RE: Friday big day14 Sep 2024 11:59
More on SOHO from Quoteddata.
The article picks 3 trusts they think with the most to gain.
https://www.theaic.co.uk...al-estates-rocky-moment
Picton discount 21%
Urban logistics discount 24%
AND my favourite!
"Triple Point Social Housing REIT (SOHO – 41.3% discount)
Our last pick is SOHO, which languishes on the widest discount of the three. Some reasons for this are justifiable but others not so much in our view. The good news is that the justifiable reasons are being addressed by the manager. Two of its housing association tenants – Parasol and My Space – have been in rent arrears for some time having got into financial difficulties.
The manager has recently announced that all 38 of the leases on properties let to Parasol have been transferred to Westmoreland. The manager expects rent collection to increase to between 75% and 85% of the existing rent during the first 12 months, and increasing thereafter to up to at least 90%. The manager says that it undertook studious due diligence of Westmorland, which was previously issued a notice by the regulator regarding governance and financial issues, but is comfortable that a new, experienced management team is turning things around. This is reflected in Westmoreland’s accounts, which show four years of annual surplus and growing turnover and a steadily increasing cash position. SOHO’s manager will now look for a similar conclusion to the My Space-let portfolio.
It appears to us that SOHO may have been unfairly caught in the cross hairs of the negative headlines that have plagued the UK residential sector in recent years. In 2021, SOHO’s peer Civitas was the subject of a short-seller report – the meat of which was focused on undisclosed dealings by directors. Claims surrounding the strength of the tenants were flimsy at best. More recently, headlines on Home REIT have not helped either.
Despite share price weakness, the company has delivered a NAV total return over five years of 42.5%. Meanwhile, its balance sheet is the envy of the sector. It has a long-weighted average debt maturity of 9.1 years at a low, fixed rate of 2.74% and no maturity until 2028.
To tackle its wide discount, the company has said it will sell a £20m-ish portfolio and use the proceeds to repurchase shares. This will hopefully facilitate a deserved re-rating of its share price."
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