The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
To provide secure long-term performance through investment in long dated UK ground rents.
Find out MoreLondon South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Someone bailed this morning. Any news?
The liquidation should result in the sale of £120m of property assets (see Savills valuation), against which there is debt of circa £20m. There should also be cash accumulating from rental income. The current market cap is £40m, which looks a good buy if you are going to get £100m back in the next few years; as long as there are no building remediation horrors. The Annual Report indicates that this risk is reducing.
By my quick calculations a good outcome would see £1 a share returned over next two years. A bad outcome, with some significant remediation issues, would see 80 pence a share returned over the next five years.
Looks like a good bet to me.
?
There's also the question about whether leasehold reform will damage premiums for lease extension where the ground rent is deemed to be too large.
That said, I agree that the current price takes a lot of this into account.
GRIO is now trading at about a 33% discount to its adjusted NAV (based on the presumption that GRIO will have to meet all of its remediation costs and won't be able to recover any of its costs from tenants through higher rents over time). One has to wonder whether now is the Darkest Hour and whether it's time to buy again or run for the hills.
Schroders manage this fund.There are also largest shareholders.They seem to be dumping their holding.Two recent big sales.Annual results much later than in 2019.Obviously,they have Chinese walls in place.......
I have a very large portfolio of quarterly dividend paying shares. In practically every one, there are the doom and gloom merchants who predict the end of the world as we know it. The end of pubs, the end of shopping centres, the end for oil and gas. Yet companies like BATS and IMB go one year after year, decades after tobacco was known to be a major cause of cancer.
Try and find yourself a hobby, something that you can feel pleasure from. It really worries me the amount of people who seem suicidal about things that they have no reason to even care about. I am told painting by numbers can be therapeutic.
As for me, my portfolio has never looked so good. The yields after adding to holdings last March are fantastic. Happy days are here.
About time these were published? Delayed to re- assess NAV calculations?
Never will I be miserable about a share Im not invested in especially one that has dropped 50% Writing is on the wall for the sector, look at the sells, don’t listen to me. Remember your investment can go down as well as up. No guarantees any stock will make money.
Please don't spend your life worrying about companies that you aren't invested in, it will only cause you misery.
The company said it welcomes government efforts to work with industry and simplify the lease extension process but added that "any potential reform will need to ensure sufficient compensation for landlords to reflect their legitimate property interests"
So reform is on the cards, any GR speculator who bought after the 1993 act knew the possibility of enfranchisement by the leaseholders. They will find it very difficult to get the premiums they have been achieving. Like all stocks you can lose all your investment. I can’t see this ending good for current investors.
Ground Rents aren't really the bad guys though, they are working with Government and Commission to about bring change. Dividend isn't the best of course, but I can't see any point selling.
Can’t see any good reason to stay in ground rents investments, it looks like reform will hit this sector hard. This could be the next PPI with massive payments. Not looking good. We will see when all reports are out.
Agreed. Of course there remains heightened risks here due to leaholder reform and enfranchisement rights (ahould know more this month) but the more than 10% discount to NAV already reflects this and more.
Have a read of todays Investor Report. This isn't the evil company that many fear. It holds the leases mainly to student accommodation. 21.8 percent discount ! A small top up for me today. Dividend announcement any day now.
Highly-diversified, long-term portfolio of approximately 19,000 units across 400 assets
with a low default risk
Predictable revenue with upward-only rental increases, of which 70% of the portfolio
ground rent income is index-linked, predominantly to the Retail Prices Index (“RPI”)
Long-term income with weighted average lease duration of 345 years
...in recent weeks. Looks like the Govt has realized that changing the commercial terms agreed between two parties in good faith is an infringement of human rights. Expect this to keep drifting upwards.
Thanks stt1. The significant part of the article is this: "The price payable by a homeowner for the freehold of their house, or to extend their lease, is already governed by legislation which sets out a statutory formula that determines the price payable � for example, the price payable to buy the freehold of a house is regulated by the 1967 Leasehold Reform Act," Charlton said. "If a homeowner considers that the price being demanded is excessive, it can challenge the cost in the FTT." The wording of the government's response implied that it would amend the current legislation, which has been criticised as being "complicated, costly and time consuming", Charlton said. "If this is the case, it will need to consider the impact of such changes carefully," she said. "For example, ground rent portfolios have been an attractive long-term secure investment for pension funds, other institutional investors and the public sector alike." "Changes to the current statutory formulae and/or processes will almost certainly impact on the value of existing residential ground rent portfolios, even if they are ring-fenced and are not affected by the changes to the law. This is because this asset class may no longer be seen as an attractive and secure investment," she said." However, as the GRIO price is already down 20%, I think that this is already very much in the price. Index-linked gilts currently yield minus 2% (real). This Fund yields plus 4% real. Pretty attractive IMHO.
Ban on 'almost all' new leasehold houses in England to have retrospective effect, says government https://www.out-law.com/en/articles/2018/january/ban-on-almost-all-new-leasehold-houses-in-england-to-have-retrospective-effect-says-government/
First to post - lovely! Basically I think the world is in a difficult place, with risks biased to the downside whilst markets are at all time highs. Ground rents are extremely secure inflation linked investments, which are currently under a cloud due to recent press about exorbitant increases which has caused a 20% fall here. So, 10% discount to NAV, with inflation linked cash flows, all paid out to investors, equivalent to about 4% currently on an annual basis. I'm planning to build up a decent position here. I suspect in 5 years time, I will still probably be the only poster here, but let's see!!
One you missed at 100p. Nice to buy if there is a real scare!
I have done a fair bit of research on this and thinks its an excellent and safe as houses type of investment but waiting for a better buying opportunity as the spread is currently at over 3%. Any investor views would be welcomed
trade..bank in the middle..buy/sell...... 1
James Agar, Investment Director at Braemar, added: "Ground rents are rare within real estate in their ability to offer high yields relative to the level of risk. The current economic climate makes the defensive, secure and predictable characteristics of long dated ground rents very attractive to investors, particularly when looked at in the context of negative gross redemption yields on the sovereign debt of what are considered to be lower risk nations." "We are confident that our strong track record in acquisition and asset management in the sector will produce both attractive yields and long term capital growth."
Malcolm Naish, Non-executive Chairman of GRIF, commented: "GRIF is a publicly traded investment company that offers onshore exposure to the ground rents sector, which we believe is one of the most predictable sources of real estate income which is both secure and partly inflation hedged." "The Company has a well regarded property advisory team in the shape of Braemar Estates and a strong pipeline of opportunities, and we are extremely excited about its potential for income generation and capital growth."
Company Highlights · GRIF is a newly formed, closed-ended company, incorporated to acquire a portfolio of freeholds and head leases, offering: - the potential for income generation from ground rents that is both secure and hedged against inflation - the potential for capital growth from active asset management · Long dated UK ground rents have historically had little correlation to traditional property asset classes and have seen their value remain consistent regardless of the underlying state of the economy · Experienced Board appointed combining real estate and fund management expertise: - Malcolm Naish, former director of Real Estate at Scottish Widows Investment Partnership and has over 40 years' experience of working in the real estate industry; - Simon Wombwell, Chief Executive Officer of Brooks Macdonald Funds and a director of Brooks Macdonald Group plc; - Paul Craig, a Director of Multi-Manager at Henderson Global Investors. · GRIF's portfolio will be managed by Braemar Estates which has extensive experience, expertise and a long-term track record in ground rents and asset management; · It is the intention of the Company to distribute at least 90 per cent. of its income profits by way of quarterly dividends.