Uk Commercial Property R... Share Discussion Threads

[spectoacc] 22/9/2022 14:52

Phoenix said they'd support continuation, not sure it's in their interests not to. If they had any sense, they'd buy up the rest of the co.

The Leeds hotel development doesn't look the best deal in the world - but largely agree re LTV.

Ironic that they were almost 0% geared in the great rebound from Covid, and now find themselves 14% geared as everything looks to come off. But better than 0% to 40% :)

[2wild] 22/9/2022 14:50

Added at 64.25p, following Bank of England rate decision, on NAV discount of 42% and 5.3% covered dividend yield. With LTV below 14% these are best place to ride out a 1 to 2 year recession. There must now be an outside possibility Phoenix will abstain at the continuation vote.

[2wild] 16/9/2022 19:17

Another 2.3 million shares changed hands in today's closing auction.

[spectoacc] 16/9/2022 15:30

Usually does 400-800k in UT, by far the most liquid, but does look as if the bottom might finally be in. (Not sure how to put a little fingers crossed emoticon in).

[skyship] 15/9/2022 16:48

1.029m UT at the close. End of the tap perhaps...

[skyship] 15/9/2022 16:47

To repeat much of what already said.

The summer of '22 proved a rather tortuous period for the REIT sector; and none more so than UKCM which hurtled down in an ungraceful path from 93p to 66p - a fall of 29%!

This former institutional favourite now offers a 41.5% discount and a basic yield of 5.15%, increasing to 8.05% if you add in the 1.92p Special Dividend.

It is crassly oversold; and a reasonable bounce seems in order.

But whilst waiting for that recovery, go try figure just quite how they elected the figure of 1.92p for the Special. Seems to me that they've allocated £25m - nice enough in itself; but that sum bears very little relation to the substantial portfolio re-rating we've seen recently.

Anyone any thoughts on that £25m?

[spectoacc] 15/9/2022 09:26

I just can't with offices, but as ever, depends what's in the price! Good luck.

Mainly SREI, UKCM, BCPT, EBOX, API here - also in too high & too large to do much averaging, other than at the edges. I'd hoped to sell down UKCM but it's just too cheap.

A lot of Opportunity Cost out there, but at least the REITs pay us to be patient, unlike the likes of WINE (yesterday) or JOUL the day before, or HFG today.

[skyship] 15/9/2022 09:17

As we all know, Markets can be totally illogical; and those periods do offer opportunities.

Unfortunately took up the opportunity to broaden my REIT holdings rather higher up!

Holding CLI, CTPT, RGL, SREI & UKCM. This last now my biggest holding; and the first my biggest loss as it trades at over a 50% discount...

[spectoacc] 15/9/2022 07:39

Agree the Special can't be included, was effectively a capital return that reduces the NAV.

But the discount seems crazy - UKCM may be suffering for being the largest and therefore the easiest to dump.

What's notable is how broad the selling's been - UKCM not benefitting from having a very low LTV, and down as much or more as those with double the LTV.

If it was property crash fears, that wouldn't make sense. And if it was interest rate fears, it also wouldn't - sell those with the shortest debt rescheduling.

Yes, Industrial is going to come off - it couldn't keep doing +20% p.a. - but it isn't crashing, and nor (yet..) is the economy, with the govnt/taxpayer backstopping & capping the energy price rise.

Talking own book, & believe things will get worse before they get better for the economy & markets, but things are starting to look daft amongst the smaller REITs.

[skyship] 14/9/2022 15:41

At 65.2p the discount is 42.2% and the yield at the 5.32p dividend, a level inc. the 1.92p Special, is now at 8.16%. Even 5.2% on the basic 3.4p.

Looks to be an absurd undervaluation. The whole sector is weak; but this seems to have gone cheap.

Perhaps the Phoenix control is weighing on this as they remain for Continuation in any upcoming vote.


free stock charts from uk.advfn.com

[chris79] 09/9/2022 16:00

The discount is way above the historic norm and seems rather ridiculous given the low gearing. Phoenix seem bizarrely happy with things, not sure the benefit to them in sticking with things.

[hugepants] 07/9/2022 22:35

Do they have much in the way of development? I thought it was just the hotel in leeds and thats about 5% of the portfolio.

According to Hargreaves Lansdowne the current discount of 40% is way above the level its been the last 10 years (the chart does not go back earlier). It never even went above 30% at the height of covid.

[nickrl] 07/9/2022 17:08

Phoenix presumably what the income stream so are happy to site on the sidelines

[spectoacc] 07/9/2022 16:03

Lol. Trouble is, Phoenix will always block them being wound up, so it's a charade.

And IMO the Phoenix holding is what's preventing buybacks (tho they didn't admit as much).

The development pipeline alone rules out them being wound up.

[hugepants] 07/9/2022 16:00

"Discount Policy / EGM

The Company's discount control policy provides that if the market price of the
ordinary shares of 25 pence each in the Company (the "shares") is more than 5
per cent below the published NAV for a continuous period of 90 dealing days or
more, following the second anniversary of the Company's most recent
continuation vote in relation to the discount control policy, the Directors
will convene an extraordinary general meeting to be held within three months to
consider an ordinary resolution for the continuation of the Company. "

5%? They were obviously being a bit optimistic. Try 40%+

[spectoacc] 07/9/2022 15:25

Covid low was about 60p I think? Rent collection problems, indeterminate duration lockdowns, divi threatened - hard to believe it deserves to be back within 10% of that, but can't buck the market. Good luck.

[2wild] 07/9/2022 15:07

Back in at 66.45p, having sold at 88p just over 4 years ago. 40% discount to nav and 13% LTV is very generous. Many others have much lower discounts and double or treble LTV.

[pdt] 07/9/2022 11:12

Added to my holding here; yield 5% and discount 40%. Will commercial property drop more than 40% in the coming recession? Seems like Liz will throw enough money leading to lower inflation expectations, lower peak interest rates and a mild recession.

[hindsight] 31/8/2022 17:21

Continuing to warm to these, bar the cinemas, due to sector and low 14% LTV. Its a case of surviving the corporate valley of death to the green field on the other side. If others want gearing they can do cfds themselves. But in no panic as costs still to come out in the economy and rate rises yet to feed through. Only thing im making money on is short gilts

[skyship] 31/8/2022 16:42

Another bull point:

"The Company has a very low void rate of 1.5% (2.4% at Q1 2022) which provides
good visibility of future income and clearly demonstrates the asset management
team's ability to grow income, with a strong focus on capturing the portfolio's
reversionary potential whilst also driving value."

[giltedge1] 30/8/2022 09:28

Only a small part of portfolio but, Disappointing that management (I think previous manager) bought cinemas in the first place, to any normal investor can see a declining sector. The only plus being Cineworld bondholders will keep trading as closing their doors will mean no business to sell or operate. I checked Cineworld accounts & positive earnings before interest payments, so I suspect will keep trading for next year at least. On to the positives fully let, mainly industrial with new £130 million, student/industrial assets (at fixed cost, so saved at least 10% on inflation pressures) coming on stream & increasing income. Assets mainly new with most EPC A,B,C so little to spend to bring up to new standard & easier to let as energy efficient. Sold off Birmingham office requiring investment. Income increasing & Board have new policy of special dividends NAV 112 & director bought in August at £0.78 so I would say good value at this level £0.71, I will add.

[hugepants] 28/8/2022 20:52

Yes as you say the cinemas may themselves may be OK, its just the equity holders that are probably going to be wiped out.
The cineworld is in Glasgow city centre.

[spectoacc] 25/8/2022 11:31

The loss of CINE wouldn't entail a complete loss of CINE's rents - they seem to be talking US Chapter 11 atm. But if they were to go, question is whether they're an anchor anywhere. Wouldn't fancy repurposing a cinema for anything else.

UKCM breaking to new lows, notwithstanding the recent large XD. 90p's seem a long way away now, even with an XD NAV of c.110p.

[hugepants] 19/8/2022 15:40

Cineworld heading for bankruptcy according to the news. Cineworld is only 3.1% of ukcm's portfolio but it won't help sentiment.

[skyship] 18/8/2022 08:25

XD 2.77p today...