Standard Life Investment... Share Discussion Threads

[caradog] 11/7/2016 07:36

Two stories in the FT should provide a boost today. The one suggests that rates will be cut on Thursday, and the other claims that New York based private equity firm Madison International Realty has 1 billion pounds lined up to invest in UK commercial property, taking advantage of the need for quick exits by funds facing a surge in investor withdrawals.

[fabius1] 07/7/2016 01:46

I make it @60-63 on the monthly/weekly.

[jonwig] 06/7/2016 12:01

If a BtL landlord can pay the mortgage and escape voids, he might be OK. Or do BtL mortgages tend to have loan-to-value covenants? I've no idea.

Maybe the Mail/Express will change their tune: "Houses 20% more affordable since Brexit Vote."

SLI bottomed at around 33p in March 2009. A rather smaller company then, of course.

[dr biotech] 06/7/2016 11:51

This has now dropped about 25% from its peak. You have to wonder what a property crash would look like in this low yield environment. I guess its residential prices that will come under pressure soon and then we could see the BTL mob come under pressure. I'm not totally against that even though it would be a hit to my own personal wealth (I am referring to my own house, I don't have a BTL).

It would be interesting to see how the strongly probrexit, house price fretting Mail/Express readers will respond to that.

[badtime] 06/7/2016 09:31

Dave ..chance to buy 67ish or wait for the 50's if you rate redsonning

[jonwig] 05/7/2016 17:47

Announcement, which of course adds nothing to recent comments on this thread, which were fully aware of the situation:

The independent Board of Standard Life Investments Property Income Trust (“SLIPIT”;) notes the announcement made yesterday by Standard Life Investments to suspend trading in the Standard Life Investments UK Real Estate Fund, an open ended Property Authorised Investment Fund (“PAIF”).

The Board would like to emphasise that SLIPIT, being a closed ended investment company, is completely independent of the PAIF and is in no way affected by yesterday’s announcement. SLIPIT has no commercial dealings with the PAIF and the shares of SLIPIT continue to be actively traded on the London Stock exchange.

[redsonning] 05/7/2016 14:46

Don't worry if you missed these at 66-70p
They will be testing the 50s when the fear sets in again!

[schofip] 05/7/2016 14:19

Very happy to pick these at 69. Was gutted I missed the rights issue at 82

[badtime] 05/7/2016 13:16

Caught som at 68...just a few mind

[younasm] 05/7/2016 12:54

Bought some at 67p -- I sold these a while back last year. Never thought I could buy back below 80p.

[dr biotech] 05/7/2016 11:38

FWIW the total all in cost of mine was 67.1 I see it as buying me income over the next 10 years. Obviously I'd appreciate a capital gain too should sentiment recover or things don't turn out as bad as feared. I have nearly 20k in these and UKCM now, that will be enough in this sector.

[daveofdevon] 05/7/2016 11:29

Thanks for your comments. My only problem now is that if I had spent less time thinking I could have bought at 66.5 as well!

[caradog] 05/7/2016 11:06

The open fund that is affected is Standard Life Investments UK Real Estate Fund. My understanding is that it is managed by George Shaw, whereas SLI is a closed investment company managed by Jason Baggaley. I can't see that they share ownership of any assets.

The downturn in the market generally will naturally affect SLI's net asset value, but yields seem certain in the short-medium term.

Journalists seem confused about the dfifference bewtween the two vehicles, and on the assumption that investors are too, and that the price fall is an overreaction, I bought more first thing at 66.5.

[jonwig] 05/7/2016 11:04

Dave - they wouldn't sell a shared asset to an outside operator - too complicated. Though an internal sale would be OK at the appropriate "fair" discounted price.

I haven't checked, but I'd imagine SLI have uninvested cash from their recent placing programme which would come in handy if price falls are overdone.

[daveofdevon] 05/7/2016 10:01

I would be tempted to top up but have one concern. I know the problem is in the unit trust where redemptions could lead to forced sales and big writedowns but in theory this should not apply to an investment trust because there are no redemptions.

However what if the investment trust and the unit trusts have shared ownership of some of the assets ?

[jonwig] 05/7/2016 09:20

Could result in vacancies which can't be filled without write-downs. As a positive, gilt yields are getting so ridiculously low, any 'real' assets could attract buyers. The LtV here looks very safe.

I've just bought some at 66.4p.

[dr biotech] 05/7/2016 09:08

That was the reason I was referring to. Interesting to see that Standard Life has also been hit, down 10% over two days. I guess if the big commercial funds are under pressure to sell as investors want to get out that will inevitable knock the valuations.

If I could get 7% across my entire portfolio I could retire.

Brexit could hit valuations - but you would also think that the fall in the pound may reduce the impact. Who knows.

[jonwig] 05/7/2016 08:56

Dr B: the only 'obvious' reason why this should have dropped so much today (far more than LAND and BLND, for instance) is the news of SL gating their open-ended fund. But I really can't see why that should impact SLI so much.

LtV was 28% at 31/12. It will probably be a lot lower after this year's equity fundraising.

SL property managers are meeting fund managers and brokers this week and I'm expecting to get a report later on what was said. I'm likely to be a buyer at some point, but irrational selling can go on for a long time.

[lord gnome] 05/7/2016 08:41

Last reported NAV (May RNS) was 82.3p, so at 67.5p per share offered, they stand at an 18% discount to NAV. If you think UK property prices are going to collapse again, then avoid. Otherwise, this might just be the bargain of the year, but WDIK?

[dr biotech] 05/7/2016 08:35

Painful drop today for obvious reasons. Yield now around 7% with a lot of tenants secured for some years. Have been tempted to add - hope its not a falling knife

[jonwig] 12/5/2016 12:15

So one's actions depend on how much weight you put on that premiss. I'm inclined to put more than you, maybe? Yield compression in London suggests they are vulnerable there, especially. (SLI not really affected there!)

[redsonning] 12/5/2016 12:09

jonwig - I entirely agree with everything you say. However the judgement here is about "if assets are revalued downwards".

[jonwig] 12/5/2016 11:45

redsonning - if assets are revalued downwards, share prices will follow, whatever the rental income. And if LTV is above, say, 50%, there will be fears about debt covenants.

The market will switch from caution to fear and some stuff will be sold irrationally, of course.

[redsonning] 12/5/2016 11:07

You have to be careful to get the analysis the right way round. An economy slowdown will mean a further extended period of low interest rates. That would tend to support the attractive yield parameter on propcos. Commercial property prices do not appear to be currently overextended, despite the recovery seen in recent years. Stamp duty impact is already now included the NAVs. Of course I agree that you have to look at specific cases, e.g. the premium on SLI, but this is related to the superb manager who runs the business, and has a long history of correct market judgement. As for Brexit, well I will not bother to restate the case, but there are many potential upsides as well as negatives!

In my opinion the main factor to beware of is overextended pricing in commercial property market real estate, and it is not at all clear that such a position has been reached.

[jonwig] 12/5/2016 09:11

I've just been looking at some of my propcos and decided to keep SLI on a LTV of 28% and DIGS on a LTV of 23%. Is a UK recession likely? On Brexit, sure. But could be in any case.