FredBloggs wrote:The thing is that the REIT currently trades at a discount to NAV. The assets are mostly concrete and aren't going away any time soon. If RGL somehow went up in a puff of smoke, the concrete is still standing and the tenants are still paying rent. I don't correlate that as equity risk in the same way as, say, Carillion or Provident Financial. Like chalk and cheese. I see zero reason to buy the bonds, others have different views, obviously.
The concrete might be standing, but might also be falling apart. The tenants might all decide to up sticks and relocate their business to Poland, the economy could collapse after Brexit (as I'm told, incessantly, it will it we leave
) or the building sector could boom and build loads more offices and warehouses reducing the rents if there aren't enough tenants to go round.
Plenty of risk for a REIT, particularly one holding office space that can become a ghost town almost overnight.