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This has nothing to do with office blocks, which are an avoid for me in general. I think SREI has some offices but they are not blocks, and have been super revamped with everything green credential, and the rents increased due to demand.
AIRE - portfolio of 19 commercial long-leasehold and freehold properties. The portfolio includes care homes, hotels, student housing, nurseries, car showrooms and petrol stations.
WEbsite is good, with map and details of all properties
https://www.alternativeincomereit.com/portfolio/our-properties/
One slight word of caution...
In parts of the US office blocks are sitting empty because everyone is working from home.
Some are now being converted into residential apartments.
Exactly buy and hold. Not for trading. Might get gobbled up..
I also like SREI. Any other good ones you like?
Tyma. Doesn't help that it's such a tiny trust. I tend to hold these type of investments long term so the spread doesn't matter so much
Just tried to buy some but the size of the spread makes it unattractive.
10% drop from the high-point 6 weeks ago.
I'll hold for the yield and hope the SP rebounds...
Next div 1.425pps. Xd 15 Feb 24. Pd 1 Mar 24.
Rgds, S
Divi based on previous payouts. Plenty of similar or better NAV discounts out there. I'm holding but not inclined to buy more
Not sure when the next dividend is due, but at least this pays a decent one!
Now trading at c.19% discount to NAV.
That's a big discount !
Divi due this month?
Yes, I think the recent strong rise assumed interest rates had peaked.
I would say the interest rate news has caused the drop.
European stock markets drifted more decisively lower on Tuesday as hopes for a rate cut by the European Central Bank diminished following some hawkish comments from policymakers, whilst data confirmed German inflation rose in December. The Dax slipped about 0.7 per cent while the FTSE 100 fell 0.6 per cent. Several monetary policy hawks from the European Central Bank circled, and delivered a clear message in concert – this was no coincidence so the market is taking it seriously.
Joachim Nagel, president of the Deutsche Bundesbank, said it was “too early to talk about cuts” because “inflation is too high”, while his Austrian counterpart Robert Holzmann told CNBC: “I cannot imagine that we’ll talk about cuts yet because we should not talk about it. Everything we have seen in recent weeks points in the opposite direction, so I may even foresee no cut at all this year.”
Down 6% now. All I can see is a near - 10% drop at Motorpoint, which represents about 8% of AIRE's rental income. That seems to have come after the AIRE drop though so probably nothing to do with it. Mystery for now...??
Would anyone like to comment on why the bid price has dropped by more than 4% today with no adverse news?
...and some more today !
That's it for me now - this has done wonderfully well of late but nothing goes up for ever.
Yield is still >8% and trading at a discount to NAV of about 12% so there's still support.
Yep - sunk a bit more hard-earned here.
This does seem to be heading in the right direction. Not sure if I'm confident enough to invest some more but I'm thinking about it!
Added a few more - continuing to edge up.
Yield >9%
Trading at a large discount to NAV, and should continue to edge up especially if interest rates have peaked.
Alternative Income REIT PLC - London-based investor, which specialises in alternative and specialist real estate sectors such as hotels and healthcare - Says net asset value at September 30 fell 0.7% to 83.6 pence per share from 84.2p at June 30, while NAV total return was 1.6%, down from 2.4% in the previous quarter. Declares an interim dividend of 1.425p per share and targets a 5.9p dividend for the year ending September 30, 2024, up 3.5% from 5.7p a year ago.
Generally a pretty decent property portfolio. I'm a bit concerned about the gyms and motor dealership being affected by belt-tightening though
The thing that stikes me the most is their loan to value is not that high. Yes rates will hit you abit
But if you have low ltv not that much. Factor indexing in leases and it looks quite good
I don't see anything new and/or concerning in the update, apart from fair value adjustments. It looks like an attractive, covered yield.
Hi BritR, Thanks for taking the time to post an insightive reply to my post. I totally agree with your views on this share going forward. Companies are increasingly seeking a return to work for staff and I don't see properties being given up. Ongoing rent reviews will hopefully keep AIRE on it's toes and hopefully leads to an increase in their property portfolio. Given current value and dividend return I am more than happy to increase my holdings in this company. Looking at this sector and seeing how share values are predominately way lower than NAV I would not be surprised to see some consolidation within the sector. Overall like you say the dividend return is certainly not a bad way to build up your tax free allowance within your ISA. Wishing you well with your portfolio, may your gains exceed your losses and thanks for posting. By the next dividend let's hope the price has risen and we are all wealthier!!!! Look out for my post on AIRE in 3 months lol. Rgds, S
Hello Saintly,
I would say this is a good opportunity given the current conditions. Main thing to focus on is how many times does the operating profits cover interest cost with the first half profits of £3.5m covering interest costs of £0.71m almost five times.
The £41m loan facility with Canada Life Investments is repayable in October 2025 and has a low 3.19% weighted average interest rate. I would expect this to be refinanced but the big question is at what rate, maybe 5%?
The three interim and final dividends cost £4.9m.
There are a lot of rent reviews due later this year so hopefully good increases to be had. It is key that the dividend is maintained at this level at least and doesn’t go backwards, therefore I think rent increases from this point should offset a greater interest cost when the time comes to refinance the debt facility.
Not bad to buy a share which yields 10% at the current price and has an opportunity to increase. There is also a margin of safety built into the current share price, as one the share trades at a large discount to NAV and two the yield of 10% has a buffer of 5.5% against a 10-year Uk gilt at 4.5%.
Remember the price action of the stock tells you very little and has nothing to do with value.
Say in 5 years this share could be yielding 15% return on your money invested. Not bad in an Isa and it’s a tangible return as its in cash.