Uk Commercial Property Reit Limited

-0.10 (-0.17%)
Share Name Share Symbol Market Type Share ISIN Share Description
Uk Commercial Property Reit Limited LSE:UKCM London Ordinary Share GB00B19Z2J52 ORD 25P
  Price Change % Change Share Price Shares Traded Last Trade
  -0.10 -0.17% 57.60 1,309,953 16:35:08
Bid Price Offer Price High Price Low Price Open Price
57.50 57.80 58.50 57.40 57.90
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Real Estate Investment Trust 73.38 -222.33 -17.10 - 748.46
Last Trade Time Trade Type Trade Size Trade Price Currency
17:41:53 O 845 58.104 GBX

Uk Commercial Property R... (UKCM) Latest News

Uk Commercial Property R... (UKCM) Discussions and Chat

Uk Commercial Property R... Forums and Chat

Date Time Title Posts
04/6/202317:18Uk Commercial418
24/6/201410:35Property Capitulation-7.5% yield192

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Uk Commercial Property R... (UKCM) Most Recent Trades

Trade Time Trade Price Trade Size Trade Value Trade Type
2023-06-08 16:42:0358.10845490.98O
2023-06-08 16:11:2457.6014,9688,622.02O
2023-06-08 16:09:3057.6015,4928,923.39O
2023-06-08 16:07:2357.8199,83757,719.76O
2023-06-08 15:57:3857.601,159667.62O

Uk Commercial Property R... (UKCM) Top Chat Posts

Top Posts
Posted at 26/5/2023 07:08 by spectoacc
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."

Posted at 18/5/2023 14:48 by spectoacc
@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.

Posted at 10/5/2023 14:22 by spectoacc
I reckon wages, materials etc up 30-50%. Difficult to equate that to overall contract cost - but the obvious delays also add costs.

Say an overall say 20-25% overrun, maybe an extra £15-20m to UKCM. As you say, they'd undoubtedly stump up.

Of more concern is that it's a revenue lease, and they've never divulged what they expect to get on it. It's the wrong side of the station and who knows what the economy will look like in late 2024/2025?

I'm suspicious of development where it's been purchased wholesale from someone who's put it together. Doing an EPIC-style Haddington deal is great, and all the REITs are capable of things like that - spot an opportunity, buy some land (or own it already), put it through planning, develop it.

That's now what UKCM have done. They've bought (at near the top of the market) a deal that someone else has assembled. Maybe it works out just fine, maybe it doesn't, but shareholders have no way of being able to form a judgement because UKCM won't divulge any info.

And UKCM's track record on gearing in particular has been very poor.

A reminder they "acquired this opportunity" in May 2022, having no doubt been in discussions for many months:
"..A hotel development opportunity in Leeds, from Marrico (Sovereign Square) Ltd, a joint venture between Marrico LLP and Helios. "

It isn't a vast chunk of the NAV (c.5% - currently..) but is a chunk of the gearing.

Posted at 10/5/2023 14:00 by nickrl
Im surmising that UKCM have a contract with the developer to purchase which presumably allowed them to contract with the builder, who is a decent sized organisation, but i do see daily construction companies going into administration due to cost overruns on contracts they couldn't recover all too often due to material cost rises. So its a credible concern and my understanding is UKCM are the funders so given the sunk costs they would in all likelihood stump up extra if necessary but unlikley to be more than a few million so wouldn't be a dead loss.
Posted at 25/4/2023 12:05 by dodger777
Surprised this hadn’t affected the share price today or maybe it just hasn’t filtered through 🤔
Posted at 09/4/2023 17:01 by spectoacc
Phoenix funds swapped physical property for the stake in UKCM, via seeding the IT with the property (and several later transactions, if memory serve).

ie rather than their various funds holding physical property, they preferred to hold shares in an entity that took on the management.

I don't know enough about the Phoenix funds to know if they'd ever want to cash out, but Phoenix themselves clearly aren't a bidder, and they've sold no UKCM shares over the past years. They could in theory sell out of UKCM and buy into another property co to keep exposure, but why would they?

These Life funds tend to be very long duration.

Someone else may have better knowledge of the funds/Phoenix. But unlike eg the very focussed MLI, or the not-actually-bid-for-yet EPIC, UKCM's very generalist.

@giltedge1 - I don't see Precision Park as the big error, true it was "let's buy now everything's gone up" but still a quality asset. The Hyatt deal was the big clanger IMO: no certain income, large build liabilities, no income until it's finished sometime in 2024 (choose your month), looks very expensive for what is effectively regen.

I'm long UKCM but realistic about what it is. "Cheap but poorly managed".

Posted at 03/4/2023 13:37 by spectoacc
They can't be taken out due to Phoenix.

Agree re divi. Where UKCM have shot themselves in the foot is obviously the big increase in gearing (from effectively zero) to in part fund the ridiculous, non-earning for years, uncertain earning even when built, being built by a co who are late filing their a/cs, Leeds hotel deal. You only need look at the pictures to see it's a regen project, and a very expensive one.

So abrdn tell them interest rates are going back to 2.5% in 2023 - great, load up with debt, don't worry about the RCF.

Then abrdn say 3%. Still fine.

Then abrdn say 3% but the cutting cycle only begins by the 14th December meeting - eh??

I wouldn't have bought back into UKCM if the Leeds hotel deal was any bigger than it is - c.5% of NAV - but I fear there's more twists & turns to come with it.

If they wanted a good use for their gearing - bring everything up to EPC C. Hunker down, concentrate on covering the divi. They're clearly good at the leases side, probably because much of UKCM's property is good quality. Even the hotel may work out but it'll be early - mid - summer - Q3 2024 before it's even finished. There's going to be a lot of water under the bridge between now and then.

Posted at 03/4/2023 09:07 by spectoacc
Lots to chew over in today's RNS. They're still trumpeting the Leeds hotel deal, despite it being likely to send LTV above the targeted max of 25%, despite no financial details, despite it being a t/o rent, despite construction not finishing until "summer" 2024. I make this a slight slip already from the original announcement?

"..We expect this to deliver an attractive elevated income return against a traditional leased hotel model."

I'd say that's almost impossible to call, over that timeframe, with no certain income amount, and what I'd really like to know is - who's on the hook for construction cost overruns. If anyone can get that out of UKCM, please message me.

£62.7m total commitment, they state.

"The development has progressed well throughout the period."

Apologies if this sounds over-critical - I am a UKCM holder, one of my few REITs atm, but not because I regard it as well-managed.

"At 31st December 2022, 28% of portfolio rent is subject to a form of index-linked rent reviews or fixed increases, which provide an estimated blended annualised increase of 3.3% per annum."

Overall, or just on the 28% subject to review? They don't say. Still - this is at least as good and often better than the "inflation-linked" fibbers like THRL etc.

"76% of the Company's portfolio by ERV in currently rated A, B, or C".

So 24% isn't. But unlike some, at least they recognise the importance of EPCs.

There's a lot on student accommodation, more than I remembered in the portfolio?

Won't repeat CP. thread comments on the interest rate expectations, but suffice to say they've rowed back a little from the comedy of the last RNS, whilst still either keeping in the typo (2023 or 2024?) or else looking really silly. Place your bets.

"In essence, our strategy is very straightforward maintain our robust balance sheet and focus on continuing the progress we have made to improve earnings through leasing activity and successful completion of our modest development pipeline, while remaining alert to market opportunities linked to an eye on future interest rates."

Idiots on interest rates, fools on the development side, once again getting LTV all wrong - but leasing activity is good, occupation & rent collection are strong, and the portfolio overall is good quality. I like UKCM, but with major caveats, and only because it's "cheap".

Edit - First Leeds Hotel RNS said completion "..In 2024". Subsequently that became "Mid 2024". Now we're "Summer 2024". Semantics, maybe, but suspect they've gone from spring, to June, to August. On the plus side, £62.7m has been the stated cost throughout, but I'd love to know who's on the hook for construction costs that could easily have risen 50% between them buying the deal (they didn't put it together) and completion in what I guess will be late 2024.

"12 May 2022: UKCM...announces that it has acquired a hotel development opportunity in Leeds, from.... a joint venture between Marrico LLP and Helios."

Posted at 21/2/2023 14:17 by spectoacc
Not sure it shows that valuers were wrong. The risk-free has moved significantly, that's why values have fallen so sharply. Not because rents are diving or tenants disappearing.

As per usual with REIT RNS's, even ones that seem thorough leave out a great deal.

"The leases secure £2 million of rent per annum in aggregate which, in addition to the premium over the previous passing rent, is ahead of ERV."

"Will Fulton, Fund Manager of UKCM at abrdn, said: "These latest lettings at Ventura Park have been agreed very shortly after the units became vacant at market rent significantly ahead of the previous rent paid, reflecting the strength of the market, lack of supply and strength of this location for London businesses."

So what was the premium over the passing rent, or even over ERV? Why were there no dilaps - or were there? Is there a rent-free? Assuming not, because:

"As part of the agreement, UKCM will install LED Lighting throughout the unit and an electric Variable Refrigerant Flow temperature control system in the office to improve the EPC rating from an E to a B"

UKCM would have had that CapEx to do eventually anyway, as they will elsewhere (& surprised that alone takes it from E to B), but what will it cost? If the market was as strong as they like to imply (and it is pretty strong for industrial still), you'd land the tenant with the LED lights work.

"The 29,000 sq ft Unit G&H is available to let" is slipped in at the bottom - am honestly surprised they mentioned that at all.

"Aerospace Reliance Ltd, a global supplier of aircraft maintenance materials, took occupation of the 32,000 sq ft Unit 7 on the 18 January, the day after it became vacant...".

Again - any rent-free? Why have we only just been told all of this well over a month later?

It's good news - industrial still going well - and a small net positive for UKCM that they've supposedly got an uplift in rent (depending on refurb cost above, and any rent-free or incentives, & the void time for the larger unit). But there's too much left out of such a self-congratulory RNS to do more than fall for the PR speak they want you to fall for.

Posted at 21/2/2023 10:32 by cwa1
Solid announcement:-

21 February 2023: UK Commercial Property REIT Limited ("UKCM" or the "Company") (FTSE 250, LSE: UKCM) announces that it has secured new leases on 116,200 sq ft of space comprising two units, B and 7, at its Ventura Park industrial estate in Radlett, Hertfordshire.

The units have been taken by two new occupiers following the departure of the previous tenant on 17 January 2023, with one moving in the following day, demonstrating the continued strong demand for good value, well-located industrial space. The leases secure £2 million of rent per annum in aggregate which, in addition to the premium over the previous passing rent, is ahead of ERV.

As a result of the agreements, UKCM has increased the weighted average lease term of Ventura Park from 5.75 years to 7.4 years and has taken occupancy to 94.4%. The new leases maintain UKCM's occupancy level at 98%.

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