Warehouse Reit Share Discussion Threads

[sleepy] 08/6/2023 10:05

Hi nickrl - thank you for your thoughtful posts. May I ask how to find the webcast please

[nickrl] 07/6/2023 13:27

@cc2014 they've yet to disclose what they are selling but listened to webcast now they've uploaded it and under questioning yesterday they intimated it would be above latest book on NIY of 4.6%.

Also couple of things i picked out that they see Radway as the golden goose as they acquired the alnd when big boxes weren't as desirable as now. They reckon build prices are coming down and already have contractors on site sorting utilities and site preparation but won't commit to build until lease signed on the possible tenant they are in discussion with it.

Oh and the new debt arrangements are in force from next week with improved covenants in exchange for a 0.2% margin increase.

Finally hope to get divi covered in 2024 better that i reckon they can deliver but they have inside knowledge.

[cc2014] 07/6/2023 11:02

I haven't looked it up so don't know but it would be good to know what the disposal value was compared with the original purchase price. All the REITs seem to magically get their disposals away at about book value, perhaps because in my suspicious mind they keep the value low in the books once they know what asset they are selling.

However, they are doing something about it which I give them credit for, unlike some who seem to be sticking their heads in the sand when it comes to managing the LTV numbers

[makinbuks] 07/6/2023 10:32

Can't argue with either or the two excellent posts above, however I would just point out to nick that there was already a disposal post the year end reducing the RCF balance further, and to CC2014 that all the disposals have exceeded book value. they need to hunker down for another 18 months before the interest rate market comes back a bit. But credit where its due they have been pretty adept at that so far.

I came in at £1 and have sold some at £1.11 and £1.50 plus all the dividends so with my reduced stake I'll hang in for better days

[cc2014] 07/6/2023 10:20

If I may. The challenge here is that the share price has fallen from 160p to 97p and yet a number of us still sit here going "it's not for me"

We also sit here and look at discount to NAV. That tells me that whatever some DCF cash flow model tells us the NAV should be the city boys and girls don't think it's a suitable way to assess the value of the company and they think the value is far lower.

For me the biggest issue is that WHR like most of the REITs and renewable funds has been using short term super cheap borrowing set against long term investments. This has juiced up their returns until interest rates started rising but now doesn't look so clever. My view is that whilst it seems likely interest rates will fall back a bit in due course (but not as much as the city think) this is going to provide little help as I see rents coming under pressure and going negative.

I just can't see a compelling case. When a trust is being forced to sell it's assets to keep it's borrowing under control that's not great. And when several of them starting doing it all at the same time it's hard to see them getting great prices.

[makinbuks] 06/6/2023 14:37

They've run into a bit of trouble not of their own making. But the response, to sell assets for more than book to reduce borrowing and LTV is spot on and shows the model is robust. That is further illustrated by the strong operational performance re rent, occupancy and development.

Remember the target is 10% pa. on an accounting basis. Might not happen every year but as an average over the next five or six I'd say its a sound bet

[cc2014] 06/6/2023 12:17

Interesting update. Decent enough results in terms of rent reviews, but of course not great on the interest payment front.

I will continue to watch from the sidelines.

[qs99] 06/6/2023 09:23

Good review. Going to be a tough year probably, but then with peak interest rates IMO this should in theory start trending higher again. DYOR

[spectoacc] 06/6/2023 09:00

A slightly mixed bag but if you ignore valuations (which are only relevant at the margin, and to LTV), rent collection strong, occupancy improved, rent increases still coming through.

Then just a judgement of what you'd pay for the cashflow/earnings, vs eg recession risk.

Not currently a holder but doesn't seem overpriced.

[qs99] 06/6/2023 07:20

So we now await a recovery in valuations for this to start to motor again.

Await their variable rate paydowns to help with divi cover in short term while taking the yield

DYOR

[makinbuks] 05/6/2023 07:56

If you were looking to invest £20k for "long tern passive income" I'd be inclined to be more diversified than buying three REIT's. None the less the point that WHR could be part of that strategy is sound

[igoe104] 04/6/2023 10:48

Decent write-up.

[igoe104] 06/4/2023 20:07

I think the potential takeover of MPL has woken up investors, about how cheap these reits are at the moment. Some are 30% below their Nav

[qs99] 31/3/2023 08:02

Nice recovery

[alter ego] 30/3/2023 10:52

"big boxes still seem to have an allure" I guess that's because there is more demand than supply despite lower asset values. It's better than falling values and falling demand.

[nickrl] 30/3/2023 10:42

Given 63m of the RCF is unprotected and costing over 6% any sales that reduce this will help the free cash but fact remains is the divi is uncovered and that was fine when the assets were being revalued upwards every 6mths but becomes problematic now. Conversely big boxes still seem to have an allure so plenty of investors will still be attracted.

[qs99] 30/3/2023 08:20

Nice update IMO....yield looks to be tempting....should IMO be north of a quid at v. least! DYOR

[skinny] 30/3/2023 07:13

Warehouse REIT progresses disposal strategy with GBP54.7 million of sales

Disposals, active management and robust UK warehouse tenant demand has increased portfolio occupancy to 95.9%, up from 92.7%

Warehouse REIT ("the Company"), the industrial warehouse investor, announces continued progress delivering on its strategy to capture the inbuilt reversion across its 8.3 million sq ft portfolio, whilst also recycling proceeds through sales to pay down its overall level of debt.

Asset Disposals

In line with its strategy, the Company has recently concluded the sale of two distribution estates totalling 269,000 per sq ft, for GBP29.5 million, generating an ungeared IRR of 9%.

The disposals comprise:

-- 12 Exeter Way, Theale, a vacant 92,000 sq ft warehouse with a high office component, acquired by an owner occupier for GBP15.0 million.

-- Temple House, Harlow, for GBP14.5 million. The asset has been sold ahead of a potential vacancy and capital expenditure costs, following the receipt of notice to break from the main tenant in March 2023.

These disposals, in addition to the GBP13.9 million of sales announced at the half year results on 8 November 2022, have been augmented by another GBP11.3 million of smaller asset sales, taking total H2 disposals to GBP54.7 million.

Asset Management

Additionally, reflecting the robustness of the UK occupational market, the Company has reduced portfolio vacancy through active asset management initiatives and disposals, increasing the portfolio occupancy to 95.9% (as at 28 February 2023), from 92.7% (as at 7 November 2022).

Significant transactions include Midpoint 18, where the Company has exchanged on a new 10-year lease with a 5 year break, on previously vacant commercial space, to Inhealth Intelligence, a leading software provider of information management solutions for the UK healthcare sector, generating rent of GBP0.2 million per annum. Midpoint 18 is strategically located near the M6 motorway in Cheshire and totals c. 600,000 sq ft of multi and single tenant space.

Separately, the Company has also completed the construction, for GBP3.9 million, of an open storage scheme on surplus land at Midpoint 18. Brit European, an international specialist logistics occupier, has agreed a 15 year lease for the purpose built facility, generating GBP0.3m per annum of rent. Brit European is being relocated from the Company's nearby Radway Green Estate, facilitating vacant possession and advancing the wider redevelopment.

Paul Makin, Investment Director of the Investment Advisor, Tilstone Partners Limited, commented:

"We continue to make strong progress on delivering on the Company's strategy to minimise vacancy, capture the portfolio's inbuilt reversion and reduce debt. We have taken advantage of continued investor demand for exposure to the sector by arranging for the Company to undertake two further opportunistic disposals of assets requiring significant capital expenditure, simultaneously demonstrating the ongoing liquidity of the Company's real estate. In total, the Company has completed GBP54.7 million of sales during H2.

"Occupationally, the UK logistics market remains robust, evidenced by the progress on increasing occupation across the portfolio. The transactions at Midpoint 18 also demonstrate the acute shortage of good quality accommodation in the North West market, as well as the benefits of the locations of the Company's assets, close to key infrastructure and employment hubs."

-End-

[sleepy] 28/3/2023 08:39

Thanks Nickrl. Any idea how much they have sold so far?

[nickrl] 27/3/2023 22:17

@sleepy guess they are getting dragged down with the rest of them. They don't cut it for me the divi isn't currently supportable might have worked when NAV was going up but now looks risky although i suspect we are close to a floor in logistics valuations. They have got reasonable debt metrics with a fair amount capped at 1.5% +2% lending margin but buried in the interim report is that has cost 10m spread over 3 years but given where rates have headed a good investment last July. However, 100m is unprotected at SONIA+2% so c6.2% now and they have various commitments for c40-45m that will exhaust their current borrowing limit so they are making targeted sales. To my mind they need to cut the divi for a few qtrs to see how the market is playing out.

[sleepy] 27/3/2023 11:15

Anyone know what’s going on in Warehouse REIT?

[t-trader] 28/2/2023 07:13

Ex divi date 9th March 1.6p