Schroder Real Estate Inv... Share Discussion Threads

[skyship] 13/9/2022 07:44

nexus - false TA signals happen of course; though the H&S pattern at the top of a range tends to be reliable. Worrying?

Still for the moment I abide by my earlier comment that in the short-term indicators oversold, so a bit of a recovery likely - & that is what we saw yesterday. Target however may be limited to the falling 50day SMA @ c52.75p.

[nexusltd] 12/9/2022 21:28

@ Skyship. Thanks for bringing the TA to my attention. Following a HS, according to the books the share price should fall to S-(H-S) = c. 40p in the short term. Do you think that will happen? I have been observing a similar HS formation in RSE for a potential BUY opportunity and so far, it has not worked out.

I have been using limit orders to accumulate stock at prices based on TA indicators and I'm not having much success. Orders I placed on Sept 1st for APAX, APEO & SREI have failed to fill. Evidently, I need to review my methods. Thoughts?

[my retirement fund] 07/9/2022 11:18

Well i've just taken a 25K clip, RSI looks little oversold.

[flyer61] 06/9/2022 07:42

Interesting Spec.....OPEC + cutting production to keep the price of oil up as we go into the northern winter.....Maybe they have looked in their crystal ball (camels entrails) and decided the oil price is likely to drop quickly given China is going nowhere at the moment and the rest of the world is slowing down. Albeit I have noticed it has been really busy in South Manchester and further afar of late.

As to SREI, there are two big London property auctions later this month (Allsops Commercial and Residential) I have been looking through in detail. This will be the 'real market' and it will help with forming my view if these small UK prop Reits are in the buying zone again.

[spectoacc] 06/9/2022 07:03

Re #1897 & inflation, & Truss's plan:

"...The policy would be “messy and complex” to implement but had advantages over directly subsidising the cost of bills. It would also help to curb the headline rate of inflation..”"


(Personally I prefer the "energy allowance" option).

[spectoacc] 06/9/2022 06:50

BoE (unsurprising with Ollie Bailey at the helm) have lost the confidence of the public rather than the markets IMO. The markets can see there's naff-all they can do for the majority of this cost-push inflation - if they put interest rates up to 20%, our fuel bills would still be roughly the same.

It's possible gas/oil tank early next year - which puts a large amount of deflation next to the inflation - but can't really see it. Would likely need the £ to get strong again too. Oil's come off, but countered by the £ having done the same.

So I'm with @nickrl - inflation to fall right back to a finger-in-air 5% this time next year, but that's still way above the BoE's target.

I always thought interest rates to top out at 3% - but 4%-5% now looks more likely.

Of course, Ms Truss may have some plans for the BoE, in particular their remit..

[my retirement fund] 05/9/2022 20:38

I think its pretty clear the BOE have not got the faintest clue what to do and have completely lost the confidence of the markets.

[nickrl] 05/9/2022 18:06

Sky if you mean inflation will rapidly fall back high teens (when it gets there in Q4) i agree but it won't fall back below 5-8% imv as the 2nd order increases will be feeding into prices by then. However, I believe because the spike will be of short duration this will give BoE pause for thought i suspect although has to be another 0.5% next week.

[skyship] 05/9/2022 16:50

Also high cash, now at 50%. Still holding REITs: CTPT (much reduced), CLI, RGL, SREI (bt today) and UKCM. Also a few oil/gas/miners.

I agree with excellent finacial journalist/economist Matthew Lynn that inflation will fall back rapidly next year; and that a UK recession will be minor. So happy to hold the other 50% in play.

[spectoacc] 05/9/2022 14:44

Jury's out on Truss - she seems appalling, the acceptance speech was reminiscent of her cheese one, the way she sent adulation Boris's way. But waiting to see what policies she actually pursues.

Some policies put interest rates higher than they would have been - eg her mooted tax cuts - some potentially help inflation, eg depending on how utility bill relief is structured.

Higher borrowing seems a given, as does weaker £ (but how much priced in already?).

RGL - I'm anti-offices :)

Something has to give on business energy bills. Was a restaurant on the news the other night, paying something like £34k/year in total fuel bill, just coming off a fixed deal and the best one they could find next was £96k pa. Almost every pub, restaurant, shop, small business is in dire trouble, now or soon.

On top of that, footfall down 10% due to people not being able to afford to eat out, which will only get worse.

Hopefully most of our REITs have minimal exposure to that end of the market, but doesn't make the pain any less real, or the situation any less serious.

In more cash than I've been in for a long time atm, whilst still having a lot in REITs. But haven't been doing much averaging down of them this time. Cheap can get cheaper.

[nickrl] 05/9/2022 14:37

Specto agreed although had i waited till now i would have been paid a whole lot more as several are just shy of 7% and RGL flirting with 10% yield and that makes me tempted.

So its seem pretty done deal Truss will fling a load of cash around that leads to possibility of keeping inflation higher for longer but will BoE keep ratcheting up im not so sure as they have to balance off crashing the banks even with high level of fixed mortgages they run out in the end. So this ought to be reasonable neutral for REITs/Propcos but market seems to be betting against that. I like to be contrarian but i have my limits!

[spectoacc] 05/9/2022 12:17

The REITs are getting more interesting - trouble is, so is everything else.

..And in an "May you live in interesting times" sense.

But I do like SREI. And CTPT. And API, BCPT, UKCM: all for discount, yield, real assets, low(ish) LTVs, no pressing debt rescheduling, (mostly) decent tenants.

Won't stop them going lower if the market tanks of course, but at least you're paid to wait.

[pavey ark] 03/9/2022 16:54

A follow up to my posts 1872/1874.

Times today:

"Everyone back to the office on Monday? Not a chance
Flexible working seems as firmly embedded as ever, Tom Howard, Constance Kampfner and Ben Martin report."

Fairly long and detailed article suggesting the return to the office is not happening ....at least not as it was before covid.

Almost bought back in here and API but will give it a bit more time as I suspect that some offices will be hard to let and if vacancies rise I suspect that rental rates will fall for those that are let on a new lease.

[my retirement fund] 02/9/2022 14:24

Who brave enough to want any?

[chucko1] 25/8/2022 15:11

MRF, one thing we can agree on is that, although we have posted mildly opposing views on some matter, we have both been voted down - there is a nutter still on the loose. And it cannot sensibly be both yourself or myself!

[my retirement fund] 25/8/2022 14:58

well if it is below 50p and certainly near 40p I will consider a good chunk, till then its not for me.

[chucko1] 25/8/2022 14:30

I see little connection between the two.

PSN, at a yield of 15%, has benefitted from help-to-buy and such like as well as mortgage rates on the floor, and offered in abundance. It relies on earnings via the selling of residential homes, rather than commercial lettings and redevelopment.

The previous correlations (going back many years) of homebuilders to rising rates is food for thought - even at the current lowish valuations.

Whereas weekly correlation over the past 5 years between PSN and SREI has been 38%. Compare with the Beta of PSN to the FTSE of 1.09 and the Beta of SREI to the FTSE of 0.60.

Anything is possible, of course, but good if it (40p) happens as much as March/April 2020 ended up being a gift from God.

[my retirement fund] 25/8/2022 13:10

Look at PSN, trading on a retrospective PE of under 6 and a 24% yield, does 40p seem so difficult to envisage ?

[chucko1] 24/8/2022 11:58

Additionally, if the bankruptcies were to arise, fat chance you would be better off in much else.

Even the current 51p is a 35% discount, let alone what 40p would represent. Historically, property has suffered a little in the early stages of inflation, and then recovered handsomely.

So, I have bought back what I sold above (having bought when it got stuffed for 10% or more the last time).

[spectoacc] 24/8/2022 11:30

Nothing's impossible, and we're approaching a market where cash is going to be king, but you'd have to go some to make a case for 40p.

NAV 79p (may well fall, but real assets unlikely to collapse during inflation), gearing too low to be a threat, cost of debt very low, debt rescheduling years away, occupancy very good, rent collection excellent, divi good, buy backs improving NAV (relatively).

"-- Net loan to value of 29.0%, with an average interest cost of 2.7%, an average loan duration of 11 years and no debt maturities until 2027."

A series of bankruptcies amongst existing tenants might do it I suppose. Seems unlikely from the list.

[my retirement fund] 24/8/2022 11:03

I suspect this may see 40p at some stage

[my retirement fund] 24/8/2022 10:45

Thats a vicious downward spike, it may even have the momentum to break 50p support

[badtime] 24/8/2022 10:43

Bit of weakness recently