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sain, you don't think they should carry on doing what they're doing, but you don't think they should wind up the Trust and give us our money back either. What do you want the Board to do?
For example Wetherspoons who are paying RLE £97,500pa in Redditch,their anchor tenant have put it up for sale Lease expires March 2024 so that has wrecked the value of that
https://www.birminghammail.co.uk/whats-on/food-drink-news/redditch-dead-locals-react-wetherspoons-25125991
RLE have had a good run breaking up the retail parades this year but that is now run out of steam. Recent interest rate rises have put pay to that. Let's hope they managed to get a few of those under offer over the line a few weeks back.
Their policy of shifting kit at above book to clear a small profit has worked well The prospects of continuing that theme has just disappeared over the horizon with its backside on fire .
"I'm sure it's not lost on him that liquidating the company could leave him with over £6m" If you think they could shift the majority of the kit without a substantial discount to book in the current market think again .
Their largest asset the Market Centre Crewe which they acquired forashuddering £ 20m in 2016+costs Sold a chunk of the car park earlier this year so lost car park income for a small capital gain on sale of the new Burger King
They have kept very quiet about the write down here suspect its sitting there in the books at about £14/15m They would be lucky to get £11m today
Its a very tough time to go bottom fishing right now but I agree RLE may be a very good candidate in this sector.
...and down we go again. I'm seriously considering increasing my holding here specifically in anticipation of a breakup and asset sale. £123m net worth divided by 180m shares in circulation equates to c. 68p per share if the Trust is liquidated. I'll take that, thank you. Wonder if the auditors will be pointing this out as part of their sign-off responsibilities?
I had the same thought...
Paul Bassi appears to be holding over 12m shares here, present value around £3m
I'm sure it's not lost on him that liquidating the company could leave him with over £6m
Food for thought as the longer, colder nights come round
It's been a rotten few months for investors, as you say there are gaps everywhere. But this one has just become ridiculous. It's literally worth twice as much dead as alive. I think it's time to liquidate the assets and give us our money back, sadly. There are plenty of other places to invest with decent dividends where the share price hasn't dropped to 50% of the asset value.
Many of my investments, for some reason, show similar characteristics but no-other has such a vast discount between mark 2 market and share price.
So the portfolio is worth c. £190m, less £75m debt = £115m. Cash at bank c. £8m = £123m.
The market value now stands at c. £56m, in other words less than 50% of the company's worth.
It's time to take a leaf out of Terry Smith's book with FEET, call it a day and sell off the assets.
We would more than double the value of our holdings.
Successfully breaking up the retail parades at Smethwick. Kings Heath and A****s Green. Nothing wrong with that as they need to pop LTV under 40 % but not achieving a fat lot having devalued the stock for book purposes managed to get a gain
NAV gain by revaluation
Few more to get through the door by Xmas and then running out of steam and that will leave them with a rump of scattered properties
They are trying to shift a number of the office buidings which might prove to be bit more sticky although 1 of the empty office buidings at Oldbury is under offer which looks liketheonly real opportunity to add any value e
So nothing bought to add value its just the hard slog of letting the voids
They never mention the vacancies at Crewe Until they get to work on that they wont see 90% occupancy again . All that unallocated service charges draining away
Crewe Unit 6/7 Market Centre, Crewe, CW12 2NG 2,205 Rent £80,000 AVAILABLE
Crewe Unit 16/17 Market Centre, Crewe, CW1 2NG 2,860 Rent £80,000 AVAILABLE
Crewe Unit 18/19 Market Centre, Crewe, CW1 2NG 3,796 Rent £100,000 AVAILABLE
Crewe Unit 21 Market Centre, Crewe, CW1 2NG 835 Rent £42,500 AVAILABLE
Crewe Unit A Market Centre, Crewe, CW1 2NG 5,596 Rent POA AVAILABLE
Crewe Unit 4/5 Market Centre, Crewe,CW1 2NG 3,945 Rent £85,000 AVAILABLE
Sushi - So if we bought at this low price (which I recently did) does that in itself not mean I am achieving a higher yield and my average is even lower than it was. Yes the share price can go down further but equally .......... Next update will let us all know that little bit more info. In the meantime I am still a believer in RLE. May the dividends continue and may the share price go up. Not much more to ask for apart from good fortune to one and all. Rgds S
We fools need your esteemed guidance @ilovesushi
Should we sell our shares and put everything in IMM ? Or maybe gamble our losses on CINE ?
Without your advice, we will be unable to afford to cook our sushi !
With the new environment and possible property write downs wont this Reit suffer? Nice divi but can it hold? With drop in share price there is not gain and the divi is wiped out. Fool likes it.
Well its only very recently that Bond Wolfe have put on various properties onto the open market at St Pauls Sqaure Wolverhampton ,Kingswinford. Nottingham etc as a change of tack which will put some hay in the barn
As they undertake very little asset management apart from extending lease terms in terms of refurbishment or redevelopment in market unlikley to be kind in valuation terms the only way they can increase NAV bridge is by letting voids
Rent reviews /lease renewals unlikelly to see rents increase In fact in Crewe its the opposite direction Would dearly like to know how far they have written the value down of this asset
RLE were at their best picking up buildings around Colmore Row , sorting out a few tenants and then either sending the asset back out and producing a real time profit or increase its net asset value Redistributing sale monies as dividends is really not the way to go
Monies should be recycled into fresh stock like the Moorlamds Centre Leek which Bond Wolfe acquired
Unless you think of course that Bassi cant find a good deal anymore
Yes I know sain@vision, you keep banging on about it. But, to quote the company when announcing the last dividend, "... in accordance with its progressive dividend policy, REI will pay a fully covered Q1 2022 dividend of 0.8125 pence per share for the period 1 April 2022 to 30 June 2022 (Q1 2021: 0.75 pence per share)." FULLY COVERED. So if they are able to fill some voids, as we must all hope they are capable of, then that money drops straight to the bottom line for potential distribution to shareholders and prevent further asset sales. Whether that will make the slightest difference to the SP remains to be seen.
"They need to bridge the gap between NAV and SP"
Well what they have done over the last couple of years is to write down the assets in the book . This has now allowed Bond Wolfe to effectively marketing any of the properties which are likely to show a book profit and it looks like they will achieve over £25m of sales this year
This will leave residual amounts over and above loan paybacks for a limited warchest .Nothing too wrong with that but then youhave to look at the quality of stock that remains A collection of ageing old chestnuts in W Bromwich
The only hope to bridge the gap on the remainder of the portfolio is to fill up some voids which is easier said than done
RLE problems stem back to 2105/ 2017when they adopted a scattergun approach to acquistions ending up with some bad purchases none more so than The Market Centre Crewe
"We are richly rewarded in dividends as it is." Rubbish. We are likely to see 3.25p dividend this year but the SP has dropped 6p, so there's been no reward for shareholders. Factor in the effects of inflation and this has been a disastrous investment in the last 12 months.
The Board is already committed to taking action, it's just a case of what action they take. I'm not normally a fan of share buybacks but I don't think a special dividend would be prudent (as you say, there's a downturn coming). A combination of paying back debt (which they are doing) and buying back/cancelling shares seems the logical option. They need to do something to bridge the gap between NAV & SP.
Smegma, on the contrary it’s time for inaction. The asset sales should give a war chest to use for the coming downturn.
We are richly rewarded in dividends as it is. The market is pricing RLE for these dividends to be cut. If the board run a tight ship and prevent that by not returning capital on a whim we will see a rerate in time.
Interim results due here on 29th September. Given the SP has once again trickled down to the 34's I fully expect to see the Board come good on their promise to return capital to shareholders. My guess would be that they will announce a share buy-back, starting in October, but who knows - they surely have to take some action to prevent our investments slowly disappearing.
With properties being marked down in the books over the last 2 years things are looking good for the Bassi family
A big chunk of the portfolio is up for sale. It seems that anything which is likely to make a book profit is up for grabs so plenty of juicy fees going begging for Bond Wolfe They have been successsful in getting away some of the shops at A****s Green Kings Heath & Bearwood as they break up the parades
A number of the office buildings are up for sale too and suspect that H2 will throw up over £20m of sales .Nothing wrong with that of course but where does that leave the rump when the quality kit is being shunted.?
For example Commodore Court having lost the anchor tenant Sainsburys who exercised their break clause at the1st opp devasting the value of the investment . This has been partly mitiagated by a letting of the vacant Sainsbury unit to a medical practice at a much lower rent which is now beig offered for sale at .£1.3m
The parade was bought for £2.335m +costs
That leaves the empty ex Bathstore unit vacant for some time and the small income producing charity shop behind
Good day ADV and thank you. Like yourself I am a long term admirer of RLE and good to see you still posting here, Push the boat out and have that ice cream - you deserve it. After all RLE has once again opened up its coffers and paid out a nice dividend. May your dividends keep on coming and may your gains always exceed your losses. I am still a firm believer in this stock and welcome the steady (and healthy) income this provides. Long may it continue. What's not to like with this dividend return?
Great to know you are still here @saintly. Great end to the week with RLE divi today and VPC/VSL yesterday. May treat myself to an ice cream tomorrow.
Seems like only yesterday since the last dividend but here we are once again. The share that keeps on giving and at current values it equates to 8.6% return. Whilst this is slightly below inflation it certainly keeps my portfolio on the right track. Thank RLE for a decent return. Now if you were to increase your property portfolio you could increase our dividends!!! Personally this is one stock I really enjoy having in my portfolio and have no qualms about recommending to others but as always dyor. Decent share and a very decent dividend return. Continued good fortune to all those that hold, are thinking about buying or just watching this share. May your gains exceed your losses. Rgds Saintly
Well The CEO wins all ways Harvesting juicy fees for Bond Wolfes agency and auctions Takes out a large salary Manages to stuff his whitelephant West Plaza in and loses Premier inn at the first hurdle
There is never any bad news with Bassi
Investors still kept in the dark where the rental being paid by Vine Hotels is anywhere near that paid by Prmier
Bought nothing in a few years and just a damage limitaion exercise knockig out afew shops whosebook avlueshavbeen downavluedsincepurchaseto show aprofit
Meanwhile The Market Centre Crewe Their largest £20m +purchase is rattling with voids ,unrecoverable service charges and in a downward spiral
RLE lacking the expertsie to stop the rot
Unit 6/7 Market Centre, Crewe, CW12 2NG 2,205 Rent £80,000 AVAILABLE PDF Email
Crewe Unit 16/17 Market Centre, Crewe, CW1 2NG 2,860 Rent £80,000 AVAILABLE
Crewe Unit 18/19 Market Centre, Crewe, CW1 2NG 3,796 Rent £100,000 AVAILABLE
Crewe Unit 21 Market Centre, Crewe, CW1 2NG 835 Rent £42,500 AVAILABLE l
Crewe Unit A Market Centre, Crewe, CW1 2NG 5,596 Rent On Application AVAILABLE
Crewe Unit 4/5 Market Centre, Crewe,CW1 2NG 3,945 Rent £85,000 AVAILABLE