The Lemon Fool

dealtn wrote:
Can those still living with parents, or in House of Multiple Occupants, even married couples work in a shared way?

A possibly logical development could be that redundant "large" offices in or adjacent to residential areas are given a new role as "rent a desk". That probably doesn't save much for employers, but does save employee travel costs and time.

Lots of interesting viewpoints from both sides
One thing that strikes me, is that those commenting on the benefits of working from home (as I would love to), are probably professionals or middle management level and above.
Probably have a home office, more advanced in years, a bit of work ethic or skin in the game, and a family.

What about the lower level, usually younger worker? You could say that all call centre workers could work from home for example.
However, stories from the wife who worked in one about 15 years back, give the impression of a poorly paid and unmotivated workforce with a high level of absenteeism & 'sickness' that needed to be actively managed.

Time will tell.

dealtn wrote:Can those still living with parents, or in House of Multiple Occupants, even married couples work in a shared way? What happens if they "need" to rent a room at the local library, or rent-an-office? Is that their cost or can that be passed on to the employer, and if so what stops others that don't need to do this from being given an "allowance".

I suspect the market will decide. If jobs are in short supply people will put up with more than they will if workers are in short supply. In theory removing EU free-movement will help the workers, but we already have a lot of non-EU nationals working in the UK and I've heard nothing that suggests their numbers will decrease. We're also probably going to have a recession which will further tilt the balance of power to employers. The impact of any government policy to redress the imbalance and the potential of legal action could be significant as well.

Thanks for posting that piece on RGL. It's in my intensive care ward and I'd been looking for reasons why it hadn't really become less volatile apart from spill over from other parts of the sector. Keeping them for now.

My wife added some RGL at the start of the week. Now our largest single-stock position.

I too feel good about the future for this holding. It’s too cheap. Given employers will need to give staff in the office more room, I think that the effect of more home working is much overstated. Furthermore, much of RGL’s stock is town/city centre offices which can be converted to residential if needs be. The discount to NAV is too big.

baldchap wrote:Lots of interesting viewpoints from both sides
One thing that strikes me, is that those commenting on the benefits of working from home (as I would love to), are probably professionals or middle management level and above.
Probably have a home office, more advanced in years, a bit of work ethic or skin in the game, and a family.

What about the lower level, usually younger worker? You could say that all call centre workers could work from home for example.
However, stories from the wife who worked in one about 15 years back, give the impression of a poorly paid and unmotivated workforce with a high level of absenteeism & 'sickness' that needed to be actively managed.

Time will tell.

I am jumping into this which is not usually a good idea but my daughter, her husband and now granddaughter are all working from home and it seems to work well if a bit cramped. My daughter is a trainer in a call centre and granddaughter is about to be a bod in the same call centre and plans to work from her Uni flat in the coming months. My daughter reckons that the call centre office has been empty and virtually unmanned since the end of March and she doubts that it will ever be fully manned again. They are able to give 24/7 cover to incoming public calls working from home and training courses can be done online via Zoom. Amazing what can be done. How long do you really think that an employer is going to leave a whole office building empty? The future for REITS seems to me to be with the SEGRO model, very large sheds to cater for e commerce.

Presumably there will still be a need for office buildings. For instance said son in law is likely to be working one week at home, the other in the office and that way the employer can maintain the current premises and accommodate social distancing, but if social distancing can be removed it is likely that some form of home working will continue and much less office space could be required.

I do not know how this would impact on Regional REIT though.

Dod

Update on rent collection:
https://www.londonstockexchange.com/new ... e/14606895

ReallyVeryFoolish wrote:Dod101, I see exactly where you are coming from with this. I have been worried too about my overweight holding in RGL (15% of total portfolio value). I am getting a bit more relaxed as time passes this last few months. The news from RGL has to date been rather encouraging. Including what I posted earlier about some new rentals. As this was a sector I knew very little at all about, before investing, so I did far more due diligence than I usually do. I became convinced that the management of the portfolio and the strategies underpinning the way the business is run are very good indeed. In Dod terms, it smelled good. I was rewarded by terrific dividends every quarter and a share price appreciation of around 20% on top. Then the wheels came off the world markets.

The company hasn't changed, the management hasn't changed. The business environment has changed. I got rather nervous a few weeks back. But looking at the situation now, I still believe in the management. If there's a property portfolio management team out there who can get through the current situation, it's RGL. The present share price is a victim of the awful and justified sector wide sentiment. But RGL is not your typical property company. Far from it. Presently, I continue to do nothing but hold on.

RVF.

Hi RVF

Yes, RGL is a core holding for me. However I'd never risk 15% of my shareholding on anything. Not the place for a discussion of portfolio holdings, but I'd strongly recommend rebalancing. Shelford

Rent receipts at almost 100%; decent profits earned on disposals, attractive lease renewals coming through. OK, the dividend situation is a little disappointing, but I can see where they're coming from.

From an income perspective, RGL seems to tick a lot of boxes. Yet the share price indicates that the market is nervous.

Curious.

MDW1954

Below is an extract from my spreadsheet on 16 secondary propcos.

# Extracted to show those on 40%+ discounts

# AIRE & RGL included because of the great yields

# All NAV stats are to Jun'20, exc. MCKS still to Mar'20

EPIC SP....NAV...Disc...Divi..Yield
---------------------------------------------
AIRE 51.00 83.60. 39.00 5.00 9.80
BCPT 67.20 120.70 44.30 3.00 4.46
BREI 52.00 96.60. 46.20 2.50 4.81
EPIC 49.50 90.24. 45.10 4.00 8.08
MCKS 190.00 329.00 42.20 7.20 3.79
RGL 66.00 102.60. 35.70 6.00 9.09
SLI 46.80 79.60.. 41.20 2.86 6.10
SREI 32.85 57.70. 43.10 1.54 4.70

"You pays your money you takes your choice"....but sure looks to be
some great value out there, especially those showing good rent collections.

MDW1954 wrote:From an income perspective, RGL seems to tick a lot of boxes. Yet the share price indicates that the market is nervous.

Yes it's hard to see why they've been marked down so much. Perhaps been tarred with the wrong brush as regards those exposed to offices at greater risk of being emptied. My average buying price is just over 101p and I was happy with that pre-covid. Only reason I haven't topped up is that with others missing dividends they make up about 7% of my share-based income, but that's an artificial figure. I think I feel a wee purchase coming up.

Spiderbill

RVF - 80p - agreed, that would seem a very reasonable recovery target - back up to the trendline resistance.

Herewith a very interesting article supporting the theory that the regional office players might well prove to be beneficiaries of a move out of the cities. Acknowledgement to 18BT over on ADVFN's RGL thread:

https://uk.advfn.com/cmn/fbb/thread.php3?id=29245091
=====================================================

Article publicised by RELX, owners of Estates Gazette:

EG, a market-leading supplier of data, news and analytics products and services for the UK commercial real estate market announced today the findings of its inaugural EG Propertylink Occupier Sentiment Report, which were made public for the first time. The report found that interest in offices in satellite and regional locations has surged since lockdown restrictions eased and that many regional and satellite markets saw the number of occupier and investor enquiries in June and July 2020 exceed the January 2020 levels by a wide margin. [Truncated]

SKYSHIP wrote:RVF - 80p - agreed, that would seem a very reasonable recovery target - back up to the trendline resistance.

Herewith a very interesting article supporting the theory that the regional office players might well prove to be beneficiaries of a move out of the cities. Acknowledgement to 18BT over on ADVFN's RGL thread:

https://uk.advfn.com/cmn/fbb/thread.php3?id=29245091

SP now: 66.10p. Yield: 12.49%. Discount to NAV: -36.22%

Dare I top up?

https://www.hl.co.uk/shares/shares-sear ... it-ltd-npv

richfool wrote:

SKYSHIP wrote:RVF - 80p - agreed, that would seem a very reasonable recovery target - back up to the trendline resistance.

Herewith a very interesting article supporting the theory that the regional office players might well prove to be beneficiaries of a move out of the cities. Acknowledgement to 18BT over on ADVFN's RGL thread:

https://uk.advfn.com/cmn/fbb/thread.php3?id=29245091

SP now: 66.10p. Yield: 12.49%. Discount to NAV: -36.22%

Dare I top up?

https://www.hl.co.uk/shares/shares-sear ... it-ltd-npv

SP now: 60.00p. We should have waited!

Further to my earlier post re The Estates Gazette article - it can be viewed over at ADVFN:

https://uk.advfn.com/cmn/fbb/thread.php ... 1&from=858

tramrider - at 60.5p the discount is 41% and the yield 9.92%. That 12%+ figure is just an HL stats mistake.

My wife added 80k at 61p today. Now her largest single holding.

Strongly convinced that 10% yield is secure. Property market underpinned by availability of credit. If RGL's portfolio value and rental collections dropped to the levels implied by the share price, Lloyds and RBS are gone. Hence the BoE would have intervened in the credit markets long before.

6 lean months to get through for cashflow, then back to business in my view.

Long ago, what is known as 'yield compression' distorted market value.

Yield compression happens when inexperienced investors appraise on current yield and conclude that the proposition must surely be 'cheap' compared to the interest rates and cost of borrowing, Hence, buyers pay more for the property regardless of property fundamentals.

Prior to yield compression, the property fundamental is that high yield (on rack-rented property) reflects little or no potential for rental/ capital growth, whereas low yield reflects growth prospects. Yield compression has done away with the difference, such that it is, unless one has the knowledge, difficult to assess the long-term potential for a proposition.

The principal areas for rental growth are London and the South-East which is why propcos whose holdings are so-oriented are rated more highly. Regional property (provincial as it was known when i lived in London) has always been regarded as having limited growth prospects, possibly but not necessarily just about keeping pace with inflation. (There is no correlation between inflation and market value.)

In the context of a share price, I suggest a mistake to think 10% yield secure. The only reason for a dividend yield is the market's assessment of the relationship between the propco's NAV and dividend; also the liquidity of the shares and the ability of the propco to collect rent payments.

Spet0789 wrote:My wife added 80k at 61p today. Now her largest single holding.

Strongly convinced that 10% yield is secure. Property market underpinned by availability of credit. If RGL's portfolio value and rental collections dropped to the levels implied by the share price, Lloyds and RBS are gone. Hence the BoE would have intervened in the credit markets long before.

6 lean months to get through for cashflow, then back to business in my view.

The yield on any share is derived from the relationship between the share price and the dividend so I guess what Spet0789 means is that he thinks the current dividend is secure. The yield will then depend on what the share price does. A yield of 10% does not usually imply a secure dividend. In fact it usually suggests that the market thinks a dividend cut is likely. Maybe in the case of Regional REIT the market simply does not know because as BNC has just said, it is, these days, not simply the rent at which a property is let that matters but the ability of the property company to collect it. Presumably Regional REIT is confident about that.

Dod

Dod101 wrote:

Spet0789 wrote:My wife added 80k at 61p today. Now her largest single holding.

Strongly convinced that 10% yield is secure. Property market underpinned by availability of credit. If RGL's portfolio value and rental collections dropped to the levels implied by the share price, Lloyds and RBS are gone. Hence the BoE would have intervened in the credit markets long before.

6 lean months to get through for cashflow, then back to business in my view.

The yield on any share is derived from the relationship between the share price and the dividend so I guess what Spet0789 means is that he thinks the current dividend is secure. The yield will then depend on what the share price does. A yield of 10% does not usually imply a secure dividend. In fact it usually suggests that the market thinks a dividend cut is likely. Maybe in the case of Regional REIT the market simply does not know because as BNC has just said, it is, these days, not simply the rent at which a property is let that matters but the ability of the property company to collect it. Presumably Regional REIT is confident about that.

Dod

My yield on purchase is 10%... that's what I focus on. But yes, I think that at this level, the dividend is very secure, looking through the potential noise of the next 1-2 years. I think the market is wrong on RGL. Time will tell...

Spet0789 wrote:My yield on purchase is 10%... that's what I focus on. But yes, I think that at this level, the dividend is very secure, looking through the potential noise of the next 1-2 years. I think the market is wrong on RGL. Time will tell...

I know little about Regional REIT and your opinion is all that matters for you. If you are right then you will do well. I wish you well.

Dod