The Lemon Fool

Perhaps I am a victim to media messaging but I feel a little that the sentiment towards property is maybe improving.

Currently I have zero exposure, sold out of all my property plays NRR Bland and Marstons rather luckily in Jan but I'm beginning to think now may be a reasonable entry point.


Are there any strong opinions as to where to go here. This will be long term hold 20 years plus so volatility I am OK with at these levels.

I Like the idea of getting exposure to countryside housing but no idea how to play that, and I think office space outside of London could be interesting.

I have no great urge and would certainly keep clear of B Land and Land Securities. My only exposure is via Segro and Primary Health Properties. Both have done well for me, but of course property is a big area, and you might like to take a leaf out of SavorHardin's book and look at the Canadian Brookfield Asset Management who have a good record and are active in the UK, mostly London, market. It would even give you indirect exposure to B Land as they own just under 10% of it. It is in my sights although I may never buy it.

Dod

Two that have picked my interest and wallet are SREI and EPIC.

Both worthy of investigation with threads running on them.

Thanks have had a quick look.

I'm thinking more a long the lines of Brookfield. I have 2% of my folio in these already, admittedly as more of a renewables play, the current price is roughly 20 percent higher than my wac. Valuation does not look unreasonable but I'm hesitant to increase my holdings here. I do like the company.


The others EPIC and Schroders are a bit too special situation for me. Really I'm looking for a long term hold that is at a fair price due to current market conditions. Maybe doubling my BAM holding is the way to go here.

I would look at what is rented and LTV

Retail looks like its taking the brunt and high levels of gearing wont leave much wiggle room if the downturn is prolonged.

Still if everyone is selling retail it will find value at some point. It might also be worth looking at the tenants, Government and those trading well currently. There is a healthcare one that should keep its income turning over. Others have mentioned some to avoid and I also hold SREI and topped up recently. LTV 20% from memory, big discount to NAV. I did stop the divi but reinstated at 50% and has started buying back its own shares.

You "know" NRR, it has been too retail heavy for me but see comment above
RGL picks winning cities another cutter (who hasn't) higher LTV

Probably more for the pipeline of opportunity TOWN but its just how will they fund that pipeline. Its Leeds and Manchester based so more likely to be hit by covid restrictions being in the north.

Most property seem harder hit now that inn financial crisis. SREI is probably the safest of those mentioned. you could also look at Sheds big warehouses for online shoppers something like BBOX

Walrus – I’m intrigued by your comment: “The others EPIC and Schroders are a bit too special situation for me”.

I can understand such a comment with relation to EPIC, as it is a REIT committed to Retail Warehouse; though that may now be no bad thing due to the reported traffic returning to that sector. Allied to the 44% discount and 7.9% yield EPIC may be considered good value at 50.7p.

The comment referring to SREI is surely misplaced as SREI is a generalist fund with a portfolio allocation of: Office – 40%; Industrial – 29%; Retail W’hse – 12%; Retail (inc. convenience retail) – 12%; Specialist – 7%. 82% of the portfolio is in fast growing cities and the Regions; with only 9% overall in London. Once again, the 42% discount and 4.6% yield provides value @ 33.5p.

To return to your original post, you state: “I like the idea of getting exposure to countryside housing but no idea how to play that, and I think office space outside of London could be interesting.”

# Countryside housing – I too have no idea how you play that; though perhaps you may be looking at a housebuilder in that regard

# Regional office – yes indeed, could be a major beneficiary of central city employers looking to relocate part of their operations out to regional towns and rural environments. The Estates Gazette reports a significant growth in such enquiry. Regional Properties (RGL) is an obvious beneficiary with 78% of its portfolio in the sector. Again, at 65.5p the 36.2% discount and 9.2% yield provides obvious value.

Incidentally, adding to your low yielding BAM holding would not seem to satisfy your original objective.

Alternative asset manager BAM has interests across property/infrastructure/renewables and business; mostly overseas.

SKYSHIP wrote:Walrus – I’m intrigued by your comment: “The others EPIC and Schroders are a bit too special situation for me”.

I can understand such a comment with relation to EPIC, as it is a REIT committed to Retail Warehouse; though that may now be no bad thing due to the reported traffic returning to that sector. Allied to the 44% discount and 7.9% yield EPIC may be considered good value at 50.7p.

The comment referring to SREI is surely misplaced as SREI is a generalist fund with a portfolio allocation of: Office – 40%; Industrial – 29%; Retail W’hse – 12%; Retail (inc. convenience retail) – 12%; Specialist – 7%. 82% of the portfolio is in fast growing cities and the Regions; with only 9% overall in London. Once again, the 42% discount and 4.6% yield provides value @ 33.5p.

To return to your original post, you state: “I like the idea of getting exposure to countryside housing but no idea how to play that, and I think office space outside of London could be interesting.”

# Countryside housing – I too have no idea how you play that; though perhaps you may be looking at a housebuilder in that regard

# Regional office – yes indeed, could be a major beneficiary of central city employers looking to relocate part of their operations out to regional towns and rural environments. The Estates Gazette reports a significant growth in such enquiry. Regional Properties (RGL) is an obvious beneficiary with 78% of its portfolio in the sector. Again, at 65.5p the 36.2% discount and 9.2% yield provides obvious value.

I read both the threads, they appeared to be short term plays on uk property bounce backs rather than investments I'd be comfortable holding long term.

I will take closer look at the Schroders portfolio. RGL looks interesting.