Schroder Real Estate Inv... Share Discussion Threads

[arlington chetwynd talbott] 27/7/2023 06:51

I am basically a goldbug and have not invested in property for many years, but the NAV and yield here are certainly tempting. Surely there is a catch?

[giltedge1] 04/7/2023 06:55

Hello Skyship yes cheap but need BOE to announce peak interest rates,before meaningful gain, may be December, a few countries have already announced.

[skyship] 03/7/2023 15:46

Has to be a good trade surely. With the best B/S in the sector and arguably one of the best managers in Nick Montgomery; the 34% discount coupled with a great 8.24% yield, makes SREI standout value at this level.

[my retirement fund] 03/7/2023 14:37

Added a few at 40.6p

[mirandaj] 03/7/2023 11:24

giltedge1,

I don't know about any other vacancies and have not had time to look. I am sure there are vacancies anyway from time to time as normal and there are improvements going on with some properties.

[giltedge1] 03/7/2023 10:35

Hello Mirandaj, Looks Great & A Grade, sure will let. Any idea other vacancies? 7% last report, I know Manchester Tower has vacant space, any others Mgt quiet on this.

[mirandaj] 03/7/2023 08:37

Stanley Green again! But see the latest images (26 of them) and you will see what I meant about finish. Hoping that these will be let shortly.

[skyship] 28/6/2023 14:46

Added a few today at 41.44 - just rounding up an odd-numbered holding after an earlier DMA trade.

[badtime] 22/6/2023 14:19

Bit lower and I'll consider adding

[gonsan] 12/6/2023 17:01

on citywire:
hxxps://citywire.com/investment-trust-insider/news/schroder-reit-delivers-14-dividend-rise-as-higher-yields-dent-assets/a2419183?re=109970&refea=1811699

[skyship] 12/6/2023 06:29

spoole5 - good choices. Why? Because they are my two largest holdings. :)

[spoole5] 11/6/2023 16:25

Thanks for that, looking at either this or API.

[petewy] 10/6/2023 11:39

Ref for Simon t's tip in the IC

[skyship] 09/6/2023 10:59

chucko "...a very well run fund..."

Exactly - Nick Montgomery a seriously impressive manager. Very likely it was he who decided to fix the debt when they did. Not Schroder or surely SERE would have done likewise.

In the presentation they rightly made great play of the ERV which promises rising revenues and dividends.

I also like the portfolio sector split:

# 46.8% Industrial, 90% of which deliberately chosen as multi-let.
# 27.4% Office – but delve into that (26mins into the IM presentation). 10.7% is London universities; 8.3% in the Big6 cities & a further 8.4% in well-located areas such as Cheltenham & Fareham
# 11.8% in Retail Warehouse – universally viewed as a positive
# 7.7% Retail are convenience stores in densely populated areas

[chucko1] 09/6/2023 08:42

Not that I am surprised by anything, but SREI has failed to budge at all since yesterday's figures, outlook and strategy.

They may not shoot the lights out, but this is looking like a very well run fund from a number of angles.

[petewy] 09/6/2023 08:01

I had same problem. I rang them and told them I had read documents and they bought and normal price. It's their problem.

[orinocor] 09/6/2023 07:40

I'd really like to buy this but ii are displaying this message whenever I try. Idiots.

"The regulatory documents required for this order to be placed online are currently unavailable. Please call us on 0345 607 6001."

[skyship] 09/6/2023 07:21

A return to the 50p level highly likely. A 10% capital gain to add to the 7.5% running yield.


free stock charts from uk.advfn.com


free stock charts from uk.advfn.com

[giltedge1] 09/6/2023 07:21

Hello Skyship,
Yes good writeup need interest rates to start falling or at least peak to get a good gain I suspect.
I missed presentation any news on filling vacancies, 8% excluding new builds?. Do you know which properties?. Thanks.

[skyship] 09/6/2023 06:35

giltedge - thnx for posting the above. Reads really well.

[giltedge1] 08/6/2023 21:27

Copied from todays IC, basically same comments as posted today, but more content.see below.
SREI (45p)has not been immune to the challenging market environment as the steep shift in bond yields has led to a 1.5 percentage point hike in the equivalent yield to 7.8 per cent embedded in the portfolio valuation
However, the negative yield expansion valuation movement was partly offset by 9.2 per cent growth in the estimated rental value (ERV) of the group’s portfolio, well ahead of the 3.4 per cent increase in the MSCI Benchmark. New lettings, rent reviews and renewals generated £2.3mn of additional annual rent on a reversionary portfolio that has an ERV of £37.8mn, up from £33.8mn in March 2022 – well above the annualised rental income of £29.2mn currently earned from 312 tenants. The portfolio’s above-average income yield and asset management initiatives to support rental income growth explain why the underlying portfolio only declined 7.9 per cent in the 12-month period compared with the 13.5 per cent fall in the MSCI Benchmark.

Moreover, Schroder Reit’s low-cost fixed-term debt gives it a competitive advantage as 90 per cent of group borrowings are either fixed or hedged against interest rate movements. The £178mn debt secured against the £470mn portfolio has an average maturity of more than 10 years and average interest cost of 2.9 per cent. What this means is that the investment manager can recycle cash into selective acquisitions to exploit its low-cost funding lines to enhance rental income. For instance, the £14.7mn acquisition of a mixed-use office and retail property in Manchester City Centre was acquired on a NIY of 7.8 per cent, reversionary yield of 9.1 per cent and low average capital value of £283 per square foot.

The additional rental income generated from rent reviews and capital recycling are being passed on to shareholders, hence the 14 per cent increase in the annual payout to 3.22p per share. Based on the fourth quarter dividend of 0.836p (ex-dividend date of 15 June), the shares offer an attractive dividend yield of 7.4 per cent in addition to a 27 per cent discount to net asset value (NAV). The true share price discount to NAV is deeper still. That’s because the £16.8mn (3.4p) fair value benefit of a £129.6mn loan fixed at 2.5 per cent with Canada Life until 2036 is not included in the group’s NAV of £300.7mn (61.5p).

The high dividend yield and reversionary nature of a portfolio, which has a strong bias towards industrial and retail warehouses, explain why the holding has held up well since I covered the interim results (‘Positioning for a commercial market downturn’, 16 November 2022). Furthermore, with the gap between property yields and 10-year gilts close to the long term average for fair value, then there should now be scope for capital upside as rental growth drives valuations higher. Buy.

 

[skyship] 08/6/2023 16:00

Yes, a good presentation again. Many asset management initiatives to deliver further revenues going forward.

The presentation is recorded so viewable at IM soon.