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You live in hope!
Jefferies raises Assura Group price target to 52 (51) pence - 'buy'
Plus, average debt maturity is in 5.5years. Hopefully part of the debt will be paid off and hopefully rates will start to come down. Markets obviously have a cautionary view on that
A company with a Flitch rating A- would get a better rate than that. Mortgages are just above 4% at the moment. Or business rates are higher than rates for residential mortgages?
Come 2023 assuming debt of 1.25b on average interest rate 5.5%, interest cost 68m versus current 28m.
How much are lenders charging companies with a similar credit rating? I would like to know how much earnings could be affected. 2030 is not that far out in the future (although rates may come down by then!)
Ps………weighted average interest rate at 2.30%
Re Assura’s debt profile, easily accessed from their last trading update and a debt profile that many REITS could only dream of with over 50% of debt maturing beyond 2030 and at the lowest interest rate………………..
Robust financial position and strong balance sheet
· A- (stable outlook) credit rating from Fitch Ratings affirmed in January 2024
· Weighted average interest rate unchanged at 2.30% (September 2023: 2.30%); all drawn debt on fixed rate basis
· Weighted average debt maturity of 6.25 years, no refinancing on drawn debt due until October 2025. Over 50% of drawn debt matures beyond 2030, with our longest maturity debt at our lowest rates
· Revolving credit facility refinanced as previously announced, increasing to £200 million, reducing the overall cost and adding sustainability-linked KPIs
· Net debt of £1,214 million on a fully unsecured basis with cash and undrawn facilities of £238 million
Assura not Asus
What are the typical interest rates on debt for companies with credit rating of A- (I think that's the Fitch credit rating for Asus)? I'm trying to figure out how much more Assura will pay in cost of financing at debt maturity, assuming rates stay the same. Assura at some point in the coming years will have to refinance some £2 billions pounds of long term liabilities.
Why did Assura added the losses from revaluation of asset to the operating profits?
The operating profit should be the cash inflow from operations, not from asset revaluation.
Hi All, comparing Assura to Primary Health Properties over 5 year period, they are very similar in terms of numbers i prefer Assura but are there any significant differences in terms of business model / strategy between the two, also can anyone explain the loss/write down Assura took in FY23?
A lot of REITs are struggling due the accelerated adoption of WFH since the pandemic lockdowns.
Offices just don't need to be as big now as hot desking can be implemented to save companies rent, rates and all the services charges, thats a problem for landlords and the income seekers that invest in office commercial property.
None of that applies to Assura who i am convinced will pick up when interest rates get cut hopefully back to ~3% in 2025
Picking out hot properties……..Assura mentioned as potential takeover candidate from todays’s Times.
Mergers between landlords are all the rage at the moment. Shaftesbury and Capital & Counties, which own a chunk of London’s West End, did it last year; LondonMetric and LXi Reit struck a deal last month; and now it is the turn of Tritax Big Box and UK Commercial Property Reit, the pair of warehouse owners.
The reasoning is fairly simple: to get bigger, which is what investors increasingly are demanding. Debt is much more expensive now and tapping shareholders for more money is a no-no, given that most landlords’ shares are trading at sizeable discounts to their net asset values. Merging with a peer is seen as the quickest and easiest way to add scale
There is an expectation that more deals will be done over the coming months, but who might be next? Andrew Saunders, a real estate analyst at Shore Capital, has had a stab. He thinks Warehouse Reit and Urban Logistics Reit, which between them own almost £2 billion of sheds, “could be in play in 2024”.
Most of the merger activity so far has focused on companies run by external managers, but Saunders reckons that does not mean “internally managed ones will remain exempt”. Among the “obvious candidates” here, he says, are Assura and Primary Health Properties, which own dozens of doctors’ surgeries and medical centres nationwide.
Perhaps the standout tie-up that Saunders thinks is possible is between Derwent London and Great Portland Estates, the two big London office developers.
I have never looked at PHP, relatively happy with Assura as a steady dividend payer.
All REIT investments have been hammered in the last 2 years.
However looking at 1, 3 & 5 year returns with dividends included PHP is a clear winner;
ASSURA -16.2% -30.98% 3.45%
PRIMARY HEALTH -6.89% -21.08% 13.47%
No harm in owning both I'd say if you wanted healthcare covered.
I don't think there is a great deal of difference PHP debt as of Sept.23 was £1277.1 million AGR as of Nov.23 was £1,195 million. They each have a mkt cap of around £1.35b
Rent roll PHP just shy of £150 million ; AGR £147 million. There are many other factors to consider though, so quite which is the better investment is up for discussion.
I'm not in PHP but have a decent holding in AGR.
Good luck with your choice gwm121.
Now that's a good question been thinking the same thing myself......Looks like Assure have more debt so I would lean more towards PHP
Any thoughts on which is better php primary health or assura pls and why.. chat not advice
Sue Noffke Fund Manager commentary on Assura……..
I'll start with a property company, and that's Assura And you won't know it from walking around in the streets, but it does GP patient practices. So, the facilities for NHS healthcare, the tenant is effectively the government and we know that there is huge demand for healthcare services in the community. They've got round about 600 or so practices in the UK, [they have] got a lot of development opportunities as well.
Now property has come under pressure as interest rates have gone up, but Assura has been fleet of foot in terms of its financing. So, it's got a strong balance sheet and it's not exposed to the rising interest rates. It doesn't have refinancing really until towards the end of this decade and it locked in some of the lower-cost financing that was available in recent years. So, I think that one, which is yielding 8% with good prospects, it's growing its dividends sustainably at 5%. Not super-exciting, but good enough. That is a really good holding to have in our portfolio.
AGR will benefit from falling inflation so here's to decent numbers tomorrow. GLA
49p is not that far off 44p (current price)
Berenberg reinitiates Assura with 'buy' - price target 49 pence
Build more properties?
its in the Trading Update 6th July
Continued strong track record of disciplined activity through first quarter
· Portfolio of 610 properties with an annualised rent roll of £145.3 million
· Two developments completed; our 100th development in Wolverhampton (as announced 29 June 2023) and our £22 million scheme in Kettering
· Completed one asset enhancement capital project (total spend £1.1 million); on site with a further nine (total spend £8.2 million)
· 55 rent reviews settled in the quarter, covering £5.5 million of existing rent and generating an uplift of £0.6 million
· Quarterly dividend increased by 5% to 0.82 pence per share, as announced at the full year results, with effect from the July 2023 payment
Does Assura have plans to build more properties?
Interest rate concerns have abated so risk on pop to 49p.
GLA