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Regional or AEW top up

Posted: March 29th, 2018, 11:16 am
by bobsmydog
I hold both and am looking to top up on one on the recent price drops but can't decide which to go for, any thoughts, please? Currently:

AEW 1.45% discount to NAV, 9.74% yield
Regional 6.76% discount to NAV, 8% yield

AEW currently has higher occupancy rates - 8.4% vacancy, compared with 15% vacancy rate Regional

Re: Regional or AEW top up

Posted: March 30th, 2018, 8:17 am
by SKYSHIP
No contest IMO - higher yield; higher NAV discount & higher voids provides more letting upside.

A very good tip / write-up in yesterday's IC. Won't post as it is a subscription site; but herewith the opening para & final summary para:

IC View:
========

As a rule of thumb, a yield of 7 per cent or more normally falls into the 'too-good-to-be-true' category. However, we think excessive Brexit angst rather than genuine trading difficulties mean the 8.4 per cent yield offered by shares in Regional REIT (RGL) could prove the real deal...................

Adjusted NAV at the end of December 2017 rose to £395.7m from £293.2m a year earlier, largely through funds raised via a share placing and a portfolio valuation uplift. The funds raised were to finance the Conygar portfolio, which helped to boost rental income from £43m a year earlier to £52.3m. Despite the prospect of further growth in rental income, shares in Regional REIT trade at a 15 per cent discount to forecast NAV. Add to this one of the highest dividend yields in the market, and the shares are a buy for income seekers. Buy.

Re: Regional or AEW top up

Posted: March 30th, 2018, 9:31 am
by SKYSHIP
EDIT - No contest - RGL the better bet....

Incidentally the AEWU yield is 8.3%, not 9.7%. Also the RGL dividend is covered - not the case with AEWU.

Re: Regional or AEW top up

Posted: March 30th, 2018, 10:06 am
by bobsmydog
Many thanks, Skyship, for this.
I think I got my figures from trustnet, possibly not the most reliable source.
Interesting to hear that the discount to forecast NAV is 15% and dividends covered, very tempting indeed!

Re: Regional or AEW top up

Posted: March 30th, 2018, 5:42 pm
by SKYSHIP
Further re RGL - A good article tipping them in yesterday's IC. A small extract can be seen in this link:

https://uk.advfn.com/cmn/fbb/thread.php3?id=34755838

Re: Regional or AEW top up

Posted: March 30th, 2018, 5:44 pm
by SKYSHIP
EDIT - sorry, I see I'd already so advised! Doh!!

Re: Regional or AEW top up

Posted: April 4th, 2018, 10:53 am
by colin
Also the RGL dividend is covered - not the case with AEWU.


Skyship
i am puzzled as to where you get your information from, according to http://www.theaic.co.uk AEW rei'ts dividend is massively covered by nearly 8 years whereas RGLs dividend is covered by less than one years earnings?
Also RGL has a much higher loan to value than AEW.
Not saying your figures are wrong but somebody must have made a mistake.
https://www.theaic.co.uk/companydata/CD5XD

https://www.theaic.co.uk/companydata/CCDR6

Re: Regional or AEW top up

Posted: April 4th, 2018, 11:15 am
by mc2fool
colin wrote:
Also the RGL dividend is covered - not the case with AEWU.

Skyship
i am puzzled as to where you get your information from, according to http://www.theaic.co.uk AEW rei'ts dividend is massively covered by nearly 8 years whereas RGLs dividend is covered by less than one years earnings?

That's a different definition of "cover" (as you'd see if you rolled over that heading on the AIC pages. ;))

The AIC's measure is nothing to do with earnings but is the number of years the revenue reserves could provide the current dividend, i.e. for how long they could continue to pay out at the current level even if their earnings dropped to zero. It's a standard measure for investment companies/trusts, although I agree it would be less prone to confusion if they called it something else...

Re: Regional or AEW top up

Posted: April 4th, 2018, 12:49 pm
by colin
Ah! Well that clarifies the confusion (?) so when Skyship writes that RGLs dividend is covered and AEWs is not, in what sense is the word covered being used and where does one get that information?

Re: Regional or AEW top up

Posted: April 6th, 2018, 9:39 am
by bobsmydog
colin, I assume current yield is covered by current earnings

Re: Regional or AEW top up

Posted: April 6th, 2018, 12:52 pm
by colin
Sorry but this is all a complete mystery to me,as you may be able to tell !

AEWU's annual report 2016 contains this chairman's statement 'We have developed our portfolio to provide an income stream to deliver our target of declaring fully covered dividends of 2p per share per quarter.

The 2017 annual report states that dividends of 2p per share were paid each quarter so 8p per share in all, the statement shows earnings per share in two forms, basic earnings of 5.04 p per share and EPRA earnings of 7.57. neither of which covers the dividend so what is the dividend being paid from? and which earnings figure is relevant to dividend cover?
And where do these massive reserves come from?

Re: Regional or AEW top up

Posted: April 7th, 2018, 5:31 pm
by richfool
There is a short article in this weeks Investor's Chronicle about RGL., along with a buy recommendation.

Re: Regional or AEW top up

Posted: April 8th, 2018, 10:38 am
by SKYSHIP
Colin

Seems as though you've got there. Using EPRA earnings the AEWU 8p dividend is nearly covered with an EPS of 7.57p, but not actually covered; whereas the RGL dividend IS covered with an EPS of 8.6p v. a dividend of 7.85p.

So in the case of RGL the dividend has further upside and is f/c to rise to 8.1p in the current year.

Re: Regional or AEW top up

Posted: April 8th, 2018, 10:47 am
by SKYSHIP
EDISON Update post the RGL Finals.

In the current year the NAV is f/c to rise to 112p and the dividend to rise to 8.05p.

http://www.edisoninvestmentresearch.com ... 6/preview/

The IC article was a full-blown, practically full page TIP article - well worth reading for all existing
and prospective holders. 29th March - 5th April Issue.

Re: Regional or AEW top up

Posted: April 6th, 2019, 12:45 pm
by SKYSHIP
We haven't had a post here for a long. long time. Well, I've decided to re-visit due to personal circumstances:

RGL has proved to be a great and secure investment. In my last post here I stated:

EDISON Update post the RGL Finals: In the current year (2018) the NAV is f/c to rise to 112p and the dividend to rise to 8.05p.

Well, in the event the NAV rose to 115.5p and that dividend of 8.05p was confirmed.

The shares have traded between 90p & 107p; with that absurd and profitable opportunity for a top-up (!) down to 90p in December when all the Market was tanking and some propcos overdid on the downside. I was lucky enough to shatter my self-imposed limit of a 10% MAX any one stock; and took on more at 90.5p for an 8.9% yield!

Anyway, since then we've all seen the RGL results. AEWU on the other hand have not recovered their December fall. They've see-sawed, but can again be bought at 90.5p for a 9.8% discount AND AN 8.8% YIELD.

Seems like an opportunity to grab with both wallets IMO...and I have done so...

Re: Regional or AEW top up

Posted: April 7th, 2019, 6:40 pm
by BusyBumbleBee
Well done, Skyship - or should we call you TwoWallets now?

I bought both a tad too early :( but a happy :D holder of both

Re: Regional or AEW top up

Posted: April 7th, 2019, 10:36 pm
by richfool
And I believe RGL's dividend is due on 11th April.

Re: Regional or AEW top up

Posted: April 8th, 2019, 9:38 am
by BusyBumbleBee
richfool wrote:And I believe RGL's dividend is due on 11th April.
. It is indeed 2.5 pence - went ex div on 28th Feb : One of the few which 'spans' the two tax years. SQN is another one ex div 4th April pay 26th April.

Re: Regional or AEW top up

Posted: August 31st, 2019, 5:30 pm
by SKYSHIP
..and almost 5 months later:

# RGL drifting under profit-taking and congestion post the Rights & placing @ 106.5p. Now looking rather attractive again @ c104p. F/c dividend for this year is 8.25p; so the prospective yield = 7.9% and the NAV discount = c7.5%.

Great acquisition with some 40% of the new money announced this past week. A portfolio of regional offices providing a Net initial yield of 8.87% and anticipated reversionary yield of 9.54%. Pretty impressive. IMO truly surprising that such yields are still widely available.

https://uk.advfn.com/stock-market/londo ... s/80576795

This link gives some info on the Manchester and Chester properties accounting for about half of the purchase:
https://www.placenorthwest.co.uk/news/c ... -26m-deal/

# AEWU meanwhile having recovered strongly back up to 98p from the Dec’18-Apr’19 lows at 90p; once again have drifted back to around the 90p level. IMO well worth buying again on a dull day. If you can hit 90.5p (91p inc SD) then the NAV discount is 7% and the covered 8p dividend (2p/Qtr) provides a monumental 8.8% yield.

Other stats:
# LTV = 25.3%
# Debt of £50m to Oct’23 @ 1.4% over Libor (Total of 2.3% at Mar’19, currently at 2.1%))
# WAULT = 4.9yrs
# Sector Spread: Ind. 48%, Office 22%, Ret. 15%, Alternative 15%