Uk Commercial Property R... Share Discussion Threads

[giltedge1] 28/6/2023 09:20

Can anyone give me any information on Precision Park purchase about 18 months ago, paid £94 m for 2 warehouses & 1 office I think. 1 warehouse uk govt for covid, presume now surplus?, 1 office to a tech Co who dies not want to be named?. They have also just built an industrial unit, so not let. interesting how long that will take. My guess they lost £30m on original purchase, usually mgt top of the market buy, happy to be proved wrong?, then I might consider averaging down.

[spectoacc] 26/6/2023 16:39

Agreed - very much for Phoenix.

The Wimbledon Amazon warehouse was sold due to RCF/Leeds hotel issues IMO - but admittedly they got it away at a fantastic price. Still represents selling the family jewels tho.

UKCM (& API) is what happens when a Trust is run off the back of abrdn's farcical interest rate call of late last year.

[nickrl] 26/6/2023 11:37

They are just about covering divi based on what current contracted rent is and have low debt and whilst most of it is fixed they do have an increasing unprotected RCF that is being loaded up for the committed CAPEX which will erode the margin by a few percent over next 12mths but as long as hotel comes good in 25 then no immediate worries.

@Specto they are least shareholder friendly and their information transparency is definitely the worst of all of them which puts me off.

This is run for the benefit of Phoenix nobody else imo.

[giltedge1] 26/6/2023 09:13

I am confident UKCM will pay dividend at current level next few years but how low will share price go?, Cineworld are continuing to trade thank goodness. I presume Hatfield site rent will continue to be paid next 1 _ 2 years, no details given & being in SE can be repurposed or sold. Yes Mgt has been poor last 2 years, Used to be highly rated, directors need to step up in my opinion or wind up in next continuation vote.

[spectoacc] 26/6/2023 08:22

Question is, at what price would you buy back. Fail to see the appeal of any of the generalist REITs going into a recession. Albeit have bought a few specialists for a hoped-for bounce - eg SHED, EBOX, LXI - and hold the arguably recession-proof SUPR.

But API, SREI, UKCM, CTPT (ie LMP), BCPT, CREI, PCTN etc - where's the appeal? Recession likely coming even if rates go no higher than the current 5%, and how will shareholders feel when divis are cut - half of them paying some out of capital already.

UKCM have never mentioned Hatfield, and are IMO the least shareholder-friendly of the lot. Maybe the recession will be over by the time the Leeds hotel finally completes in late 2024?

One positive - they are at least more at the quality end. But they've made some appalling decisions on gearing.

[peckers56] 22/6/2023 21:58

Sold my entire holding in March to escape CGT - glad I
did!!

[giltedge1] 22/6/2023 19:19

Is £0.503 an all time low, from IPO?. it certainly feels like it. Phoenix should have wound up this fund, when they had the opportunity.

[giltedge1] 04/6/2023 17:18

Yes best to invest in logistics with new EPC rules on offices, meaning large cap ex & current high vacancies, make offices unattractive, Noticed Pctn converting Central London office to flats, so must be tough market. Best to invest now in logistics/industrial with 6% to 8% on offer eg API,Shed,Ebox, once drops to 5% then risk/reward more finely balanced.

[skyship] 04/6/2023 11:03

Other REITs? Well, I agree with you over API - my largest holding.

2nd best IMO is once again EBOX after their post results fall back from 69p to 61p.

The 33.2% discount to the Mar'23 NAV; coupled with the 7.11% yield suggests value IMO.

[giltedge1] 04/6/2023 08:23

Management annoyed me by lack of transparency so I did not participate fully in rally. Placed CSH money in SHED & API, Will keep holding as South East orientation best for long term appreciation. Any thoughts others in best Reit going forward.

[skyship] 26/5/2023 17:24

Hmm - can't please all of the people all of the time!

[giltedge1] 26/5/2023 12:33

I don't think we are getting all the facts sold a prime London asset, impossible to replace, for a provincial hotel. Wembley warehouse probably, would have had a large rent increase at next lease renewal. Why didn't they sell, the Glasgow Cineworld Building at NTA or cost that would impress me.

[kinbasket] 26/5/2023 11:47

They'll need the Lord's help on this one - long lease to a tech co, great, but 3.49%, when do the Mormons expect borrowing costs to go back below that? Would take base rates of eg 2.5%, and are losing money until they get there.

This is probably part of the plan. I don't imagine they are borrowing for this, the Mormon church is minted. Trying to attach a "normal" investing framework to a purchase like this is a bit pointless. They could just be lining up tax losses.

As a measure of the market it's a zero rated signal.

[topvest] 26/5/2023 11:21

Its an absolute no brainer selling this property at 3.5% when you are paying 6.3% interest. The interest on the RCF will be nearly 7% within months. I agree with all the comments about the hotel development and gearing. The manager has been poor of late.

[spectoacc] 26/5/2023 10:47

Suspect the loss of OCDO at Hatfield forced their hand, but it's undoubtedly a great sale - haven't seen anything sold at comparable yield recently (even if it probably didn't quite reach what it was in the NAV at).

[topvest] 26/5/2023 10:15

Great news today which de-risks the situation. It really does underline that companies exposed to RCFs are in all sorts of trouble if they don't have an interest rate sawp in place. 6.3% interest and probably increasing is truly awful.

[spectoacc] 26/5/2023 07:40

They'll need the Lord's help on this one - long lease to a tech co, great, but 3.49%, when do the Mormons expect borrowing costs to go back below that? Would take base rates of eg 2.5%, and are losing money until they get there.

But well done to UKCM. And as @CC2014 says, what else do they have that's very low-yielding.

[hybrasil] 26/5/2023 07:26

I googled church of the Latter Day Saints.

It seems to be the present day Mormons. Good for them- a well funded church.

I think it makes Ukcm look interesting

[cc2014] 26/5/2023 07:24

I read this several times.

OK, so great deal. Somehow they have got this away at a great price is it's helpful to pay down expensive debt.

But, at a 3.49% yield what was it doing in the portfolio in the first place? or rather I don't know any history so it's possible there's been plenty of capital appreciation but what else have they got in the porfolio with an implied 3.49% yield.

[spectoacc] 26/5/2023 07:08

Credit to UKCM, we know what "..Broadly in line with.." really means, but this is a necessary sale to start addressing debt, pays for the Leeds hotel on its own. Who'd have thought something could still be sold at a 3.49% yield, praise the Lord:


"..Sold its 186,455 sq ft Wembley180 logistics asset in London to Covent Garden IP Limited ("CG"), a registered charitable company. UKCM will receive a consideration of £74 million, which reflects a net initial yield of 3.49% and is broadly in line with the 31 March 2023 valuation."

[spectoacc] 18/5/2023 14:48

@nickrl - yes, UKCM little to no interest in talking to PI's. Why should they, when only PHNX call the shots.

But good point - if there's no break/expiry, the problem's OCDO's. However, if you re-read the OCDO RNS, they very much imply it isn't - a small, one-off redundancy cost, nothing about ongoing lease payments on a giant empty shed.

Is it possible OCDO already have a sub-tenant linked up?

UKCM should at least get some decent dilaps out of it, but wonder how re-lettable something so large is. They all want purpose-built (and ready-purposed) these days. Including OCDO.

[nickrl] 18/5/2023 14:10

@specto what i couldn't chase down is what the lease terms are on the Hatfield shed as UKCM are rather aloof on that sort of info. Im guessing that its beyond 12mths as they would have surely declared that one of their biggest tenants would be vacating at break/expiry.

[spectoacc] 18/5/2023 08:45

GRI an interesting one, a long time since I've held it. They seemed sanguine about the Renters Bill in this morning's RNS.

UKCM XD today of course.

Still no mention of OCDO loss, or what they'll do with the huge shed.

[giltedge1] 17/5/2023 10:32

Property shares ticking up today, must be jobs report & anticipating interest rates peaked. For any top ups in UKCM wouldn't want to pay more than 55p, on risk/reward basis. I will hold my current holding as seeing covered dividend maintained.
I have topped up on Retail Landlords PRS & GRI as easier to relet on vacancies & rents still rising, that is my theory!. On commercial I prefer SHED, as logistics still best sector.

[spectoacc] 12/5/2023 14:20

Any director buying is a plus, but 50k? It's barely an ISA subscription.