Good results and the nice chunky quarterly dividend continues at circa 9% on current s.p. |
9.6 year average debt life fixed at a low rate. With moderate increase in rent collection (assumes further mild difficulties with one or two providers) but with wholly inflation-linked uplifts with around 6% largely baked in for another year, it is not difficult to see full dividend coverage in the short term (they say the current run rate already covers the accrual rate) and rises in the medium term, no matter the direction interest rates take. They have shown there is a market for their assets, albeit at a slowish pace and so even in a few years if we see rates at around 6%, they can manage their balance sheet accordingly.
The last few months of derisking of SOHO makes the share resemble an inflation-linked asset at around 800bps over gilt linkers. Seems the remaining risk sells very cheaply, even taking into account the investment manager and issues still to be fully ironed out. FWIW, the valuers seem to share this opinion (not that I put much store by that) as the NAV keeps rising! |
"Be an optomist then"?? You haven't been introduced to Specto yet then? ;-)) |
Be an optimist then it will only get better if and when Parasol/MySpace are sorted and if interest rate is turning its direction of travel. |
Reads pretty well in fairness, albeit Parasol/MySpace still not quite there yet, so rent collection stuck at 90% & divi unmoved. |
Results Out |
Anyone know when the results are out? Last year they were out by now but I haven’t even seen notice of results yet. |
I agree Redhorse. SOHO should be a typical no brainer investment. Steady income and potential for rerating. Tangible assets in a low supply high demand business. And yet, and yet we are trembling at the knees waiting for an update. |
That said, SOHO is completely separate from DIGI9 etc. and there has been ample opportunity for the skeletons to emerge from the closet with all the focus on social housing REITs so hopefully I'm wrong... |
On the face of it, inflation linked rents, high demand and recession proofing sounds pretty good but there are big question marks over the counterparties, the property value is inflated due to it being a function of rental value rather than market value and it's managed by Triplepoint who I'm becoming increasingly wary of after bad experiences with my other investments.... |
Next quarterly update due, probably this coming Wednesday. Share price action suggests not much in the way of good news. |
Wonder how SOHO get the NAV signed off by the auditors? The model doesn't seem dramatically different from other REITs such as Residential Secure Income, who had to reduce NAV dramatically. |
Glavey, the bottom line is that rents have been going up faster than the rate of interest. The portfolio value is calculated on the future rent roll, not on the current price of property. This is discounted to a current value, if interest rates and inflation are low then the discount is low and the 'value' is higher. SOHO have been buying and benefiting just like other property REITs from this benign environment. Last year interest rates rose and so the 'value' should have adjusted down, but hasn't by much. The market says we don't believe the current NAV, hence the large discount + for SOHO problems with some of the rent receipts. This might therefore be a buying opportunity, assuming everything sorts itself out fairly soon. Or an early warning that the NAV is going to go down and the share price with it, ie things could get even worse. |
Why has this apparently only seen growth to the NAV in recent years? OK there was a slight fall late last year, but otherwise... Is it to be believed? |
What's happening to this today? |
Yep - don't see any need to take profits |
70p by year end? And still a bargain. |
Another whopping quarterly divi in the bag. Nice to have locked in a 10%+ yield. |
Good to see some recovery in share price here into the mid 60's. Still over sold for a healthy dividend share and some price appreciation still to come. |
Nice little bounce today. |
Report by Edison (paid for by SOHO of course) reads well to me. |
Can't see anything in today's RNS that justifies the large discount to NAV here. At 60p, it's cheap as chips. Taking time to sort out MySpace, but it always going to be. |
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