Uk Commercial Property R... Share Discussion Threads

[spectoacc] 01/2/2023 11:13

@giltedge1 - re the Leeds hotel, I tried repeatedly to speak with them about it at the time, and found them incredibly arrogant and unhelpful. Contrast that with eg CTPT, or EPIC, or indeed most of the small REITs.

What I wanted to know was - why were they committing such large sums to a t/o rent, what was even a very approx estimate of the return/yield, were they aware of the status of "south of the station" in Leeds CC, how were they funding it, and what would happen if costs increased with the build time being so long - an unexpectedly pertinent question, considering what's happened since.

They wanted the questions in an email instead, which I did.

They then answered almost none of them, beyond telling me that Will Fulton was familiar with Leeds, so not to worry about the location. And today we see that the funds are indeed coming from borrowing.

Let's see if it they get it completed on schedule in Q2 2024, what the economy looks like then, what their LTV looks like because of it, and what the total cost has been.

It might work - but it felt completely the wrong time to be doing it, and the wrong price. I'd say both of those with bells on now.

[skyship] 01/2/2023 11:07

ghhghh - "Not much else to buy at the moment"

As a matter of interest, which REITs (other than EPIC & UKCM) do you now hold?

[giltedge1] 01/2/2023 10:52

Wasn't expecting such a thumping valuation drop.
Specto is right management has made a hash of execution last 12 months, should have sat on their hands, bought at the peak. I always thought you buy low & sell high, but at Mgt school judging on performance of this REIT & others, they learn the opposite?.
I am okay with new builds University Accommodation, Hotel, New Industrial Units, I am sure they can off load Hotel in 2024 if they want too, shortage in main city centres. income looks secure 98% occupancy, which is way above average, & buidings mostly modern & pass EPC B test, Lucky for me smallest holding. Okay for new joiners at this level.

[ghhghh] 01/2/2023 10:47

I bt some at 55.1p and on the bid at 55p. Not much else to buy at the moment.

As a general rule I try to buy just after ex dividend since share price normally falls by a larger margin as short term holders exit

[nickrl] 01/2/2023 10:44

Oh thats a brutal NAV fall surely going to put them top well bottom of the class. That said need to look at the income potential here which without a special divi im forecasting at 6.1% with share price fall when i penned this. They also have a low vacancy rate at 2% which isn't to be sneered at and not too many lease events in 2023.

The outlier here is the RCF as i don't believe its hedged and they've got it extended by 2yrs to cover the various capex (the Leeds hotel needing 60m!) but margin is now 1.9% + SONIA which we know will be at least 0.25% higher tomorrow and potentially by year end +1% so thats is going to eat into the extra rental income they have secured so can't see a divi increase being possible and certainly no special. The fact they haven't hedged or swapped it is probably because they allowed Aberdeen forecasting to dupe them, like they did API, into believing IR will be down 2.5% by end of year! The Daily Sport had more believable headlines.

Anyhow as it above 6% goes on my watchlist but will wait for the FY22 numbers first.

[skyship] 01/2/2023 10:19

Formerly an institutional favourite this one. Back down to near the recent low. At 55.70p the new discount = 30.1% and the yield = 6.10%.

Watching and waiting... At 52.30p the yield hits 6.5%. That would be seriously tempting!

[spectoacc] 01/2/2023 10:11

Not sure what you mean @SupeARich - loan-to-value is about 20%, they've c.£50m spend to come on the Leeds hotel etc, which will take them to probably over 25% LTV (they're borrowing the extra). They'll be hoping for a decent income increase from that, but it's a t/o rent and they refused to give any further details.

The RNS today is long, but worth reading top to bottom.

[spectoacc] 01/2/2023 07:19

Couldn't happen to a nicer REIT - love the way they put the rent improvement first:


"Highlights

· 12.3% increase in EPRA earnings per share to 0.82p (30 September 2022: 0.73p) for the quarter leading to 19% growth for the year.

· Unaudited NAV per share of 79.7p (30 September 2022: 101.5p) a NAV reduction of 21.5% and a NAV total return for the quarter of -20.8% (Q3: -7.9%). The twelve months of 2022 show an overall 21.9% NAV reduction, and a NAV total return of -18.1%."


And still £50m+ to be spent on a white elephant hotel in Leeds. UKCM, the REIT that went to near-zero gearing for the upturn, and geared at highs for the top of the market.

"Work on site has started for the Company's Hyatt Hotel in Leeds which is expected to complete in Q2 2024."

[skyship] 15/12/2022 13:34

FEx747 - see my 289 above, then click over to the CP+ thread. SREI & SERE equal 2nd best in my book.

[freedomexpress747] 15/12/2022 12:03

Thanks Skyship, EPIC looks the best of the bunch. Interest rates look near the top of the cycle and on a 12 month view, lowly geared commercial property or cash rich REITS starting to look attractive. Need to spread, any others you particularly like?

[my retirement fund] 15/12/2022 10:05

Thanks and I'll spend some time having a read of your thread keep forgetting about that thread. Good idea.

[skyship] 15/12/2022 08:47

MRF - re Specto's comments above - practically all of the REITs have recently done video presentations, especially on InvestorMeet; and SERE on YouTube - see link in the SERE thread.

Yesterday I posted on the CP+ thread (P.No.2519) listing my recent purchases back into the REIT sector, along with discounts and yields; to which I've since added EBOX.

My view on current BEST BUY is EPIC; partly because of their large investable cash stash.

[spectoacc] 15/12/2022 07:14

If it were me - I'd be looking at those with the soundest balance sheets, with ideally plenty of investable cash for what could be moderate carnage next year.

The cash is either to pick up bargains, or to make them bomb-proof. NAVs are subjective.

Not a fan of UKCM management - can highly recommend talking (or attempting to talk to) all of the REIT managers. No better way to get a handle on their thinking, & quiz them directly on debt, outlook, buying possibilities.

[my retirement fund] 15/12/2022 00:24

So thinking of increasing my exposure and looking to which commercial real estate funds out there have the best discount to nav and the best properties, offer the best income and have best management out there then, boy and girls?

[giltedge1] 05/12/2022 09:55

I disagree seems to have found base 60p & ready to rally, with gilt yields stabilised.

[skyship] 30/11/2022 16:18

UKCM looks to be in a freefall downtrend again. Perhaps another opportunity to get back on board down at the 55p level.


free stock charts from uk.advfn.com

[colonel a] 29/11/2022 09:59

Close to one of the great universities?

[giltedge1] 29/11/2022 09:31

Good to see Shaftesbury report a revaluation gain £ 100m although in a specialised sector. Shows best to invest in London & Southeast. can't understand funds who sell in London & buy in North, can't see the attraction of an office in Hull.

[spectoacc] 16/11/2022 16:11

A few struggling, not sure why - BCPT off 5.1%.

[dendria] 16/11/2022 16:02

Ex-div tomorrow too (0.85p).

[skyship] 16/11/2022 15:50

Well, got 30k back @ 58.6p. That's a 7% fall today - rather bizarre.

[skyship] 16/11/2022 10:18

Sold a bit too early into the rally, with the last going at 63p.

Question is how far back will they retrace? What level to rejoin the game? Would prefer something in the 50s; and we're certainly getting closer...

[giltedge1] 10/11/2022 15:15

REITs & US Funds flying today, shows how dangerous it is to be out of the market on good days. UKCM still good value up tp £0.70 but over that risk/reward, may change to a good global equity fund.