was that, the far higher leverage of 2007, which resulted in no financing available post-crash at any reasonable price. Leverage will result in a death-spiral in a way higher financing costs [alone] can only dream of.

[spectoacc] 19/6/2022 07:56

@Flyer61 - agreed.

[flyer61] 16/6/2022 15:17

SpectoACC/SKYSHIP230;.also it is pleasing to note that these small REITs seem to have their financing in a far better place than pre the GFC.

[spectoacc] 16/6/2022 15:07

Agreed @Skyship. Slightly concerning seeing the warehouse boys (SHED; WHR; BBOX) well down, but that's surely more an Amazon thing. On the ground, everything still tight - Industrial still strong.

Will that change with UK recession? Maybe, but there's a heck of a lot in the discount already; no issue with over-gearing; no issue (so far) with rent recovery; divis while-we-wait.

Added EBOX & UKCM amongst others.

Markets could have a long way to fall, & REITs not going to be immune, but I'd take physical assets in an inflationary environment over trading co's.

[skyship] 16/6/2022 14:56

Specto - "added others today". At the open today I held just 2 REITs; and at the close I will be holding just the same two!

Preferred to have an increased weighting in the sector having recently sold CREI & SREI.

But decided really couldn't do better than adding to what looks like the absurd value in BREI. Discount at 33%!

I'm now overweight there and carrying a large loss; but frankly not concerned...