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Regional REIT.
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- Lemon Slice
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Re: Regional REIT.
RGL tipped in yesterday's IC. Frankly, for those of us on this thread who already know of RGL and its palpable attractions, the Jonas Crosland piece added nothing new, nothing we don't already know. It did though further publicise RGL; so for holders, no bad thing in itself.
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the last 2paras are as follows:
The dividend yield is one of the highest in the sector, and while this is expected to be only 93 per cent covered by after-tax earnings, recent disposal profits are expected to make up the shortfall.
IC View
Investors may be donning their tin hats to protect them from any Brexit fallout, but the reality is that demand for office and commercial space in the major regions outside London is holding up very well. In the unlikely event that the economy collapses then all bets are off, but assuming there is a workable outcome to Brexit, shares in Regional REIT, trading at a 25 per cent discount to forecast net asset value (NAV), may be due a rerating. Buy.
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the last 2paras are as follows:
The dividend yield is one of the highest in the sector, and while this is expected to be only 93 per cent covered by after-tax earnings, recent disposal profits are expected to make up the shortfall.
IC View
Investors may be donning their tin hats to protect them from any Brexit fallout, but the reality is that demand for office and commercial space in the major regions outside London is holding up very well. In the unlikely event that the economy collapses then all bets are off, but assuming there is a workable outcome to Brexit, shares in Regional REIT, trading at a 25 per cent discount to forecast net asset value (NAV), may be due a rerating. Buy.
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- Lemon Slice
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Re: Regional REIT.
Another month to wait for the Finals and the Dec'18 NAV. In the meantime we heard this week of the final dividend - as expected 2.5p making a total of 8.05p for the year.
The sp continued to climb; and at the closing price on Friday of 103.4p the yield still = a best in sector 7.8%...
The sp continued to climb; and at the closing price on Friday of 103.4p the yield still = a best in sector 7.8%...
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- Lemon Slice
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Re: Regional REIT.
SKYSHIP wrote:Another month to wait for the Finals and the Dec'18 NAV. In the meantime we heard this week of the final dividend - as expected 2.5p making a total of 8.05p for the year.
The sp continued to climb; and at the closing price on Friday of 103.4p the yield still = a best in sector 7.8%...
Thanks for the info about the divi. Yes the sp has recovered very quickly since Xmas - caught me out as I'd intended to buy more at around 92-94p but was down with flu for three weeks and missed my chance. Looking good for the future though.
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- Lemon Slice
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Re: Regional REIT.
Post the excellent Finals; herewith a CEO interview and the RGL Presentation:
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Edison interview with CEO. All looks good and on track to meet their objective return of 10%+ in 2019:
https://tinyurl.com/y3eor8ar
Mar'19 - Finals Presentation (y/e Dec'18):
http://www.regionalreit.com/~/media/Fil ... 0FINAL.pdf
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Edison interview with CEO. All looks good and on track to meet their objective return of 10%+ in 2019:
https://tinyurl.com/y3eor8ar
Mar'19 - Finals Presentation (y/e Dec'18):
http://www.regionalreit.com/~/media/Fil ... 0FINAL.pdf
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- Lemon Slice
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Re: Regional REIT.
Growth Opportunities Under Consideration
Regional REIT (LSE: RGL), the regional real estate investment specialist focused on building a diverse portfolio of income producing regional UK core and core plus office and industrial property assets, announces that it is considering an equity fundraise to take advantage of its growing near-term pipeline of opportunities in the investment market. The funds would be deployed in line with its investment policy with a view to delivering further value to its shareholders.
Any such equity fundraise is expected to follow the publication of a prospectus, with further announcements to follow in due course.
https://www.londonstockexchange.com/exc ... 77601.html
Regional REIT (LSE: RGL), the regional real estate investment specialist focused on building a diverse portfolio of income producing regional UK core and core plus office and industrial property assets, announces that it is considering an equity fundraise to take advantage of its growing near-term pipeline of opportunities in the investment market. The funds would be deployed in line with its investment policy with a view to delivering further value to its shareholders.
Any such equity fundraise is expected to follow the publication of a prospectus, with further announcements to follow in due course.
https://www.londonstockexchange.com/exc ... 77601.html
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- Lemon Half
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Re: Regional REIT.
I took a look at the Balance Sheet. There seems a lot of borrowing in there.
Total Assets in £ million 848, but Net Assets only £ 430. The difference being borrowings and ZDP (Zero dividend Preference Shares?)
Explains the high yield to some extent, given the geared risks to shareholder value in the event of a property downturn or crash, or the costs of borrowing shooting up.
Total Assets in £ million 848, but Net Assets only £ 430. The difference being borrowings and ZDP (Zero dividend Preference Shares?)
Explains the high yield to some extent, given the geared risks to shareholder value in the event of a property downturn or crash, or the costs of borrowing shooting up.
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- Lemon Slice
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Re: Regional REIT.
FormOverFunction gave this quote from an RNS
The full announcement is here https://www.investegate.co.uk/regional- ... 00023291Z/
And, of course, the AGM is this coming week on WEDNESDAY - when one would expect some investors to raise questions about this.
It seems to me that the pricing of any equity raise is very difficult and is bound to offend someone (or lots of someones), so perhaps the only fair way is to go back to the old fashioned way of raising new capital - a rights issue. Everyone then has the chance to take up their rights, sell them or buy more as they fancy.
What do other Fools think?
Also, I would expect any statements made as the AGM to be fairly bullish insofar as the rules requiring all investors (i.e. those who do not attend) to be treated equally are satisfied.
I would probably take up any rights - and could buy more if the deal is right because I think they are really trying to deliver on this statement in the RNS.
What would also be fun is if they structured any such rights issue along the lines of the United Utils "A" share issue made shortly after the turn of the millennium. That was fun and some of us made money (quite a lot actually) swapping between the two classes.
Growth Opportunities Under Consideration
Regional REIT (LSE: RGL), the regional real estate investment specialist focused on building a diverse portfolio of income producing regional UK core and core plus office and industrial property assets, announces that it is considering an equity fundraise to take advantage of its growing near-term pipeline of opportunities in the investment market. The funds would be deployed in line with its investment policy with a view to delivering further value to its shareholders.
Any such equity fundraise is expected to follow the publication of a prospectus, with further announcements to follow in due course.
The full announcement is here https://www.investegate.co.uk/regional- ... 00023291Z/
And, of course, the AGM is this coming week on WEDNESDAY - when one would expect some investors to raise questions about this.
Anyone going ?The Company further announces that it will hold its Annual General Meeting at the offices of Macfarlanes LLP, 20 Cursitor Street, London EC4A 1LT, on Thursday 23 May 2019 at 11.00 am (the "AGM").
It seems to me that the pricing of any equity raise is very difficult and is bound to offend someone (or lots of someones), so perhaps the only fair way is to go back to the old fashioned way of raising new capital - a rights issue. Everyone then has the chance to take up their rights, sell them or buy more as they fancy.
What do other Fools think?
Also, I would expect any statements made as the AGM to be fairly bullish insofar as the rules requiring all investors (i.e. those who do not attend) to be treated equally are satisfied.
I would probably take up any rights - and could buy more if the deal is right because I think they are really trying to deliver on this statement in the RNS.
Regional REIT pursues its investment objective by investing in, actively managing and disposing of regional core and core plus property assets. It aims to deliver an attractive total return to its Shareholders, targeting greater than 10% per annum, with a strong focus on income supported by additional capital growth prospects.
What would also be fun is if they structured any such rights issue along the lines of the United Utils "A" share issue made shortly after the turn of the millennium. That was fun and some of us made money (quite a lot actually) swapping between the two classes.
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- Lemon Slice
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Re: Regional REIT.
Firstly,
Alaric - are you used to buying propcos? If so you will know that an LTV of just 38% is not out of line, especially when their debt costs 3.5% fixed for 7yrs; and their average return is 7%!
As for this likely equity issue, I smell dilution and exemption, so have sadly sold 2/3rds of my holding. I am keeping a 1/3rd so as to qualify for any rights or cheap general offer.
Alaric - are you used to buying propcos? If so you will know that an LTV of just 38% is not out of line, especially when their debt costs 3.5% fixed for 7yrs; and their average return is 7%!
As for this likely equity issue, I smell dilution and exemption, so have sadly sold 2/3rds of my holding. I am keeping a 1/3rd so as to qualify for any rights or cheap general offer.
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- Lemon Half
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Re: Regional REIT.
SKYSHIP wrote: If so you will know that an LTV of just 38% is not out of line, especially when their debt costs 3.5% fixed for 7yrs; and their average return is 7%!
Their combined dividend and PID yield is a bit higher than the rest of the sector. They distribute the lot, so is it that the out of London market offers very high rents to property value, or is it more to do with their lowish cost gearing? Or just their shares are out of favour?
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- Lemon Quarter
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Re: Regional REIT.
SKYSHIP wrote:Firstly,
Alaric - are you used to buying propcos? If so you will know that an LTV of just 38% is not out of line, especially when their debt costs 3.5% fixed for 7yrs; and their average return is 7%!
As for this likely equity issue, I smell dilution and exemption, so have sadly sold 2/3rds of my holding. I am keeping a 1/3rd so as to qualify for any rights or cheap general offer.
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i think i will follow suit...
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- Lemon Slice
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Re: Regional REIT.
Alaric:
"Their combined dividend and PID yield is a bit higher than the rest of the sector. They distribute the lot, so is it that the out of London market offers very high rents to property value, or is it more to do with their lowish cost gearing? Or just their shares are out of favour?"
# Q: "is it that the out of London market offers very high rents to property value" - A: property values are lower in the regions, but rents are good and growing. So regionals offer portfolios with higher yields
# Q: "is it more to do with their lowish cost gearing" - A: debt costs are the samer as elswhere - everybody has refinanced low and refinanced long
# Q: "Or just their shares are out of favour" - A: RGL are just off their all-time high; not out of favour at all. Though they were back in December (a great opportunity then!)
"Their combined dividend and PID yield is a bit higher than the rest of the sector. They distribute the lot, so is it that the out of London market offers very high rents to property value, or is it more to do with their lowish cost gearing? Or just their shares are out of favour?"
# Q: "is it that the out of London market offers very high rents to property value" - A: property values are lower in the regions, but rents are good and growing. So regionals offer portfolios with higher yields
# Q: "is it more to do with their lowish cost gearing" - A: debt costs are the samer as elswhere - everybody has refinanced low and refinanced long
# Q: "Or just their shares are out of favour" - A: RGL are just off their all-time high; not out of favour at all. Though they were back in December (a great opportunity then!)
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- Lemon Quarter
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Re: Regional REIT.
I see Regional REIT has launched a share issue to raise £50m to take advantage of new property investment opportunities.
http://investing.thisismoney.co.uk/news ... d/6473188/
And Peel Hunt has downgraded the stock from "buy" to "restricted". RGL is currently down 0.8p @107.60
http://investing.thisismoney.co.uk/news ... d/6473267/
Regional REIT launched a share issue to raise £50m to take advantage of new property investment opportunities.
New shares in the company would be issued at 106.5p each, representing a 1.8% discount to their closing price on Friday.
Shareholders could participate in an open offer on a one-for-eight basis.
http://investing.thisismoney.co.uk/news ... d/6473188/
And Peel Hunt has downgraded the stock from "buy" to "restricted". RGL is currently down 0.8p @107.60
http://investing.thisismoney.co.uk/news ... d/6473267/
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- Lemon Slice
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Re: Regional REIT.
richfool wrote:I see Regional REIT has launched a share issue to raise £50m to take advantage of new property investment opportunities.http://investing.thisismoney.co.uk/news/article/id/6473188/Regional REIT launched a share issue to raise £50m to take advantage of new property investment opportunities.
New shares in the company would be issued at 106.5p each, representing a 1.8% discount to their closing price on Friday.
Shareholders could participate in an open offer on a one-for-eight basis.
And Peel Hunt has downgraded the stock from "buy" to "restricted". RGL is currently down 0.8p @107.60
http://investing.thisismoney.co.uk/news ... d/6473267/
This is from the RNS
-- Proposed issue of up to 46,948,357 New Ordinary Shares pursuant to the Capital Raising targeting gross proceeds of approximately GBP50 million
-- Qualifying Shareholders will be offered the opportunity to participate in the Open Offer on the basis of 1 New Ordinary Share for every 8 Existing Ordinary Shares
-- Qualifying Shareholders will also be offered the opportunity to subscribe for New Ordinary Shares in addition to their Open Offer Entitlements under the Excess Application Facility
-- The Board has reserved the right to increase the size of the Capital Raising by up to 46,948,357 New Ordinary Shares
-- The Issue Price is 106.5 pence per New Ordinary Share. This represents a discount of 1.8 per cent. to the Closing Price per Ordinary Share on 21 June 2019 of 108.4 pence per Ordinary Share
-- The Issue Price represents a discount of 7.8 per cent. to the audited EPRA Net Asset Value per Ordinary Share as at 31 December 2018 of 115.5 pence per Ordinary Share
It's indicative of the fact that some REIT managers see opportunity in the chaos at the moment.
What on earth does 'Restricted' mean as a change from 'Buy'
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- 2 Lemon pips
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Re: Regional REIT.
I believe that "restricted" reflects the fact that because the bank is involved in the equity raising it is conflicted from providing an investment recommendation on its equity research. Removing the rating is part of managing the conflict of interest that would otherwise arise.
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- Lemon Slice
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Re: Regional REIT.
I see the share price this morning has dropped to the same price as the offer, so there is no longer any discount at all (other than trading costs if bought normally). Is it therefore worth taking up the offer?
I'm fairly well disposed to the share and not averse to buying more, but this doesn't feel like a great deal and I wonder if the price will drop after the offer. Or am I missing something? Thoughts welcomed.
I'm fairly well disposed to the share and not averse to buying more, but this doesn't feel like a great deal and I wonder if the price will drop after the offer. Or am I missing something? Thoughts welcomed.
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Re: Regional REIT.
Well I reinvest my dividends and will likely take up the1:8 offer as a good top up of a hopefully long term holding. I won’t make that decision until closer to the date though. On the face of it, there’s not a significant advantage for current holders, but all things being equal our gain will be in the future use of the money raised.
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Re: Regional REIT.
Do I understand this correctly? According to my broker website the first offer is the 1 for every 8 shares at 106.5p closing 15th July and the second is an open offer at the same price closing 18th July. If oversubscribed I assume the difference here is that offer 2 would be subject to scaling?
GN
GN
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- Lemon Slice
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Re: Regional REIT.
As the 14th July deadline approaches, anyone further views on the Open Offer?
With the SP sitting at 107p and the offer being 106.5p there isn't any obvious immediate gain.
With the SP sitting at 107p and the offer being 106.5p there isn't any obvious immediate gain.
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- Lemon Slice
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Re: Regional REIT.
BrummieDave wrote:As the 14th July deadline approaches, anyone further views on the Open Offer?
With the SP sitting at 107p and the offer being 106.5p there isn't any obvious immediate gain.
Hi BrummieDave
my reading of the share price is I can currently buy RGL at 107.4p whilst its sell price is 107p.
The offer price is 106.5p, about 1% less (than 107.4p) - if you are a qualifying holder for the open offer to apply.
So currently around 1% is the immediate gain.
If we had bought them at 3:15 on the 2nd of July, last Tuesday, we could have purchased at 106.4p, just under the offer price - but I was taking advantage of a sunny afternoon instead.
Anyway, tin hat on in case I am wrong here
midgesgalore
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Re: Regional REIT.
BrummieDave wrote:As the 14th July deadline approaches, anyone further views on the Open Offer?
With the SP sitting at 107p and the offer being 106.5p there isn't any obvious immediate gain.
I have gone along with taking up the offer, as I get the possibly/slightly discounted price and don't incur any trading fees. The offer price is at a discount to NAV. I note recent trades have been in the 107.20 - 107.80 range.
But that said, I was in two minds as I am somewhat overweight property and the sector is not without its risks, particularly with Brexit and retail uncertainties around.
I also hold SLI and WHR in that sector.
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