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Hansteen Holdings Ongoing Charges?

divad9
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Hansteen Holdings Ongoing Charges?

#235049

Postby divad9 » July 9th, 2019, 12:18 am

Hi all,

I'm wondering if you any of you know if Hansteen Holdings REIT has any entry/exit/management fees or ongoing charges?

Some REITS have 1%+ annual ongoing charges on shares held and I prefer to keep the costs low so they don't eat into returns.

I can't find anything on Hansteens website, nor anywhere else online.

Can anyone help?

Thanks in advance,

David

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Re: Hansteen Holdings Ongoing Charges?

#235051

Postby Alaric » July 9th, 2019, 12:29 am

divad9 wrote:Some REITS have 1%+ annual ongoing charges on shares held and I prefer to keep the costs low so they don't eat into returns.


A REIT is still a Company such as BP or Unilever, differing only in the tax treatment of some dividends. You buy the shares in the usual way, so there's no difference in the front end costs of dealing commission and Stamp Duty or any ongoing charges made by a Broker or platform. Expenses would be disclosed in the Report and Accounts.

This is the data that Hargreaves have. Other Brokers are available.

https://www.hl.co.uk/shares/shares-sear ... rd-gbp0.10

divad9
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Re: Hansteen Holdings Ongoing Charges?

#235057

Postby divad9 » July 9th, 2019, 1:20 am

Understood. I should have been more specific in my first post. I can't seem to find in the Hansteen reports what % they charge as an annual management fee.

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Re: Hansteen Holdings Ongoing Charges?

#235075

Postby Alaric » July 9th, 2019, 7:38 am

divad9 wrote: I can't seem to find in the Hansteen reports what % they charge as an annual management fee.


I would have expected REITs to be run as a normal Company. You won't find an annual management fee because they don't charge one. Instead just look for the expenses it costs to run the business.

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Re: Hansteen Holdings Ongoing Charges?

#235142

Postby mc2fool » July 9th, 2019, 11:58 am

Alaric wrote:
divad9 wrote: I can't seem to find in the Hansteen reports what % they charge as an annual management fee.

I would have expected REITs to be run as a normal Company. You won't find an annual management fee because they don't charge one. Instead just look for the expenses it costs to run the business.

Not necessarily so, it seems.

https://www.theaic.co.uk/aic/find-compa ... earch_form

(Most are REITs, even if it's not in their name.)

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Re: Hansteen Holdings Ongoing Charges?

#235245

Postby divad9 » July 9th, 2019, 4:09 pm

I'm not approved to post links yet but if you click on the link posted above by mc2fool and in the 'Name/TIDM Search' bar you type in AEW UK REIT and then click 'charges and ongoing' you'll see the management agreement.

"The Investment Manager will receive a management fee which will be calculated and accrue monthly at a rate equivalent to 0.9% p.a. of NAV (excluding uninvested proceeds from the Issue and subsequent fundraisings). The fee will be paid on a quarterly basis based on the prevailing NAV. Any investment by the Company into the AEW UK Core Property Fund will not be subject to management fees or performance fees otherwise charged to investors in the AEW UK Core Property Fund by the Investment Manager. The Investment Management Agreement may be terminated by the Company or the Investment Manager giving 12 months notice, such notice not to be given earlier than the first anniversary of Admission."

From what I've personally seen, most REITs charge a fee, but I'm struggling to find one at all for Hansteen Holdings.

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Re: Hansteen Holdings Ongoing Charges?

#235294

Postby Alaric » July 9th, 2019, 6:50 pm

divad9 wrote:
From what I've personally seen, most REITs charge a fee, but I'm struggling to find one at all for Hansteen Holdings.


Hansteen didn't come up on the AIC search above, which perhaps means it regards itself as a trading Company that has adopted REIT status for taxation reasons.

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Re: Hansteen Holdings Ongoing Charges?

#235330

Postby 77ss » July 9th, 2019, 8:26 pm

divad9 wrote:....

From what I've personally seen, most REITs charge a fee, but I'm struggling to find one at all for Hansteen Holdings.


I don't believe your 'most REITs charge a fee' statement to be correct. So there is no logical reason to expect Hansteen to tell you what theirs is! You might just as well ask what Unilever's management fee is. Not a bad question of course - salaries, cushy pensions, share options, performance rewards......

The AIC website is irrelevant for many, if not most, REITs (a question of definition).

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Re: Hansteen Holdings Ongoing Charges?

#235374

Postby mc2fool » July 9th, 2019, 10:41 pm

77ss wrote:
divad9 wrote:....
From what I've personally seen, most REITs charge a fee, but I'm struggling to find one at all for Hansteen Holdings.

I don't believe your 'most REITs charge a fee' statement to be correct. So there is no logical reason to expect Hansteen to tell you what theirs is! You might just as well ask what Unilever's management fee is. Not a bad question of course - salaries, cushy pensions, share options, performance rewards......

The AIC website is irrelevant for many, if not most, REITs (a question of definition).

I don't know about "most" having a management fee (or not), and I'm not sure what you mean by irrelevant due to "a question of definition"; AFAIAA listing on the AIC website is a matter of whether the company has chosen to be a member of the AIC or not.

However, on eyeballing it seems that of the 50ish UK REITs* slightly over half are listed on the AIC site -- and all of the ones I've looked at (I haven't been through them all) have management fees. So, it seems that there are two kinds of REITs, those that hire management companies to run their affairs and those that do it all "in-house".

Hmmm ... I wonder if that split corresponds to REITs that just buy-and-rent-out vs those that build-and-rent-out ....

* https://www.bpf.org.uk/reits-and-property-companies (best list I could find)

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Re: Hansteen Holdings Ongoing Charges?

#235386

Postby divad9 » July 9th, 2019, 11:27 pm

77ss wrote:
divad9 wrote:....

From what I've personally seen, most REITs charge a fee, but I'm struggling to find one at all for Hansteen Holdings.


I don't believe your 'most REITs charge a fee' statement to be correct. So there is no logical reason to expect Hansteen to tell you what theirs is! You might just as well ask what Unilever's management fee is. Not a bad question of course - salaries, cushy pensions, share options, performance rewards......

The AIC website is irrelevant for many, if not most, REITs (a question of definition).


Of course there's a logical reason for REITs to tell you what their management fee is. The management fee will eat into your return. Look at Vanguard, for example, one of the reasons why they are doing so well is because they introduced low-cost index funds to the masses. Are you saying it's illogical to what to know what charges you may or may not incur before making an investment?

I'm going to disagree, most of the reits I've seen do charge a management fee to investors. AEW REIT...PRS REIT...RESI...Supermarket Income Reit.

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Re: Hansteen Holdings Ongoing Charges?

#235388

Postby divad9 » July 9th, 2019, 11:32 pm

mc2fool wrote:
77ss wrote:
divad9 wrote:....
From what I've personally seen, most REITs charge a fee, but I'm struggling to find one at all for Hansteen Holdings.

I don't believe your 'most REITs charge a fee' statement to be correct. So there is no logical reason to expect Hansteen to tell you what theirs is! You might just as well ask what Unilever's management fee is. Not a bad question of course - salaries, cushy pensions, share options, performance rewards......

The AIC website is irrelevant for many, if not most, REITs (a question of definition).

I don't know about "most" having a management fee (or not), and I'm not sure what you mean by irrelevant due to "a question of definition"; AFAIAA listing on the AIC website is a matter of whether the company has chosen to be a member of the AIC or not.

However, on eyeballing it seems that of the 50ish UK REITs* slightly over half are listed on the AIC site -- and all of the ones I've looked at (I haven't been through them all) have management fees. So, it seems that there are two kinds of REITs, those that hire management companies to run their affairs and those that do it all "in-house".

Hmmm ... I wonder if that split corresponds to REITs that just buy-and-rent-out vs those that build-and-rent-out ....


I think you may have hit the nail on the head with the 'So, it seems that there are two kinds of REITs, those that hire management companies to run their affairs and those that do it all "in-house".'

This may be why I'm struggling to find anything on Hansteen...because they run the show themselves. Saying that the guys who run Supermarket Income REIT, from what I remember, have created their own third-party advisory company which is paid a management fee in shares from investors annually. Looks like it's just a way of making a bit more money upfront.

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Re: Hansteen Holdings Ongoing Charges?

#235464

Postby 77ss » July 10th, 2019, 9:21 am

mc2fool wrote:....
I don't know about "most" having a management fee (or not), and I'm not sure what you mean by irrelevant due to "a question of definition"; AFAIAA listing on the AIC website is a matter of whether the company has chosen to be a member of the AIC or not.

....


I don't think its quite as simple as that. On the recent thread on the AIC Income Builder, I queried the exclusion of some (but not all) REITs. The response was:

SRGO is not a company within our universe. It is a commercial property company, which carries a different listing chapter than standard Investment Companies. Same for Hansteen.

Your latter point about 2 different types if REITs is interesting. BBOX, which is included in the AIC system, manages itself in a different way from SGRO and HSTN. I suspect more expensively too - but I'm just cynical.

Reverting to Hansteen itself. I have held it for a shade over 5 years now. It hasn't done as well as Segro (which has been a real star), but with an XIRR of 11.6% I'm not complaining too much - or worrying about fees/charges etc.

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Re: Hansteen Holdings Ongoing Charges?

#235470

Postby Dod101 » July 10th, 2019, 9:39 am

Surely that is the point; that there some REITS which contract out the running of the business to another, hence a management fee and others like British Land, Land Securities and Segro which manage it all inhouse. Not unlike a standard investment trust, most of which contract out the management to others and some such as Caledonia and Scottish Investment Trust which do it all in house.

Hansteen appears to manage everything in house and so there will be no quoted management charge.

Dod

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Re: Hansteen Holdings Ongoing Charges?

#235490

Postby Alaric » July 10th, 2019, 10:51 am

Dod101 wrote:Hansteen appears to manage everything in house and so there will be no quoted management charge.


Also like SEGRO, they regard themselves as a commercial property operation and aren't members of AIC. SEGRO and similar were around long before REITs were introduced and converted to REITs to get the pass through tax treatment on rental income.

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Re: Hansteen Holdings Ongoing Charges?

#235493

Postby mc2fool » July 10th, 2019, 10:55 am

77ss wrote:I don't think its quite as simple as that. On the recent thread on the AIC Income Builder, I queried the exclusion of some (but not all) REITs. The response was:

SRGO is not a company within our universe. It is a commercial property company, which carries a different listing chapter than standard Investment Companies. Same for Hansteen.

Interesting ... well most REITs are commercial property companies but I wonder what "a different listing chapter" actually means. AFAICS it wasn't expanded on in that thread. I wonder if it's to do with buy-and-rent-out vs those that build-and-rent-out...........

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Re: Hansteen Holdings Ongoing Charges?

#235502

Postby Dod101 » July 10th, 2019, 11:22 am

mc2fool wrote:
77ss wrote:I don't think its quite as simple as that. On the recent thread on the AIC Income Builder, I queried the exclusion of some (but not all) REITs. The response was:

SRGO is not a company within our universe. It is a commercial property company, which carries a different listing chapter than standard Investment Companies. Same for Hansteen.

Interesting ... well most REITs are commercial property companies but I wonder what "a different listing chapter" actually means. AFAICS it wasn't expanded on in that thread. I wonder if it's to do with buy-and-rent-out vs those that build-and-rent-out...........


I think we need to get a definition of an investment company compared to a commercial trading company. The AIC is after all the Association of Investment Companies. I have not been able to find a definition for an investment company other than it is a company dealing in investments!

I think the other point is that REITS are not very well named because they mostly have very little in common with investment trusts, except that they get some tax exemptions in exchange for shelling out most of their revenue. As we know not even all their revenue just that derived from rental income in the case of a REIT which can and do have other business running under the same roof as it were.

Dod

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Re: Hansteen Holdings Ongoing Charges?

#235732

Postby 77ss » July 10th, 2019, 11:32 pm

mc2fool wrote:
77ss wrote:I don't think its quite as simple as that. On the recent thread on the AIC Income Builder, I queried the exclusion of some (but not all) REITs. The response was:

SRGO is not a company within our universe. It is a commercial property company, which carries a different listing chapter than standard Investment Companies. Same for Hansteen.

Interesting ... well most REITs are commercial property companies but I wonder what "a different listing chapter" actually means. AFAICS it wasn't expanded on in that thread. I wonder if it's to do with buy-and-rent-out vs those that build-and-rent-out...........


Yes, I didn't fully understand the reponse - but it did answer my underlying question about the comprehensiveness if the AIC Income Builder and I wasn't interested in pursuing the matter.

Of the three REITs I hold/have held, Hansteen is purely a buy and rent outfit. Both Segro and Tritax Big Box do build and rent, but SGRO is not in AICs universe whereas BBOX is.


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