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I am a little surprised at big financials bothering with Unite, but it certainly looks that way.,,
Hi Chaps, I've been having a look at this dip in the share price and it appears that we have a couple of hedge funds shorting the stock just prior to the Morgan Stanley down grade report - Basso Capital Management & CQS (UK)LLP. Far be it for me to suggest that this is a coordinated bear raid. What is interesting is that the report is based on the student market contracting and this affecting Unite. However, it might also be expected to also affect ESP and DIGS - whereas their share prices have remained very resilient - DIGS is up as I post. Also, I'm far from persuaded by the report. There is a huge under supply of student accommodation. Last year 25,000 beds were added but student numbers increased by 60,000. There would have to be some cataclysmic event to bring this market into balance - so I'm satisfied that Unite is still an attractive investment in the short, medium and long-term. Unite's NAV was 620p at 30th June and Morgan Stanley sp target is 590p, other analysts targets are up to 770p so UTG are looking good value at the 550p sp as I post. What we are being presented with is a great opportunity to buy on the dip. However, as we have seen on previous Unite dips - it tends to be a spike - so you may need to be quick before the hedgies cover their positions and it charges back up again. Regards, Maddox
Another RNS today - this time a well located development site acquired for 570 student beds this time in Sheffield. Again, this will be financed (£35) from internal cash flow. Unite's maturing business model will throw off increasing amounts of cash - and with conversion to a REIT that will flow to shareholders. With a development pipeline of now 5,500 student beds Unite also offers excellent transparency of future growth as well. So asset backed, very conservatively financed (loan to value ~35%)delivering a potent combination of organically generated growth and prospective increasing dividend stream Unite offers a highly attractive risk/reward profile. Regards Maddox
More good news; UTG get planning approval for a £70m development in the center of Liverpool adjacent to an existing property currently 99% let. So a perfect fit. Also, they are going to fund the development from internal resources. As they have just sold two properties for £88.4m realising a nice £34.7m profit(65% on development cost) they have the cash ready to recycle. So all looking positive based on the news - so why has the sp fallen to as low as 590p? Well the other players in the market, ESP, DIGS, haven't fallen so it appears isolated to UTG. And, as the news is all positive, I suspect a large FI is re-weighting its holding, possibly taking some gains to invest elsewhere. Once that clears I wouldn't be surprised another rapid climb up to 660p. Regards Maddox
Unite Students, the UK's leading developer and manager of student accommodation, announces the disposal of Greetham Street, Portsmouth and Gosford Gate, Coventry to USAF for a combined value of £88.4 million. Both properties, comprising 1,122 beds, were completed in 2016 and are fully let for the 2016/17 academic year on nominations agreements to Portsmouth University and Coventry University, generating an income yield on cost of 9.3%. The disposals increase sales in the year to over £110 million on a see-through basis and support Unite's strategy to recycle capital and maintain leverage at our target level in the mid-30% range. The blended valuation yield on the disposals was 5.65%, in line with valuation yields at the 30 June valuation date. And of course it is almost an internal aggreement?
Unite has taken off like a rocket this morning up 14.5p 2.26% as I post. Cannot find any news item or RNS to explain this. Anybody have any clues? Regards Maddox
There are two shares in my ISA that have been long term investments and which never give me a moments anxiety. They are Unite and Workspaqce (UTG and WKP). They both pay a low but increasing dividend but more importantly they both just keep adding to their share price. Unite has gone from £1.80 to £6.50 in five years. About 94p per year or about 60% increase in five years. Workspace from £2.30 to £6.73, about 88p per year giving an incredible 190% increase in 5years. Both companies are well managed and I have no connection with either appart from holding shares in both for eight years.
Thanks Maddox for the results run down. I think the post Brexit hiccup will be short lived.
EPRA earnings up 22% to �36.1m, EPRA eps up 15% to 16.3p, EPRA NAV up 7% to 620p. Interim div up 9% to 6p/share. Loan to Value 35% - very conservative leverage. IFRS profit including revaluation gains down at �106.7m (2015 �208.3m) due to big uplift last year. Conversion to REIT in 2017. http://www.investegate.co.uk/unite-group-plc--utg-/rns/interim-results/201607260700101864F/ Ironically, UTG was the share I was most confident was Brexit-proof but took the largest hit!! Whatever, nothing of concern in these figures and outlook statements very positive: 'Despite the uncertainty caused by the result of the EU referendum, the fundamentals of our business and the student accommodation sector remain strong. The demand:supply outlook for student accommodation remains favourable and our earnings growth trajectory is underpinned by our efficiencies of scale and a high quality development pipeline, focused on cluster flat accommodation with a lower price point, where the rental growth outlook is strongest.' Regards, Maddox
Positive update and valuation uplifts on their student property funds - albeit independently valued prior to 23rd June - driven by rental growth and a positive outlook statement 'we expect to see continued high demand for purpose-built student accommodation' Regards, Maddox
Couple of points for your consideration: aa) Student accommodation is a very different species to commercial property (office and retail primarily); bb) The cost of developing student property will be dropping along with the fall in commercial property development activity; and cc) More land will be available at more reasonable prices for student accommodation development. The financial viability of student property development in Central London was becoming marginal in competition with commercial property development. IMHO the linking of the post-Brexit travails of commercial property with student accommodation is miss-placed. Every cloud as they say..... Regards, Maddox
After a fall of about 14% since the beginning of June this may be a good buying opportunity. Such a drop seems very unfair when I voted for remain! However I am still well in the black with Unite because I have held them so long. The latest dividends are a real improvement too.
Unite has been tipped in the Investors Chronicle BUY at 600p. Key points: currently trading at a discount to f/cast NAV of 657p 31/12/2016 and 709p 31/12/2017 (Liberum figs. Prospective yield 4% from conversion to REIT. A strong and growing student market - BREXIT proof. Regards, Maddox http://www.investorschronicle.co.uk/2016/04/28/tips-and-ideas/share-tips/get-into-bed-with-unite-rMWZBQ0vWIPTKv3kHrwRJJ/article.html
Unite have secured another site for development in Liverpool with planning permission for 713 student beds - but Unite think that this can be upped to over 1000 beds. This is scheduled to open for the 19/20 academic year - so a nice bit of forward visibility of NAV growth. Their target return on cost is >8% for regional developments. Another point is that the £70m cost will be funded from internal resources - that I'm interpreting to mean that they will be staying within their conservative <40% loan-to-value financing. This despite the anticipated increase in dividend yield as they convert to a REIT. NAV growth and increasing yield - what's not to like. Regards, Maddox
I am sorry to hear that Mark Allen has left for St Modwen. I feel he has led Unite in an honest and caring manner. At least his replacement, Richard Smith, is from within the company and will hopefully continue in the same vein. Mark has been in charge for ten years, as long as I have held the shares. He will surely be missed.
Just received a message informing shareholders that Unite is becoming a Real Estate Investment Trust early next year. Does anyone understand why. I do not want to invest in any house/flat buy-to-let landlord...
I have a holding of £20000. I keep it at that by top slicing money over £20k into other shares. I only started this last April but since then have top-sliced over £9000. Some of this growth will be from previous years of course. Add this to the steadily growing dividend...
Expert blogger and former Barclays Stockbroker has added Unite to his blog watchlist. See what he thinks here: http://www.lse.co.uk/blogs/expert/david-harbage-blog/azio2t/
Unite purcjhase, not one but two new sites in central Bristol. Details here: http://www.lse.co.uk/share-regulatory-news.asp?shareprice=UTG&ArticleCode=rywq5tk9&ArticleHeadline=Acquisitions
Again all positive by my reading. Available here: http://www.lse.co.uk/share-regulatory-news.asp?shareprice=UTG&ArticleCode=afwe4gjq&ArticleHeadline=Valuation_update_for_USAF_and_LSAV
Despite the share price volatility we're experiencing Unite is progressing extremely well as confirmed by their fund valuations announced today: 'At 30 September 2015, USAF's property portfolio was independently valued at £2,017 million representing a like for like increase of 2.1% during the quarter (11.1% in the nine months to 30 September). The portfolio comprises 26,813 beds in 75 properties across 24 University towns and cities in the UK. LSAV's investment portfolio was independently valued at £720 million, up 2.3% on a like-for-like basis in the quarter (14.8% in the nine months to 30 September). Following the practical completion of the 759 bed Angel Lane development in Stratford in August, LSAV's investment portfolio now comprises 4,636 beds across 12 properties in London and three properties in Edinburgh. The increase in valuations is driven primarily by rental growth and eight basis points of yield compression in both USAF and LSAV on a like-for-like basis in the quarter (54 and 69 basis points respectively in the nine months to September). The overall USAF portfolio is now valued at an average yield of 5.8% and LSAV's portfolio at 5.1%.' ....and the letting demand remains extremely robust: 'The lettings cycle for the 2015/16 academic year is now largely complete. Unite's total portfolio of over 46,000 beds has achieved strong occupancy levels, with 99% of bed spaces let delivering rental growth of 3.8%.' This last piece of news obviously bodes well for the rest of the year. Place this organic growth on top of the further developments and acquisitions and the stars appear to be very much aligned for Unite. Regards, Maddox
Take it with a pinch of salt, but my "fair" value range here is 635p to 670p, so things are looking rich here
Thank you Mark.
UTG UNITE GROUP PLC..... <b>UNITE Group plc Given Add Rating at Numis Securities Ltd (UTG) August 6th, 2015</b> Numis Securities Ltd re-affirmed their include evaluation on shares of UNITE Group plc (LON:UTG) in a resaerch note released onWednesday, MarketBeat Scores reports. The broker currently has a GBX 710 ($11.09) price target on the stock. ! In other UNITE Group plc news, insider Allan,Mark sold 12,000 shares of the business’s stock in a trade on Thursday, June 25th. The shares were offered at an average price of GBX 5.85 ($0.09), for a whole trade of GBP702 ($1,096.53). Several other research analysts have issued reports on UTG. Finally, Jefferies Group reiterated a buy rating and set a GBX 610 ($9.53) price target on shares of UNITE Group plc in a investigation notice on Monday, July 20th. The stock has been rated by two investment analysts with a hold rating and a buy rating has been imputed by three to the stock. The stock has an average rating of Purchase and an average cost target of GBX 678.60 ($10.60). UNITE Group plc (LON:UTG) opened at 654.50 on Wednesday. UNITE Group plc has a-12 month low of GBX 395.60 and a 12 month high of GBX 658.16. The business ‘s 50-day moving typical price is GBX 606.67 and its 200-day moving average price is GBX 577.57. The company also recently announced a dividend, which will be distributed on Friday, November 6th. Stockholders of record on Thursday, October 8th will be compensated a GBX 5.50 ($0.09) dividend. The ex-dividend date is Thursday, October 8th. This represents a dividend yield of 0.84%. ! The properties of the Company’s provide accommodation close to University campuses, transportation and nearby facilities. It operates under two sections: Property and Businesses. The Businesses segment manages rental properties, owned directly by the Business or by joint ventures. The Property segment of the Company’s undertakes improvement and the acquisition of qualities. It runs across the UK in 25 cities. Its services include Wireless Lan, utilities, insurance, maintenance, round-the-clock security and fortnightly specialist cleaning of communal areas. It operates a small number of specialist funds and joint ventures with investment partners and has also invested in.