Schroder Real Estate Inv... Share Discussion Threads

[metis20] 27/7/2022 13:55

The buy-backs will be made under the authority granted at the annual general meeting of the Company held on 9 September 2021, pursuant to which it has authority to repurchase a maximum of 73,612,937 of its ordinary shares (being its outstanding shareholder authority). Such authority lasts until the next annual general meeting of the Company (or other such general meeting of shareholders at which authority to buy back shares is obtained).

[petewy] 27/7/2022 13:41

Good results for the future. Buybacks in September

[flyfisher] 27/7/2022 08:46

Some incremental gains should arise in 2023 as they have the £8m new build at cheadle due for completion in Q1/23 and the planning app at chippenham should be progressing.

As the chippenham planning app is on nil valued land, at what point in the process is any value recognized ?

[chucko1] 27/7/2022 08:22

The small 1% dividend increase is a sign of more to come. In the same breath they mention "progressive", which does not need to include an out-of-cycle increase as this one appears to be.

Discount of 32.3% with a share price of 53.5p and NAV, just published, of 79.1p. At these sorts of levels, a share buy-back clearly makes sense at this point of the cycle. The recent pace of property revaluation is very unlikely to continue at this pace for much longer, if at all. But with low LTVs the norm, unlikely to fall much even in a mild recession.

[spectoacc] 27/7/2022 08:07

Not had time to dig into it property but looks the usual rock-solid performance from SREI.

Edit - looking for negatives:

- The interest rate cap on the revolving facility with RBSI expires in July 2023, making their debt interest rate comments slightly more nuanced than stated
- 29% LTV doesn't feel like an ideal time to be doing buy backs, welcome tho they are
- Portfolio activity is excellent but we only hear the good stuff, not eg rent-frees or incentives
- Void rate at 8.4%/6.9% is relatively high.

Overall, SREI is an absolute bargain IMO. Which makes it one of several, but still.

[petewy] 12/7/2022 11:44

Thanks Flyfish, interesting

[spectoacc] 12/7/2022 08:18

Interesting, thanks. Presumably a lot of yield compression within that lot, rather than much spend/management? But Milton Keynes really stands out. As do the varying fortunes of Industrial vs Retail (eg no.1 vs no.10). I'd worry about return-to-mean, but much is clearly structural.

[flyfisher] 12/7/2022 08:10

I looked at where the gains have arisen, within the top ten, since 2016.

1 Milton Keynes, Stacey Bushes Industrial Estate £62.8m val £42.1m gain
2 Leeds, Millshaw Industrial Estate 54.9 29.9 gain
3 London, Store Street, Bloomsbury (50%) 42.5 7.2 gain
4 Manchester, City Tower (25%) 40.9 0.3 loss
5 Bedford, St. John's Retail Park 33.3 n/c
6 Chippenham, Langley Park Industrial Estate 27.5 8.2 gain
7 Norwich, Union Park Industrial Estate 25 11.4 gain
8 Cheadle, Stanley Green Industrial Estate 24.7 7.4 gain
9 Leeds, Headingley Central 24 2.8 gain
10 Uxbridge,106 Oxford Road 14.9 3.3 loss

[spectoacc] 12/7/2022 07:38

Agreed, SREI in my Top 4. Again tho, do have some concerns about them all performing this badly before disaster has even struck (be it Russia switching off Germany's gas, the looming October consumer crunch, renewed Covid, or something we can't yet see).

Interesting read:

[skyship] 12/7/2022 07:34

nexus - thanks as ever for your CBRE projections. On a 78.1p NAV the discount rises to 34.1%.

Not as absurd as CTPT's 40%+; but surely still far too high for a quality player like SREI.

[ammons] 11/7/2022 18:52

Great for my pension. Happy to just collect the divi while I wait for some sense to return to the reits

[nickrl] 11/7/2022 18:38

spin agree should be protection but market doesn't buy it although its across the board currently. So yes another nice entry point but I thought that just before the results a few weeks back so topped up then and only see it head lower again!

[spin doctor] 11/7/2022 16:46

Back into these at sub 52. Pretty much the levels of one year ago.

Feels like good margin of safety. Lovely dividend. Sensible active management.

[nexusltd] 10/7/2022 21:15

Applying the CBRE Q2 stats to SREI’s March 2022 portfolio mix.
- Capital growth, end June NAV estimate: 78.1p + Net Revenue before quarter dividend 0.7p + Disposal Portsmouth Industrial 0.33p
- Discount on 52.4p closing 09 July offer a) Capital growth only: 32.9%, b) All: 33.8%,
- Yield 6.1%

[chucko1] 30/6/2022 09:30

At 3.2% yield, not recycling quickly enough is hardly the issue. Could buy Gilts at not much lower a yield.

[nickrl] 30/6/2022 09:25

Great sale as long as they don't run into EPIC problems and can't recycle quickly enough but me thinks they've timed this sale well. Interesting they run out such a comprehensive asset mgt update perhaps trying to counter some negativity against share price Mind you im still not that convinced about teh Starbuck lease seems we are taking most of teh construction risk on a letting that still "conditional" presumably on completion of unit.

[skyship] 30/6/2022 07:34

Presages an encouraging NAV & Divi update in c3weeks time.

[spectoacc] 30/6/2022 07:23

"Southlink, a 26,975 sq ft single let industrial asset in Portsmouth has been sold for £6.5 million. The price compares with the 31 March 2022 independent valuation of £4.9 million and reflects a net initial yield of 3.2%."


3.2%! Hope one of the other REITs isn't the buyer..


And note the rent increases on new lettings of industrial - rent will follow capital uplifts IMO.


"Since 31 March 2022 the Company has completed 17 new lettings, renewals and reviews across 427,121 sq ft. The transactions will generate £2.7 million per annum of rental income and increase contracted rental income by £1.0 million per annum."

"Following the update provided with the Full Year results, two lettings have completed at Langley Park Industrial Estate, achieved at 26% and 31% above the previous passing rent respectively:"

"The next phase of the business plan at Langley Park is the development of new warehouse units, to be constructed to an operational Net Zero Carbon ("NZC") standard, on the site where there is surplus land with currently no apportioned value. A pre-planning application to develop 130,000 sq ft of space has been submitted to Wiltshire County Council."


There's a lot to like about SREI - if they're not the most active at creating value, they can't be far off it.

[skyship] 28/6/2022 14:04

Also reduced my holding at 54.3p. Prefer not to be too over-extended in anything at the moment...

[chucko1] 28/6/2022 10:54

Sky, as we keep saying, these bizarre sell-offs are merely a reflection on the weak hand(s) of (an)other(s).

At the discounts we saw last week it would have been an act of savage and dark stupidity not to have bought, whatever ones holding at the time!

Easiest trade of the year. By a distance. I was thinking of opening an ISA for my cat. (Won't make it to SIPP age, unfortunately).

Only sold 1/3 of what I bought.

[cousin jack] 28/6/2022 09:10

Sold my recent buy this morning. Thanks Sky for highlighting the opportunity last week.

[nickrl] 27/6/2022 22:34

@skyship for sure but i had already loaded up further before teh results so couldn't bring myself to buy anymore

[skyship] 27/6/2022 20:52

A very welcome (& profitable!) recovery from a bizarre sell-off...

[skyship] 27/6/2022 12:02

Thnx for that