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SREI - the next to look anomalously cheap...

SKYSHIP
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Re: SREI - the next to look anomalously cheap...

#478315

Postby SKYSHIP » February 3rd, 2022, 2:04 pm

The Q4'21 stats are keenly awaited by SREI followers.

All around in the sector are posting NAV increases of 7%/8%/9% - BREI actually posted an increase of 10.4%!

As a comparator I've taken a look at SLI's stats this week - they showed an 8.5% rise in NAV.

Let's look at the stats for SLI v. SREI

........SLI........SREI
QI....+4.0%.......+2.7%
Q2....+3.5%.......+4.1%
Q3....+5.4%.......+4.6%

Q1-3..+13.5%......+11.9%

So SREI's rise in 1st 3 quarters = 88% of that recorded by SLI

If we get 88% of SLI's figure for Q4, SREI NAV will rise 7.5% to 70.7p

Viewing recent returns elsewhere I'm increasingly of the view that we will see 69.4p or more.

At 55.2p - given 69.4p NAV; discount = 20.5%
At 55.2p - given 70.0p NAV; discount = 21.1%
At 55.2p - given 70.7p NAV; discount = 21.9%

Couple the discount with the 5.3% yield......still more to go for in SREI.

Gerry557
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Re: SREI - the next to look anomalously cheap...

#478725

Postby Gerry557 » February 5th, 2022, 11:09 am

I added some more of these friday morning and was updating the dividend info on my spreadsheet and strangely the quarterly payments are now July and Aug. Not very well spread out.

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Re: SREI - the next to look anomalously cheap...

#478729

Postby Dod101 » February 5th, 2022, 11:31 am

Gerry557 wrote:I added some more of these friday morning and was updating the dividend info on my spreadsheet and strangely the quarterly payments are now July and Aug. Not very well spread out.


I know very little about this trust but dividend payments in July and August look extremely unlikely. Are sure that these are payment dates?

Were I to buy into this trust I would want first anyway to see a couple of years of Annual and Interim Reports. Going to the website, it appears to be one of those composite ones so loved by the big fund managers and so I need to try to identify stuff relating to SREI itself. Very difficult and when I click 'Latest Annual report I get the Report to 31 March 2019.

I like Schroders as an investment house but they really need to do something about their website.

Dod

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Re: SREI - the next to look anomalously cheap...

#478779

Postby Gerry557 » February 5th, 2022, 2:59 pm

Hi Dod

The dates were taken off the fact sheet. I've held them for a number of years and normally they were more equally spaced out.

https://www.schroders.com/en/uk/adviser ... investors/

Scroll down to quarterly factsheet.

The annual reports exist, I've read them, normally from the rns announcement but might be available from other sources such as HL or mornings tar but keep scrolling the link to find them all as far back as 2009.

I can believe Schroders website leaves a little to be desired they are not the only one. Sometimes I think its deliberate.

I sold UKCM to buy this top up and one of the factors in the sale was the poor website and lack of up to date share holder information. Like you I like to peruse the reports and access the presentations. Good luck finding theirs from their own website. They reported last week but not available :evil:

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Re: SREI - the next to look anomalously cheap...

#517523

Postby SalvorHardin » July 27th, 2022, 8:18 am

Schroder REIT has just announced:

1) a share buyback programme

"Following recent transactions the Company has cash of £16.4 million and a net loan to value of 29.0% as at 30 June 2022. The Company also has undrawn revolving credit facilities of £28.7 million. As a result of this strong financial position, the Board and Manager believe that investment in the Company’s shares at the prevailing price and discount to net asset value offers attractive value for its shareholders. The Company therefore intends to recommence its share buy-back programme from its own resources."

2) a net asset value of 79.1p per share as of 30th June 2022 (up 4.4% since 31st March 2022)

"NAV increased by 4.4% to £388.6 million (31 March 2022: £372.2 million) and the NAV total return was 5.4%."

3) a dividend of 0.803p payable on 19th August, ex-dividend 4th August (all of it is a PID)

The share price is 53.8p as I type this.

https://www.londonstockexchange.com/news-article/SREI/share-buyback-programme/15557771

https://www.londonstockexchange.com/news-article/SREI/nav-and-dividend-for-quarter-to-30-june-2022/15557698

So far, Investegate has only reported the RNS for the share buyback

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Re: SREI - the next to look anomalously cheap...

#518856

Postby brightncheerful » August 1st, 2022, 5:11 pm

Glance at the portfolio and only one i reckon any good and that is not 100% ownership - Bloomsbury office building. Also SREI based in Guernsey not an a selling point. Not being able to use the cash to add to the portfolio doesn't say much for the managers unless they regard their existing portfolio as the benchmark for new purchases in which definitely doesn't say much for the manager. Al in all, the substantial discount to nav is deserved.

On an sp and divi yield comparison, NewRiver REIT is in my view a better bet.

DYOR
BnC

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Re: SREI - the next to look anomalously cheap...

#519044

Postby Gerry557 » August 2nd, 2022, 9:55 am

brightncheerful wrote:Glance at the portfolio and only one i reckon any good and that is not 100% ownership - Bloomsbury office building. Also SREI based in Guernsey not an a selling point. Not being able to use the cash to add to the portfolio doesn't say much for the managers unless they regard their existing portfolio as the benchmark for new purchases in which definitely doesn't say much for the manager. Al in all, the substantial discount to nav is deserved.

On an sp and divi yield comparison, NewRiver REIT is in my view a better bet.

DYOR
BnC


I looked at NRR while back. Too much retail and debt so if the SP has fallen it might be the reason the yield is higher. Hopefully management have taken steps to address issues. Im not sure you can compare SP anyway discount maybe

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Re: SREI - the next to look anomalously cheap...

#519366

Postby SKYSHIP » August 3rd, 2022, 8:34 am

bnc - a rather bizarre post above. Did you really look at their whole portfolio of 43 properties. I suspect not.

Yet you choose to favour their one central London property.

Their website not good, but both there and in Annual Reports you can research what you need. Some pretty plum
industrial estates and retail warehouse parks; but if not your thing then look elsewhere.

Incidentally you will find that CI registration is fairly common for tax reasons.

That cash to which you refer represents under 4% of asset valuation - so no big deal.

You then suggest NRR. Well, given their calamitous history, a higher yield certainly warranted.

As I said at the start - all in all a pretty bizarre post!

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Re: SREI - the next to look anomalously cheap...

#519369

Postby BullDog » August 3rd, 2022, 8:45 am

SKYSHIP wrote:bnc - a rather bizarre post above. Did you really look at their whole portfolio of 43 properties. I suspect not.

Yet you choose to favour their one central London property.

Their website not good, but both there and in Annual Reports you can research what you need. Some pretty plum
industrial estates and retail warehouse parks; but if not your thing then look elsewhere.

Incidentally you will find that CI registration is fairly common for tax reasons.

That cash to which you refer represents under 4% of asset valuation - so no big deal.

You then suggest NRR. Well, given their calamitous history, a higher yield certainly warranted.

As I said at the start - all in all a pretty bizarre post!

Thanks. What's your preset assessment of SREI?

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Re: SREI - the next to look anomalously cheap...

#519418

Postby Gerry557 » August 3rd, 2022, 11:16 am

Isnt the cash partly being used for the buyback?

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Re: SREI - the next to look anomalously cheap...

#519506

Postby brightncheerful » August 3rd, 2022, 3:07 pm

Did you really look at their whole portfolio of 43 properties. I suspect not.


As it happened, I did look at their whole portfolio, I am used to appraising commercial property investments.

Sorry to say this, especially might sound offensive but imv SREI's portfolio and how it is presented on the website is the sort of thing amateur investors are impressed by.

As for NewRiver I'm not convinced its portfolio is as wonderful as promoted but at least the divi yield is higher.

The 30% or so discount to last reported nav currently available with propco shares are in my view indicative of the shareholding market having come to its senses. The higher the property yield the less likelihood of any rental and/or capital growth. Perhaps some - from active management - in the short term - seller dangling a carrot to attract a buyer - but long-term in gradual decline.

--

The only propcos I have shares in currently are DLN and CDFF. (Just checked CDFF, the number of shares traded 4, the sp has gone up £0.85 !)

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Re: SREI - the next to look anomalously cheap...

#519542

Postby Gerry557 » August 3rd, 2022, 5:22 pm

brightncheerful wrote:
Did you really look at their whole portfolio of 43 properties. I suspect not.


As it happened, I did look at their whole portfolio, I am used to appraising commercial property investments.

Sorry to say this, especially might sound offensive but imv SREI's portfolio and how it is presented on the website is the sort of thing amateur investors are impressed by.

As for NewRiver I'm not convinced its portfolio is as wonderful as promoted but at least the divi yield is higher.

The 30% or so discount to last reported nav currently available with propco shares are in my view indicative of the shareholding market having come to its senses. The higher the property yield the less likelihood of any rental and/or capital growth. Perhaps some - from active management - in the short term - seller dangling a carrot to attract a buyer - but long-term in gradual decline.

--

The only propcos I have shares in currently are DLN and CDFF. (Just checked CDFF, the number of shares traded 4, the sp has gone up £0.85 !)


As you are used to appraising commercial property investments, do you mean the individual properties on the book or the company accounts?

I dont follow NRR and whilst the yield might be higher is it covered? According to HL for 2022 Basic EPS 2.3p and Divi 7.4p. Im sure if you know it much better there is probably some context to better explain those figures. I think SREI's was 104% covered and they expect income to rise again shortly.

Whilst I like a high yield it not the only metric that matters. Debt levels, debt costs, voids, pipeline, next break times. there are many other factors including discounts.

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Re: SREI - the next to look anomalously cheap...

#519677

Postby SKYSHIP » August 4th, 2022, 7:36 am

bnc - you state "Sorry to say this, especially might sound offensive but imv SREI's portfolio and how it is presented on the website is the sort of thing amateur investors are impressed by."

Yet again not entirely sure what you're getting at. Please advise why the disdain for the industrial estates and retail warehouse parks shown on the video links:

https://www.schroders.com/en/uk/private ... ent-trust/

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Re: SREI - the next to look anomalously cheap...

#519698

Postby Gerry557 » August 4th, 2022, 9:07 am

brightncheerful wrote:
Did you really look at their whole portfolio of 43 properties. I suspect not.


Sorry to say this, especially might sound offensive but imv SREI's portfolio and how it is presented on the website is the sort of thing amateur investors are impressed by.


Can you link to some that in your view are not just to impress amateur investors or set "the standard"

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Re: SREI - the next to look anomalously cheap...

#519748

Postby brightncheerful » August 4th, 2022, 11:18 am

Gerry557 wrote:
brightncheerful wrote:
Did you really look at their whole portfolio of 43 properties. I suspect not.

Sorry to say this, especially might sound offensive but imv SREI's portfolio and how it is presented on the website is the sort of thing amateur investors are impressed by.
Can you link to some that in your view are not just to impress amateur investors or set "the standard"


Derwent London - https://www.derwentlondon.com/propertie ... r-holdings

Land Sec: https://landsec.com/properties?showTable=1

---

In my opinion, what I describe as /money-spinning' REITs, ie companies launched as a REIT to begin with as distinct from conventional property companies that have converted to REIT, are designed to cater for the directors and manage(s)r. To attract investors, the presentation is carefully phrased to tick all the boxes and plausible excuses/reasons are proffered during difficult markets. SREITs div record is not upward only.

The calibre of commercial property that such REITs buy is often nothing special but it is made to sound special to overcome any feeling that the REIT has overpaid. Provincial industrial estates for example are traditionally high yielding and if it were not to a national surge in industrial rents in recent years likely the rental growth would be flat.

As a rule, the higher the rental yield the lower the potential for capital growth. A commercial property investment is a depreciating asset which requires rental and capital growth (capital growth is not necessarily. a product of rental growth: it is also a reflection of yield compression) to at least counter-act and hopefully exceed the rate of depreciation. Break clauses are not necessarily indicative of high risks, many tenants require break clauses for negotiating purposes at the rent review.

Having looked at SREI property videos I do not understand why necessary to have a musical accompaniment. Perhaps someone could explain.

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Re: SREI - the next to look anomalously cheap...

#519763

Postby Gerry557 » August 4th, 2022, 11:41 am

Thanks for the links, Ill take a look but being side tracked by the one with Brighton marina after calling into port there on a sailing trip.

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Re: SREI - the next to look anomalously cheap...

#519820

Postby Gerry557 » August 4th, 2022, 2:38 pm

brightncheerful

Im not sure what to make of the links or what you think needs to be in the information or maybe its just me and what "I" deem important to "me"

The landsec one is just a list or map view but doesnt really tell you anything of note. Again the detail might be in the annual report which I haven't read. Its also a few months old or was this the last transaction date Im not sure. I had a quick skeg at a property transaction RNS on the website 12 May 22. Doesnt give you any meaningful details, sold for £195m. For all I know they may have paid double.

I liked the Derwent London one much better. It gives a bit more detail on the properties. I note that has music on its videos too. If you dont like music it must be a bummer but might be more professional than say wind noise. They are at different scales of the market and you would "expect" a billion pound company to have a better website than a smaller cap.

Still looking at the 1year and 3 year charts SREI seems to come out on top. Dividends might change things slightly I've not looked. SREI did rebase their dividend and took on new management who seem to have got a better grip on things and the dividend has been rising post covid and is at pre pandemic levels. This cant be said for all REITs. What about the ones you own?

Still when I initially bought the dividend was much higher but I knew it wasn't covered and that there would be some sort of change either a cut or SP fall but at the price there was a margin of safety.

I just clicked on the SREI site, I dont mind the video's. Strangely it didnt list all the properties just the top 10 or maybe I missed it. I dont normally spend time there so I may have seen it in the reports but I will trade a mediocre website for better financial metrics.




.

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Re: SREI - the next to look anomalously cheap...

#520111

Postby Gerry557 » August 5th, 2022, 2:32 pm

@brightncheerful

Im answering my own question on DLN's dividend. Apparently it has risen the past 5 years which is good but its a low yield and even after the drop in SP its still only 2.8%.

I do like the low voids, rising dividends (paid Jun + Oct) and 21% LTV
I dont like the low yield or the London concentration. I suppose these could be offset by buying something else.

@Dod101
Dod I note the payment dates for SREI have been updated more like normal. I wonder if boy Friday who did the old factsheet has been let go or promoted?!!

On the plus side SREI has now earned me another dividend.


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