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Sain,
I have read all your posts on this board, and welcome your opinions.
The points made by yourself seem fair and reasonable, and the following probing questions and criticism are relevant. The impending large scale voids are certainly an area of concern.
I have a property development and investment background, and am aware of several of the personalities involved.
I am grateful for your opinions, and as you say different opinions are to be welcomed.
I am sure JT keeps his own counsel on financial advice but always good to get different opinions on property values etc
I would be wary of those who blandly cut and paste any positive overtones who show no interest whatsoever in the performance of the individual properties who for reasons best known to themselves are in awe of the CEO
As ever DYOR
Adv
Don't understand your point?
The idiot factor for me was investing in Mccolls
Jr20 comment from another board - "By the way I'm the idiot here".
Please never take financial advice from someone with a massive chip on their shoulder.
Bassi certainly will be pulling out all the stops and using every resource available to him to deal with voids especially West Plaza to avoid the flak should it falter .
He will have his hands around the throats and fingers up the nose of all the local bodies to mitigate the nightmare here and it will be interesting to see how he meets the challenge
Crewe however has been a step too far .A centre in decline and RLE will need to draw on some external skillsets with any hope of arresting further falls especially with Cordwells new centre proposed who will be competing for occupiers
Well there is certainly some scope like Worcester and Leicester . St Pauls Square too should the office space become vacant
West Plaza if all else fails but conversion of dated office buildings to resi is really low hanging fruit and more of a damage limitation exercise rather than adding value
Sain,
I have been looking at buying in here, and as part of my research came on here to review opinions.
Your obvious in depth knowledge is most informative, and accordingly I have held off any short investment here - thank you.
Are you aware of the potential for any of their vacant commercial holdings to be changed to residential ?
Paul Bassi, Chief Executive, commented:
"This refinancing and our overall maintained cost of debt, demonstrates our excellent banking relationships and access to financing on competitive terms, supporting the Group's strategic objectives."
No increased facility to provide a warchest to take advantage of opportunities which might appear
Looks like they are going to have to concentrate on getting rid of a few of the office assets around the M42 where they have a decent chance of achieving prices above Book to put some hay in the barn
However not sufficent to undo any damage being incurred with the larger assets least of all West Plaza West Bromwich now that Premier Inn have quietly moved it from their network shortly to leave a massive hole in rental income
The CEO and his partners mightily relieved as they managed to shove this white elephant into RLE in 2016 for a mighty £9m
and trousering a decent profit.
Nice one!
Premier Inn leaving West Plaza was always on the cards .A truly dreadful purchase
They entered into discussions with the local authority on their new site in Congregation Way in August 2015 , the site zoned for such use in the local Area Action plan.
A detailed plan submitted in June 2016 and rattled thru planning by September
The timing of the purchase of West Plaza just before !
The CEO "sold" the idea to shareholders on the strength of achieving "marriage value"with the adjoining Metro Court .You couldn't make that one up as they sold Metro Court seperately a couple of years ago.
Now shareholders saddled with the problem of replacing that lost income
I wonder if they have been lucky enough to undo some damage at Nottingham and replace Sainsburys with the Co-Op.?
You have to take your hat off to FSP, the agents who seem to have done best out of this toxic deal ,collected fees twice
First in 2013 when they sold it for £1,95m for the owners
hxxps://www.fspproperty.com/sales/commodore-court-nuthall-road-nottingham-ng8-5hd/
Then collected again in 2016 acting for RLE who gave the buyers a nice little earner taking it off their hands for £2.350m ,a decent profit .
RLE who are now holding the expensive baby as both the main tenants Sainsburys and Bathstore have disappeared wiping out the majority of the income .
They should really stick to the W.Midlands venturing into areas where they get stung
hxxps://www.fspproperty.com/sales/commodore-court-nuthall-road-nottingham-ng8-5dq/
The Scottish funds must be mightily relieved that the managed to palm their retails assets in Walsall and Crewe onto RLE
Yesterday ASI announced the sale of the Moor in Sheffield to New river for £41m
They had it under offer to them in 2019 for £85m That's a haircut of epic proportions
https://www2.colliers.com/en-gb/properties/birch-house-joseph-street-office-to-let-in-oldbury/gbr-joseph-street-oldbury/gbr3018502
Both these office buildings now being openly marketed as Npower not renewing their lease .Such a significant loss of income and prestige tenant you would have thought would warrant a mention in dispatches
One of the 2 buildings has been hanging around empty for a number of years
.Investors can s hope that one of those enquiries they mentioned are casting their eye here
Some hardcore market evidence appearing in the W Midlands which will be driving a coach and horses through LTVs. on shopping centres
A shopping centre in Coventry that eight years ago was valued at £37 million was sold this week for only £4.9 million, setting alarm bells ringing among lenders, landlords and local authorities nationwide.
West Orchards’ importance as the city’s primary shopping destination cannot be underestimated — “It’s almost our Galeries Lafayette,” Trish Willetts, director of Coventry’s business improvement district, said, comparing it with the landmark Paris department store — but now interest in the centre is spreading far beyond the West Midlands and what, from May 1, will be the UK’s “City of Culture”.
GallMat
Yes I agree quite a bit of the general decline in the value of the portfolio has already been factored in the SP. Adv and others have been dazzled by the dividend payout ignoring what is happening in real time
My main gripe is that what I perceive to be material changes to the portfolio are buried in the candy floss
Call me old fashioned but when directors dump their personal properties into a company which is already significantly exposed to one small area of the Midlands doesn't sit well with me
A little bit like the RNS which is a bad news free zone
In fact they have little interest in the actual portfolio labouring under a grave misunderstanding that the management team can make a silk purse out of a sow's ear
Its going to take a huge stroke of luck to undo the majority of the damage of disappearing income
Unfortunately the big hits in income are yet to appear until Q2
It will be interesting to see where the DWP and the NHS are fitting into the equation and how much space they are taking If they manage to replace Premier Inn with one of those tenants at West Plaza that would be a right royal result
You are entirely correct Gallmat. Unfortunately we have a regular poster who has a personal grudge against the company and it's CEO. He isn't invested, obviously, and is determined to talk anyone else out of investing. Personally, after months or reasoning with him, I now have him blocked, so I can't see what he has to say. I do believe the company has the best interests of investors at it's heart.
Thanks for detailed research on this. But does the large discount to Nav not account for the items highlighted?.
I would have been worried at the pre covid price
But we are on a huge discount and they also use buy backs to support the price
"The diversity of our portfolio and intensive asset management, has resulted in resilient levels of rent collection, and has allowed us to combat much of the impact of COVID-19, which has devastated many other businesses."
I guess the CEO never wants to share the bad news or inform shareholders show the company is going to try and mitigate the damage taking place at the coalface .
How on earth are they going to achieve any rental growth at Crewe with a sea of empty units and a new scheme by Cordwell Property in the town .Royal Arcade where demolition works have started
The elephant in the room Crewe .More lease expiries in Q1 2021 Those units let to Superdrug and Clarks where the rents were already above market value in 2016 .
In addition Warren James & Ernest Jones the 2 jewellers and not forgetting Pea****s with their £175,000 pa rent looking very shaky.
More than likely Clarks will be vacating as they have announced as spate of shop closures
With car parking revenue hit hard here and other locations in the portfolio this likely to impact heavily on income .
The CEO preferring to talk in terms of % rents received and WAULTS ,no mention of course if any rent reductions have been offered to achieve that .
Rent collection at just under 90% compares favourably with it's peer group which is perfectly respectable ,all things considered
Reiterating the robustness of neighbourhood/convenience stores and the mention of the Co Op could mean they have managed to replace Sainsburys as the tenant in Nottingham which if the case is a right result especially if they can get anywhere near the rental of £125,000 pa
Certainly would limit the damage on that purchase .
They have also managed to get some of the shop voids away at Kings Heath which I guess falls under the category of"neighbourhood" which is also good work
Good to hear also that accomodation is under offer to quality tenants NHS and DWP .Good news especially if it is for one of the big beasts like Telford
The CEO often refers to the diversity of the portfolio which with a complete absence of industrial and logistics property is not the case .
As ever any bad news about"known events" in Q1 is firmly buried i.e the loss of N Power at Oldbury and Premier Inn at W.Brom whose loss will be keenly felt at the end of Q1 . Shareholders can hope that one of those quality tenants mentioned are heading there
The increasing voids at Crewe with leases / break causes hitting this quarter
Paul Bassi, Chief Executive Officer, commented:
"The diversity of our portfolio and intensive asset management, has resulted in resilient levels of rent collection, and has allowed us to combat much of the impact of COVID-19, which has devastated many other businesses."
"With a growing occupier demand resulting in new/pipeline lettings for our void space, combined with portfolio lease renewals, we believe that we will move forward with a stable and secure property business, to make opportunistic sales and acquisitions that support a continued progressive dividend policy."
Hi ADV, Well said. I too have dabbled for a number of years in various markets but in the last few years I have looked to focus on mainly dividend bearing where possible. Presently I am focusing on around 18 so nowhere near your level. There is something good when the dividends come in on a regular basis and like you I look upon this as a hobby. At the end of the day you do what makes you happy. Some people go for riskier shares in hope of getting the 10 bagger whilst I am content to say a profit is a profit. If I can make more winning buys than losing buys then its good. These days I too look to building an income for the later years lol. Given the number of quarterly payers how on earth do you manage to monitor? That must be challenging but good luck and more importantly good fortune. A 6% return will be excellent given what you can expect elsewhere these days. Keep up the good work, enjoy and long may this particular share give you much enjoyment and much in the way of financial return. In these days we certainly could do with both. All the best. Only one who can influence you should be yourself lol
Yes its all about the dividends
Regional REIT have some decent industrial property in their portfolio underpinning dividends .Their largest investment being Juniper Park valued at £31m With industrial yields being compressed they have an asset which not only is experiencing capital l growth they have have manged to increase income too on successful lettings and improved rents on renewals .
The jewel in the crown
Unfortunately RLE are polar opposite their most expensive purchase coinciding with the time of Regional's purchase of Juniper Park was The Market Centre Crewe seeing both capital and rental income cliffall
A huge job on their hands just to stop any further decay
Mix in loss of big rentals at Telford ,Oldbury and W. Bromwich there is plenty not to like
Yet somehow you think this isn't going to seriously hit dividends think again
"The key is buying in at the bottom "
Totally agree Maybe it won''t hit 26p again but certainly giving it a swerve at today's sP
Hi saintly. Yes I love my hobby of investing in quarterly dividend payers. I dabbled for years in Aim exploration companies without much success, before switching to investing for dividends. At first I had found 13 quarterly payers, which I found kept my interest much better than the twice a year variety. I'm now in around 70 quarterly payers, with around another 30 I watch. I am certainly no expert and would never try and impose my views on others. My portfolio pays me an average 5.7% which I hope to get to 6% soon, and it will pay the rent on an apartment my the sea when/if I get away from my current family caring duties. I don't worry too much about capital. There are always some companies up, and some down. I have noticed a growing number of people trying to trade these quarterly payers. It only works in a rising market. The key to success is always getting in at the bottom and keeping that price and yield. I dumped a lot of companies at a loss last March and put the proceeds in companies who's prices had collapsed, and they now pay me 10% yield. Regional REIT for example.
It's a great hobby, but most investors just want profit and believe they can influence the market with comments on boards like this.
Best wishes.
"No company ever gets everything 100% correct but it is about learning from your efforts"
"Experience is a hard school but fools will learn no other"
True but let us hope they have learned something , meanwhile shareholders are stuck with a number of expensive mistakes where they will have to buy in external expertise to limit the damage .
"Don't try to be a jack of all investments. Stick to the field you know best."
Bernard Baruch
Some truth in that but you do have to evolve
The CEO has worked best farming West Bromwich Town Centre picking up unloved 70/80s office buildings cheaply and getting them let up .It has been extremely profitable for him..
Less so for those properties arriving at RLE as ready made investments with a limited upside when its all about reducing voids
None more so than West Plaza the CEO and his partners hit the jackpot managing to get Premier Inn and then again stuffing it into RLE at a fancy price with every likelihood that Premier Inn in 2021 would break their lease,which they have
What have shareholders learned about that apart from now the thorny problem of replacing the lumpy income ?
Likewise opportunistic buys of office properties around St Philip's Place have proved to be a happy hunting ground
Get them let up and the investment away and book a decent profit .All good stuff
However by 2015 they started to labour under a grave misunderstanding they could sprinkle this fairy dust far and wide
Acquiring their biggest asset The Market Centre Crewe for £20m +costs and other high street retail in Walsall from the Scottish funds time served in retail
The smart money moving out whilst RLE arrived gung ho
Crewe probably worth less than £14m and huge voids to fill
Commodore Court Nottingham
An investment which had done the rounds.bought and sold before landing in RLE's lap .
Local intelligence would have revealed that Sainsburys had been trading poorly and more than likely to break their lease when they could Double misfortune with Bathstore going west
Other Missussippi Riverboat gambles gone wrong Telford,Oldbury and Redditch too
Their biggest mistakes are ignoring industrial properties where numerous opportunities would have gravitated towards Andrew Osborne with his expertise in this field
Perhaps some new heavyweights required on the BODS to counter the dominance of the CEO & CFO BODS who perhaps recognise more the importance of revealing bad news as well as good rather than investors try and find out for themselves
ADV, It seems that you are very much like myself with regards to RLE in that you are also content to hold this share. Like everything in life we make our own decisions and I for one am glad to be invested in this company. No company ever gets everything 100% correct but it is about learning from your efforts. A good return on our investment, paid out at decent quarterly intervals and the prospect of greater things still lead me to believe this is one for my portfolio and one I am very happy to hold. Once again I say "Whats not to like!!!" lol. Keep the faith and good luck as long as you continue holding this share. Per Ardua Ad Astra
Well ADV I watch a number of companies in the property sector quite clsoely many of which I am not invested in. RLE particularly interest me as the individual properties are of great interest to me in an area which I am familiar with Having been involved in commercial property investments in the Midlands for sometime
I find that undertaking due diligence before investing has stood me in good stead .
I speak as I find and any information I glean I post . What I find particularly irksome is the discrepancy with the RNS and what is going on at the coalface
Don't take my word for it speak to some W Midlands property agents
I appreciate that this might be of little concern to you and others . You are of course free to ignore it .Sometimes the best investments are those you don't make and then those you have been negative about turn positve
Those are the best of all
Countrywide estate agents being a prime example Negative for sometime until it was clear that they came out of lockdown kicking and screaming and had been oversold
However every dog has its day and would be more than happy to invest here at the right price I dont think that some of the assets will ever recover what was paid for them. Very happy to be proved wrong .
Rest assured I will be popping up again
Maybe you might have your own thoughts on the various property values or perhaps they don't interest you?
As ever DYOR