PrefInvestor1
20 May 2018
REIT Valuations / Share Prices Hi All,In an idle moment I took a look at the NAV, share prices and yields of a few REITS including INTU, HMSO, NRR, AEWU & RGL. The first two (the big ones) have just as much debt (35-50%), but have fully covered dividends (INTU ~115%, HMSO ~192%) and trade at about 50-70% of NAV.The last three (much smaller) have LTVs of (~20% AEWU, ~50% RGL, ~30% NRR) have less well covered dividends (AEWU ~70%, RGL ~116%, NRR ~74%) and are trading at or slightly above book value (AEWU ~1.26, RGL ~0.95, NRR ~1.2).Based on this if the 3 small REITS were to trade on the much lower p/b ratio of the bigger REITS then their SPs would be much lower. But clearly much of a premium to NAV doesnt seem justified either, so its hard to see NRR being worth much more than say 300ish (given that its NAV is ~290) perhaps justifying much of the fall from last year of ~360. Mind you I would have been quite content to hold had the share price been 285 plus.Be interesting to see the results on Thursday. Not sure about their further expansion into pubs as other companies operating in that area arent that profitable. But that said widening their scope out of retail seems like a good idea to me, especially the way the high street is right now.NB All figures from a single central source (ie didnt visit each REIT web site for info) so its possible that the figures are not the very latest.
FRTEB
19 May 2018
Store closures and rent reductions Following on from ToysRus and Maplins stores closing, Mothercare recently announced the closure of a number of stores and I now read that Next is apparently looking for 20+% rent reductions: " Before it opens a new store, Next models whether it will still be profitable in the 10th year of operation if sales fall at the worst-case rate. It is renewing leases on shorter terms, which gives it the option of handing back stores before they become unprofitable. Next is forcing landlords to share the pain of high street contraction. Typically it's achieving more than 20% rent reductions on lease renewals, and renewal terms of only five years. " [link] Sounds rather ominous. If this kind of thing is limited to a small number of retailers then I would have thought the damage to REITs such as NRR should be containable due to being sufficiently diversified. However I think sentiment will do most damage. Maybe that's what we're already witnessing with the ongoing fall in the share price?
devonplay
19 May 2018
Taste for Pubs. Article in The Times, Saturday.NNR to possible reveal on Thursday, alongside full-year results, the purchase of £100m portfolio of community pubs from Hawthorne Leisure.Page 57 if you have a copy.DL- never a secret in EC1/2DL
JohnOfYork
19 May 2018
Re: So here we are - coldascheese "Well I think we have a simiar situation as U + I where share price kept dropping for no particular reason. "Perhaps there is a reason why the SP has been falling. According to this morning's Times:A company that owns about 300 community pubs across England and Scotland is poised to change hands in a deal worth more than £100 million.The Times understands that New River Reit, a property investment trust focusing on retail and leisure, is set to double its mainly tenanted and leased pub estate by taking over the privately owned Hawthorn Leisure.Hawthorn, which is controlled by both its management and Avenue Capital, an American private equity firm, was put up for sale recently via Sapient Corporate Finance with a price tag of more than £115 million. It was formed four years ago to acquire 275 Greene King pubs for £75.6 million. It quickly followed that deal with the purchase of 88 pubs from R&L Properties.The company has since taken over two small packages of managed pubs from Nectar Taverns and JD Wetherspoon, and has sold off about 100 non-core hostelries.Its pubs are mostly community locals, such as The Stags Head in Carnoustie, eastern Scotland, and The Wheatsheaf in Newmarket and The Crossways in King’s Lynn, Norfolk.The emergence of New River as the buyer will come as a surprise, as most experts had been favouring Patron Capital, which teamed up with Heineken last summer to complete a £1.8 billion takeover of Punch Taverns. Admiral Taverns, itself acquired last year by Proprium Capital Partners and C&C Group for £220 million, was also hotly tipped.New River is understood to be hoping to agree terms on a deal in time to make an announcement alongside its full-year results next Thursday.It may retain the management team at Hawthorn, led by Gerry Carroll, its chief executive, to help to run the enlarged pub business.New River, which was founded in 2009, has a £1.3 billion property portfolio that includes shopping centres, convenience stores and about 330 pubs, of which about 200 were acquired from Marston’s in 2013. Two years later it bought another 158 pubs from Punch Taverns.Shares of New River fell by 5½p, or 2 per cent, to 266½p. None of the parties involved chose to comment on the deal.
coldascheese
18 May 2018
Re: So here we are - coldascheese Well I think we have a simiar situation as U + I where share price kept dropping for no particular reason. Then just before results they moved up and are now 20% higher.NRR have gone from 374p to 265p in a year , that's 109 p down.(about 30%) I can't see any reason for that and consider they are oversold.But we will see soon.
PrefInvestor1
18 May 2018
Re: So here we are - coldascheese Hi coldascheese,Well it wouldnt be a market if we all had the same thoughts on a stock. The market liked the Q3 update and there was a significant bounce as i recall. However holding over results can be bad as well as good, for example BT lost 9% on its results day last week. Now i am not trying in any way to compare those two stocks - just saying that results are a double edged sword.I wish you well with your top up, but personally i dont see this leopard changing its spots and even if it does bounce i suspect it will then slip back into its downtrend thereafter.Guess we’ll soon know......ATBPref
Greyinvestor
18 May 2018
Topped up Small top up for me today.Directors can't buy due to the close period. Maybe they will after.Someone is going to get fried. I get the impression that there is a fairly heavyweight buyer out there, but it isn't buying enough to offset the shorters. At some point the shorters have to close out, and there isn't that much liquidity.One decent institution with balls could do really well on the buy side. The trouble is that only Woodford seems to have any.Yield closing on 8%. Fab.All my opinion, this is a heavyweight holding of mine. It's an income stock and, yes, I'm down a good bit. But I hope to stay in and earn a good yield. 97% occupancy is pretty blinking good.
coldascheese
18 May 2018
Re: So here we are at 272.... Well I have taken an alternative view and bought in today on the drop.My view is that the drop in price has gone to far and that NRR is undervalued as I see no reason for the price to have dropped to this low point and that we could well be in for a bounce.Next Thursday results will see who made the right decision.
PrefInvestor1
18 May 2018
Re: So here we are at 272.... Hi All,Well NRR made a positive start to the day, so I didnt sell straightaway but set a stop loss at 270. That stop loss has now been executed as this stock continues its steady slide towards the drain, down at 266 as I write this. No doubt it will recover strongly now, along with BT, as I have exited both.This is normal practice for me, I dont let stocks drop by more than 10% (including dividends received). If they do I sell. Objective is to stop a 10% loss becoming a 20% loss and then a 50% loss........... Failed to execute my strategy on BT and it cost me more than 10%, wasnt about to let that happen again.GLA Holders, I am out and glad to be so.Pref
Gooffy
18 May 2018
Re: So here we are at 272.... Perhaps put a stop on a bit lowerThe rights were bought much higher, retail just out not favour, not much good news about but then again the weather was awful.British Land was in doldrums a long time but recently had quite a rise, what's different with this share???Against Carillion was well shorted I have bought some more for income but only have a small holding, gets to 250 I will sell.
PrefInvestor1
17 May 2018
So here we are at 272.... Hi All,Decision time for me on this stock I feel, 8% down now dividends included. Having ditched my losing BT shares the other day the only other stocks that I have that are more than 5% down are VOD (already decided to average down there) and this one NRR. I could average down here as well, but I feel disinclined to do so. The stock seems stuck in a permanent downtrend (down again today when the FTSE was up 0.7%). No doubt not aided by the shorters - but no telling when they are going away, if they are the cause then they are being very successful !!.Yield is good here, but plenty of good yield elsewhere - and without the capital loss. Really not keen on the high retail flavour of this REIT either. So I think on balance I am probably selling tomorrow.ATBPref
devonplay
16 May 2018
Re: Stop limit approaching for me.... I’m sitting on the other side of the housing market. I have a near cash position with an intention to buy a b2l if we get a continuation of the recent drop in home prices.People are just moving less often, so avoid estate agents, and the potential for long term occupancy looks good locally. The yield isn’t great, but I like the comfort of predicable monthly rent.As usual, patience will pay a dividend.Which reminds me, it might be time to check and see how Landbay is holding up.DL
Greyinvestor
16 May 2018
Re: Stop limit approaching for me.... Forgot to say, I added CRST today! See the CRST board.........
Greyinvestor
16 May 2018
Re: Stop limit approaching for me.... Quite right, graph points down, until it doesn’t. I’m on the Woodford/Invesco side of the fence ie long NRR.In my view what matters is what NRR actually achieves as a business.If 50 year gilts fetch 1.5%, and NRR is getting 8% plus for it’s rental values, there has to be some room to make money. The real gap is probably more like 5% plus development gains of a few percent more. Good enough for a bricks and mortar business.A Hold/Buy for me.
PrefInvestor1
16 May 2018
Stop limit approaching for me.... Hi All,Shorters winning here methinks !!. Got an 8% loss warning limit set on this stock and thats not far away at 272. Beyond that and Im gone.CRST, MARS and CNA all getting hammered today. Still in profit on CNA so will hold for now. MARS going XD on 25/5 so might be able to pick that up for lose to 100, thinking about that. Not sure whats happened to CRST today. Must be pretty bad !. Trading update maybe, will check.ATBPref
