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Q4 will get the full impact of all the voids ,unrecoverable service charges .The Market Centre Crewe the company's main asset raely getsmentioned Shareholders are kept in the dark of the full impact on revenue of the voids,service charges Just a quick viewt hrough Jackson Crissand Creative Retial its diffcilut to establish how many are up for grabs
What is certain is that some newinitaives are needed to breathe in some life here
Well once again dividend day comes and goes and is really great in my opinion. A dividend is good but when it is excess of 7% then that is absolutely brilliant and this really must catch the attention of investors. I appreciate some people are more concerned with other aspects of the books but for me I bought in at a price I liked, I am receiving a great return on my investment and I just think RLE are one for anyone's portfolio if you like a decent return. When interest rates are still so low it makes sense (in my opinion) to look at obtaining a decent return. This is a share to give you all a very decent return if that is what you are seeking. Regards to all investors and those considering getting in to this share.
it's diffcult to understand how anyone can not find this situation disappointing.The largest single purchase which could have so easily been avoided if market aware with a sea of empty units to let and a management nightmare
Here is the current situation today:
Crewe Unit 6/7 Market Centre, 2,205 Rent £80,000 AVAILABLE
Crewe Unit 16/17 Market Centre, 2,860 Rent £80,000 AVAILABLE
Crewe Unit 18/19 Market Centre, 3,796 Rent £100,000 AVAILABLE
Crewe Unit 21 Market Centre, 835 Rent £42,500 AVAILABLE
Crewe Unit A Market Centre, 5,596 Rent On Applic. AVAILABLE
Crewe Unit 4/5 Market Centre 3,945 Rent £85,000 AVAILABLE
"This is one that just does not disappoint"
"What's not to like? "
You set the bar pretty low .
Well plenty not to like if you can look behind the current return and analyse the recent purchases they have recently made and the effect on the portfolio .
First and foremost. the rental income is in decline with voids mounting up which really won't become too apparent til this quarter . They are now having to sell the family silver ,breaking up the retail parades to make a book profit in a damage limitation exercise .
All those dividends really needed for capex to try and breathe some life into the old chestnuts
In no particular order ,plenty not to like about these purchases
MARKET CENTRE CREWE
This is disappointment with a capital "D" straying well outside their skillsets chasing yield . They should have never have bought it as unable to addd value .
Their largest single portfolio purchase .£20m in 2016 is beset with problems .
Just as the canny Scottish funds were moving out of retail .RLE come blundering in and should think current value is about £6m less than the purchase price .OUCH.
It's a centre in decline with voids ,a landscape of empty shops and unallocated service charges mounting up,.falling rental values.
The recent letting to Burger King doesn't touch the sides .They need to bring in some retail expertise to address the problem
and get to work on some improvements . This won't come cheap
OLDBURY BIRCH & BIRCHFIELD HOUSE
This one beggars belief .Right on Bond Wolfes'doorstep you would have thought they had a tenant in mind when buying an empty office building
However its been empty since the get go in 2015 . 6 long years The miistake compounded now N Power have vacated leaving 2 empty office buildings to let
Now showing a negative return on capital
COMMODORE COURT NOTTINGHAM
Another rogue purchase Empty Bathstore Unit and now relet the former Sainsburys store to a surgery at a considerably lower rent
TITAN HOUE TELFORD
Just the ground floor let and now the laborious job of letting floor by floor the remainder and clawback the income lost from Hewlett Packard not renewing the lease
REDDITCH
full of voids
WEST PLAZA
Replaced goldplated Premier Inn with a hotel operater who has an extensive ccapital works progarmme Lite on detail on theterms of the letting but you can bet your bottom dollar this involves a long rent free period or rental adjustment to reflect the cost
Meanwhile their peer group have stuffed their portfolios with logistics and industial properties enjoying a field day
We are indeed almost there once again!!!! This is the gift that keeps on giving. My average is now 41p and this share is just excellent at adding to the coffers. I have used this to generate a decent return on my future pension and this is one that just does not disappoint. All views aside surely in this day and age anything generating a return in excess of 3/4 or 5% must be looked upon in a positive light. Well here we have a share generating in excess of 7% in returns so here we go again - What's not to like? Now as for the word "squidgen" it works for me though I might not be able to use it in scrabble I can still use it in conversation. As always good fortune to all RLE investors and to those considering making the move in to this share all I can say is do your research, look at the returns and if it is good for you get in here. One of the best investments i have made but then I do like the idea of getting a decent return on my investment and this certainly provides that. May your gains always exceed your losses . Rgds as always to one and all
... and we are nearly there again. Made a nice little top up this morning that isn't showing, brought my average down a squidgen more. (yes I do know it's not a real word).
On a positive note they have got a few bits and pieces away and likely to get rid of some moresmall individual shops investments n months to come but its all fiddling at the edges.
At least it gives them a bit of a warchest and some decent tranasactional fees for Bond Wolfe !
In addition manged to stave off the serious damage inflicted on West Plaza by Premier Inn breaking their lease by securing a new operater
So well done there.In usual style however detail lite on the terms of the deal .rent, rent free period,capital incentives
Unlikley to have matched Premier Inn otherwise that would have been shouted from the rooftops
They never dwell on Crewe on what its going to take to get this centre performig Its in dangerof having tumblweed blowing through
Rental income has plunged (maybe sacrificed rents for longer WAULTs)and although satisfactory fundig the LTVs are still way too high.
There is always a story behind the lines at RLE
"Commodore Court, Nottingham where we have successfully achieved a new 10-year lease to an NHS affiliated tenant that specializes in eyecare, which was previously a large local supermarket, in doing so we have achieved rental levels significantly higher than previously anticipated."
Although teh rent paid isignificanly lower than what Sainsburys were paying and the unit formerly occupied by Bathstore is still avaialble -but heh ho we don't want to hear that do we?
https://www.rightmove.co.uk/commercial-property-to-let/property-85867442.html
Selling a few bits and pieces is all very well but unfortuantely doesn't mitiagte the damge at their largest single asset Crewe
Its looking very grim there indeed with a whole load of unallocated service charges to fund The list is growing . That £20m purchase now looking very expensive indeed
Crewe Unit 6/7 Market Centre, CW12 2NG 2,205 Rent £80,000 AVAILABLE
Crewe Unit 16/17 Market Centre, CW1 2NG 2,860 Rent £80,000 AVAILABLE
Crewe Unit 18/19 Market Centre, CW1 2NG 3,796 Rent £100,000 AVAILABLE
Crewe Unit 21 Market Centre CW1 2NG 835 Rent £42,500 AVAILABLE
Crewe Unit A Market Centre, CW1 2NG 5,596 Rent On Application
Crewe Unit 4/5 Market Centre, CW1 2NG 3,945 Rent £85,000 AVAILABLE
This purchase was a huge mistake
Yet another one is the chunky Birch & Birchfeld House at Oldbury Having failed to find any tenants for 5years for one of the buildings they have now put them both up for sale
Bond Wolfe describe them as"investments" yet they are office buildings being offered with vacant possession
One can only hope they prove to be a better investment for someone else than they have been for RLE shareholders!
RLE have been busy casting their eye over the portfolio to identify any asset which might achieve a book profit .
Bond Wolfe are currently busy breaking up the shopping parades at A****s Green & Bearwood marketing individual shop investments
Looking to satisfy private investor demand for smaller lot sizes under £1m and turning a profit
Nothing wrong with that of course (in theory)
The sum of the parts is greater than the whole
Indeed they could continue that theme to their retail holdings in Leamington
However cherry picking anything that is currently saleable, once its gone its gone and you are left with the rump which is less attractive and less valuable
We all know how this exercise is going to read
"RLE are pleased to announce that they have sold £12m worth of kit at an average of 9% over book value. This has been especialy pleasing as its been a challenging market and reflects how resilient the Midlands market has been etc"
Stoney silence on assets like Birch and Birchfield House where its almost impossible to value. The value of Birch House alone when the NHS left this year almost certainly evaporated by a £1m + bearing in mind Birchfield House next door has been empty over 5 years
hxxps://www.expressandstar.com/news/local-hubs/sandwell/oldbury/2017/09/30/npower-offices-in-oldbury-up-for-sale-for-6-million/
Marketed as an income producing investment at £6m in 2017 with a hope that the NHS might renew the lease which failed to sell
Today with vacant possession maybe £3.5m if there was any owner occupier demand
The share that keeps on giving whilst the revenue keeps on falling although you wouldnt know it Some massive voids to fill
Shop rents in Walsall have fallen off a cliff so there will be some serious renegotiation there on lease expiries
Crewe thats another huge damage limitation exercise Oldbury West Bromwich Leciester
At least Tunstall would be saleable
Fair play to you you are a forgiving lot
Seems like only yesterday since the last dividend but here we are once again. The share that just keeps on giving. May good fortune continue to shine down on current investors and future investors alike. At the end of the day we all want to make a bit of money and in my opinion this is one of those shares that does just that. DYOR but I for one am glad to be in RLE.
Real Estate Investors PLC - Midlands focused investment trust - Completes eight asset disposals in first half of 2021, totalling GBP10.7 million, an aggregate uplift of 10% on December 2020 book value. Notes pipeline of disposals worth GBP5.5 million. Plus "strong" rent collection of 97% in the first half. Occupancy rates at 83%, possibly rising to 88% in near-term. Issues interim dividend of 0.75 pence in first quarter of 2021.
"Occupier demand is beginning to strengthen across the market place, with decision makers less cautious and naturally eager to move forward after a uniquely challenging 18 months. We have a healthy pipeline of new lettings on our void space, which is expected to improve our occupancy levels and support our valuation recovery," the company says.
Current stock price: 39.71p, down 3.2% on Tuesday afternoon
Year-to-date change: up 17%
By Scarlett Butler; scarlettbutler@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
"Strong Rent Collection for H1 2021 of 97.22% (adjusted for monthly and deferred agreements)"
Again failing to spell out the figures or actual amounts which ahve been deferred so the 97.2% is meaningless .Kicking the default can down the road
No mention of current rental income and the huge impact of the voids or cuts in rents on lease renewals
Now come clean about the voids Npowerand Premier inn but fail to spell out the huge impact on loss of rent
"We would normally have seen these units re-let earlier "
Priceless as the other office building at Oldbury adjacent to Npower has been empty since they bought it in 2015 6 years ago and now the other one empty
Titan House has been empty for years and now in a damage limitation exercise as they have let the best bit the ground floor.
They will be struggling to fill the rest and devalued the investment from when it was in single occupancy
"We have completed 8 asset disposals totalling £10.7 million, an aggregate uplift of 10.3% on December 2020 book value.
How much did they diminsh those individual assets in advance of the sales ?
Ther Rugeley sale was a country mile below asking price
No mention of whether the portfolio hasbeen devalued
The future for Crewe is likley to take shape in the form of the Peveril Securities Royal Arcade close by where revised plans have recently been unveiled.
This is unlikely to benefit the Market Centre in the future. What are RLE going to be able to do to fill these voids without massive inducements
The non recoverable service charges must be horrific .They certainly will need to buy in some exspertise to assist
Hmm, filters not working today on LSE. Maybe the future for Crewe will be when the Government start spending billions on new projects. Lots of spare, unwanted land available for a new prison, houses and hotels for drug addicts, homeless etc, and a massive immigration centre to process our friends from overseas. All in a nice central UK location, handy for the M6, but not too close to major cities. Where will they find spare land, empty buildings etc ?
Still no signs of any life at the Market Centre Crewe All that good work sorting out the new Burger King blown by the voids
The decision bySainsburys to close the Argos down a bitter blow
Unit 6/7 Market Centre, CW12 2NG 2,205 Rent £80,000
Crewe Unit 16/17 Market Centre, CW1 2NG 2,860 Rent £80,000
Crewe Unit 18/19 Market Centre, CW1 2NG 3,796 Rent £100,000
Crewe Unit 21 Market Centre, CW1 2NG 835 Rent £42,500
Crewe Unit A Market Centre, CW1 2NG 5,596 Rent On Application but £100k pa previously
Shedload of non recoverable service charges
Well if you ignore the deterioration in the capital value of the portfolio and reduced revenue maybe the words" Good all round share and a steady income." might ring true
The fact remains that legacy issues will impact from their foolish entry into prime retail .Some very grateful Scottish funds for RLE picking up their assets in Walsall and Crewe where tenants will be rengotaiting rents on lease renewals and voids to fill which will need to be heavily incentivised .
Apparentally the ground floor of Titan House Telford is now let . HP lease expired last October but the building had been e mpty for sometime .
Damage limitation exercise .That means the chance of a single occupant gone ,devaluing the investment Now the thorny issue of letting the more difficult upper parts, piece by piece
Adv11, Share price has done well over the last few months and the impressive dividend is regular as clockwork. This is one of those shares that you really must hold. Good all round share and a steady income.
Money in the bank yet capital values falling and losses crystallised on recent retail sales .Noticeable that Bond Wolfe have taken down their Twitter account since they were caught out pedalling the deals at Walsall and Aldridge as profitable.
The LTVs must be looking a bit thin .They won't be drawing any comfort either from their retail holdings in Walsall that the recently completed scheme by St Modwen at the Quardant close by which includes retailers B&M and Poundland is currently on the market for a juicy yield of 14% yield
Meanwhile back at the ranch these voids are waiting to be filled and all those unallocated service charges .
Enjoy those dividends!
0.75p Fully covered. Money in the bank. RLE puts bigger property companies to shame.
Yes, all is good. I got my average down to 43p so not far to go.
Adv11, It is good to see a steady increase as always. An once again dividend day is fast approaching. The share that keeps on giving.
I guess the CEO deserves a big shareholder thank you by straying outside areas of expertise and loading up the portfolio with some old chestnuts where the cold winds of voids are blowing right through
Dumping his West Plaza into the company at a smokey £9m
Missing out on all that action in the industrial property arena
Selling properties via Bond Wolfe and Bond Wolfe Auctions creaming off fees at prices substantially they been trying to sell
at and presenting those sales at success stories
Mind you, I did forget that to some people, it will always be "the end of the world".
https://www.youtube.com/watch?v=6JWotX1ymGQ
Yes shareholders enjoying an SP rise here
Maybe Bassi et al are thinking of taking this private . Certainly save a bit of face at the gaping voids which have appeared in the portfolio of properties recnetly purchsed which I guess wont hit home til H2
They could certainly do with letting some of the space in the 2 empty buildings at Oldbury Maybe we can see a family member appearing as Bond Wolfe Hotels to take up the space voided by Premier Inn