Uk Commercial Property R... Share Discussion Threads

[giltedge1] 28/9/2022 16:37

Bought more at 0.57 took a risk, but saw Land & Bland bounce 5%, calculated risk. Can't be much downside. Too late on ASLI bounced 8%.

[giltedge1] 27/9/2022 17:22

Looks like Algo trading, no logic too it. at least have a get out of jail, continuation vote, but others not keen, any change of heart?

[skyship] 27/9/2022 15:40

Indeed - API just dropped another 4%...

[hugepants] 27/9/2022 15:26

Accelerating off a clifftop more like.

[ghhghh] 27/9/2022 14:46

'Gradually grinding lower'? REITs are down 20% in under two weeks! This rate of decent is unsustainable I hope! Down 40% over six months

[essentialinvestor] 27/9/2022 12:20

Added 10k, however this is looking more and more like a gradually grinding lower bear market than a short event.

[giltedge1] 26/9/2022 11:13

Consensus seems to be a yes to continuation vote, even though a lot has changed.
Anyway have read annual report & seems Leamington Spa £94M was a mistimed purchase in my opinion, December 21, there was no mention of yield, which is a bit odd on such a large purchase. As part of deal a speculative Industrial development included which they are currently building. Does anyone know details?, so that makes two current developments, other one being hotel in Leeds.
Am not against new buildings, as such if prelet, meet new EPC requirements will be competed in 2024 probably, but timing of signing contracts, not great.
I can see value, as low gearing & 2% vacancy, a lot better than peers, & new buildings but waiting for mangers Q3, report, will be interesting, before any further purchases, I was in profit 6 weeks ago?.

[skyship] 26/9/2022 10:28

Agreed, the LTV critical in a falling market, almost as much as in a rising market of course.

UKCM's low LTV now standing it in good stead....though you wouldn't believe it from the share price - now down below 60p!

[hindsight] 26/9/2022 10:18

Yes understood you were Skyship but personally think best to add in gearing on all to compare apples with apples on assets dropping
If take present 60p and add in 14% LTV then say 10% fair long term discount so 66.5p then that covers a 36% assets fall

[spectoacc] 26/9/2022 09:41

Reminding myself of this:

"b) Nature of the transaction ACQUISITION OF SHARES
c) Price(s) and volume(s)
Price(s) Volume(s)
£0.78180600 50,000

d) Aggregated information
Aggregated volume
Price
N/a single transaction
N/a single transaction
e) Date of the transaction 2022-08-15 "


Could argue a lot has changed in 5 weeks - Trussenomics, interest rate expectations, property outlook - but not the best non-exec purchase, 50k at 78.1p. Makes me feel better tho :)

And they got the divi + special.

[spectoacc] 26/9/2022 08:38

Cheap gets cheaper. Good luck all.

(@HP - it is, but I know the area & wanted at least a very vague steer on their expectations of return, particularly with it being a t/o rent. Also wanted to know who bore the development risk - UKCM paying, but what if costs continued to climb? I got absolutely nothing except for being told the manager knew the area too. I asked how recently).

[skyship] 25/9/2022 20:54

hs - thnx for that; but I was posting just the NAV fall, not portfolio fall - see above.

[hindsight] 25/9/2022 17:00

Skyship , you may need to add the gearing to your numbers ie if property falls 20% with 14% LTV then its 87.15p nav

[hugepants] 25/9/2022 16:54

£63M for the Leeds hotel development is pretty insignificant versus the £1.7B property valuation!

[skyship] 25/9/2022 16:28

Well, we know for sure that we will see quite large NAV falls for Q3 & Q4; and perhaps into next year too.

Interesting to run a few numbers with the share price @ 62.4p:

# NAV fall of 10% to 101.6p - almost the 102p level of Dec'21. NAV discount falls back to a still historically dramatic 38.6%.

# NAV fall of 20% to 90.3p - almost the 90.2p level of Jun'21. NAV discount falls back to an historically still high 30.8%.

Running those numbers suggests to me that UKCM is indeed seriously oversold; certainly not in isolation in the sector - but now extremely cheap.

[spectoacc] 24/9/2022 19:35

LTV low but agree on the Leeds hotel deal - I quizzed them on it, largely unsuccessfully.

Phoenix are voting for continuation - they rolled the assets into UKCM, they're not likely to now want a firesale of them.

[nickrl] 24/9/2022 18:36

They have no immediate debt repayment until April 24 on the RCF the earliest loan is 2027 but have committed best part of £63m to a hotel development in Leeds which presumably will be funded out of the RCF. The RCF is linked to SONIA and doesn't appear to have any swap on it.

Never really kept up with this one as it yield was lousy but now c5.5% at fridays closing price and thats without the special so worthy of a second look but not my favoured target.

[giltedge1] 24/9/2022 14:34

Phoenix advised in August they intended to vote for continuation, obviously a lot has changed since then, so not a given. In a wind up they can be given "in specie" distribution ie their share of assets, meaning only need to sell half.
Or option 2, continues for another two years & Phoenix throws in the towel, then wind up for at least say £1.10, so return £ 0.62 to £ 1.10 plus two years dividends. Maybe better in fact as more liquid market to sell into & interest rates on the way down.
Either way looks a winner from these levels.

[spectoacc] 23/9/2022 19:51

Good point on dissent, tho we'd have a long wait for any better outcome, & we know there won't be buybacks. Hopefully the special divi was a sign of things to come, albeit the market is about to get a whole lot more difficult.

[steve3sandal1] 23/9/2022 19:45

Thanks ge1. So vote is going to happen but continuation isn't in doubt if they've 43/44% in the pocket. Continuation suits manager and the board £sd fees so the situation isn't going to change in the short term. I will have at look who the other institutional holders are as they will be able to make their views known before and upon the vote. The level of dissent will be interesting 25% might be telling ahead of a subsequent voting event should this share price fail to get off its knees. Long term game.

[essentialinvestor] 23/9/2022 18:57

It looks interesting at these levels.

What is the likely % decline for UK logistic assets might be a key question.

[giltedge1] 23/9/2022 18:13

Hello Steve,
Just rechecked June NAV 2022 announcement. It is happening now, if not mistaken!, Someone needs to get on the phone to Phoenix & directors' ASAP. In no ones interests to wallow at 50% discount, can you check for me. Share would jump to 90p if passed. see below.

If the closing market price of the shares had been more than 5 per cent below the published NAV for more than 90 continuous days up to 29 July 2022. In accordance with the discount control policy, the Board is therefore intending to convene an extraordinary general meeting to consider a resolution to approve the continuation of the Company.

The Investment Manager continues to improve earnings and identify attractive opportunities for the Company's property portfolio and the Board believes it is important for shareholders to approve the continuation vote in order that the Investment Manager may continue to pursue the investment strategy effectively. Accordingly, the Company will, in due course, be publishing a circular convening an extraordinary general meeting to consider that continuation resolution and the Board will be recommending shareholders vote in favour of the Company's continuation.

The Company has discussed the upcoming resolution with its largest shareholder, Phoenix, which currently holds in aggregate approximately 43.4 per cent of the Company’s issued shares, and which has indicated it intends to vote in favour of continuation.

[steve3sandal1] 22/9/2022 17:01

Being very lazy here as in pub and can't check. Does anyone know when the last continuation vote was? Thanks.

[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% :)