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God save the King!
God save His people.
When children get stabbed downtown,
we know that it is time to run.
God save His people.
When children get stabbed downtown,
we know that it is time to run.
Alignment ( Date: 12-Aug-2024 22:12) Posted:
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The way the markets vomited on Liz Truss after she came up with that geh kiang budget shows how close to the edge the UK is.
finjungle ( Date: 11-Aug-2024 16:02) Posted:
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Just be aware that the UK gov is broke and most of the propertis are let to the gov ministries!
Alignment ( Date: 11-Aug-2024 13:17) Posted:
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Now UK has race riots as well. Corporates telling their non white people to work from home if they feel threatened by the thugs.
Elite UK Reit posts 19.5% lower H1 DPU of £ 0.014
Distributable income falls 1.7% to £ 9.2 million
ELITE UK Real Estate Investment Trust&rsquo s (Reit) distribution per unit (DPU) for the first half of the year fell 19.5 per cent to £ 0.014 from £ 0.0174 in the corresponding period the year before, based on a 90 per cent payout ratio.
The manager of the trust on Wednesday (Aug 7) also posted a half-year revenue of £ 18.6 million (S$31.3 million), down 0.6 per cent from £ 18.7 million in H1 FY2023.
This decline was attributed to a lower asset base, compared to the first half of the previous year.
The manager, however, noted that a better comparison across the first halves of FY2023 and 2024 should be based on the units in issue as at Jun 30, 2024.
This means that for a like-for-like comparison, adjusted DPU for the first half of FY2023 was £ 0.0143 &ndash based on the units in issue in H1 FY2024.
Elite UK Reit posted a 4.7 per cent year-on-year fall in net property income (NPI) to £ 18.7 million, from £ 19.6 million in the first half of FY2023.
First-half distributable income for FY2024 was £ 9.2 million, down 1.7 per cent from £ 9.3 million in the year-ago period.
An increase in vacancy-holding costs due to timing weighed on the trust&rsquo s NPI and distributable income, the manager said. However, it noted that income had stabilised over the past year, following rental from lease re-gearing and cost savings from lower debt.
Chief executive of the manager Joshua Liaw said: &ldquo Using the proceeds from fundraising and capital recycling, we reduced our borrowings by £ 38 million and lowered our gearing to 41.4 per cent.&rdquo
In the first half of FY2023, net gearing ratio for the Reit was higher at 47.5 per cent.
The Reit&rsquo s debt headroom increased to £ 57.9 million, with no further refinancing requirements until 2027, and an interest coverage ratio of three times.
In July, the Reit secured £ 215 million of sustainability-linked loans and revolving credit facilities. This was to refinance the trust&rsquo s loan facilities due between 2024 and 2026.
As at Jun 30, portfolio occupancy remained stable at 92.3 per cent, with a weighted average lease expiry of 3.8 years.
The manager of the Reit expects a brighter market outlook after the Labour Party returned to government in the UK. The Reit could benefit from one of the Labour Party&rsquo s key priorities, which is to boost growth by increasing homebuilding and infrastructure projects.
About 90 per cent of the Reit&rsquo s assets are used for public-facing Jobscentre Plus, a government-funded employment agency in the UK. This comes as the trust expands into living-sector assets with locations suitable for conversion into student housing or build-to-rent residences.
As it continues to collect all of its rent a quarter in advance, unitholders can expect stable income to continue, the manager added.
Elite UK Reit secures £ 80 million in term and revolving facilities
Funds will be used to refinance existing loans
THE manager of Elite UK Real Estate Investment Trust : MXNU +2.04% (Reit) announced on Wednesday (Jul 24) that the Reit&rsquo s wholly owned subsidiaries &ndash Elite Amphora and Elite Cask &ndash have entered into a loan agreement for a 39-month term and revolving facilities of up to £ 80 million (S$138.9 million).
Funds from the facilities will be used, among other things, to refinance the Reit&rsquo s existing borrowings. As at the date of the announcement, no funds had been drawn down under the agreement.
Under the deal, the lenders are entitled to require immediate repayment of all outstanding loans and accrued interest and other amounts, under &ldquo specified events&rdquo .
Such events include Sunway Bhd ceasing to be the Reit&rsquo s substantial unitholder, Elite UK Reit Management no longer being the manager of the trust, or Perpetual (Asia) ceasing to be the trustee.
Sunway RE Capital, which is wholly owned by Malaysian conglomerate Sunway, is one of Elite UK Reit&rsquo s three sponsors.
Elite UK Reit&rsquo s portfolio includes properties in London, Scotland and Wales.
RHB initiates coverage on Elite UK Reit with &lsquo buy&rsquo call
The research team cites the trust&rsquo s firm recovery path as reason for the recommendation, and expects Reit to further lower its gearing by FY2025
RHB has initiated coverage on Elite UK Real Estate Investment Trust (Reit) with a &ldquo buy&rdquo recommendation and a target price of £ 0.31, which implies a yield of 11 per cent.
The research team attributed the call to the Reit&rsquo s firm recovery path, after the trust addressed key issues of lease renewal, gearing and debt refinancing.
Additionally, the team also expects favourable market conditions following the return of a Labour Party government in the United Kingdom &ndash which could provide more clarity on real estate regulation in the country &ndash and increased chances of an interest rate cut.
Based on a recent ground visit, as well as discussions with the Reit&rsquo s management and tenants, the research team noted there was a &ldquo strong likelihood&rdquo of more than 90 per cent of the trust&rsquo s government leases being renewed for the longer term before expiry.
More than 99 per cent of the trust&rsquo s gross rental income came from various agencies in the UK government, with 136 of 150 assets occupied by the UK Department for Work and Pensions.
The concentration risk of government leases and the chances of lease renewals in 2028 could have been a &ldquo key concern&rdquo for investors, RHB&rsquo s research team said.
The trust&rsquo s distribution per unit is also projected to bottom out in FY2024, before turning around in the following financial year.
The planned disposal of vacant assets by early next year could lower the trust&rsquo s operational costs and result in a higher net property income margin for FY2025, the research team added.
&ldquo The Reit has also proven, so far, its ability to divest some of the vacated assets at a premium to its latest valuations,&rdquo the team said.
The trust&rsquo s five divestments of vacated assets were at a 12 per cent premium over valuations, and generated gross proceeds of £ 3.4 million (S$5.9 million).
Financing costs are also expected to stabilise from anticipated interest rate cuts, which could lead to a sustained earnings turnaround.
With &ldquo strong sponsor and shareholder support&rdquo , the trust is expected to have a net gearing of about 42 per cent, offering &ldquo sufficient headroom&rdquo and allaying concerns of potential gearing breaches in the near term.
Elite UK Reit&rsquo s portfolio is mainly found in town centres, near key transport hubs and amenities. As at the first quarter of FY2024, its portfolio of 150 assets is valued at £ 413 million with a total net lettable area of 3.8 million square feet, and a 92.3 per cent occupancy rate.
Elite UK Reit unit inks £ 135 million facilities agreement
Funds from the facilities will be used to refinance the Reit&rsquo s existing loans
ELITE UK Real Estate Investment Trust (Reit) has entered into a facilities agreement for term and revolving facilities of up to £ 135 million (S$235.3 million) over a term of 39 months.
This was done through the Reit&rsquo s wholly owned subsidiary Elite Gemstones Properties, announced its manager on Tuesday (Jul 16).
As announced during the time it secured a committed offer from the lenders in March this year, funds from the facilities will be used to refinance the Reit&rsquo s existing loans.
The manager added that no amounts under the agreement have been drawn down to date.
Under the agreement, the facilities&rsquo lenders are entitled to require immediate pre-payment of all outstanding loans and accrued interest, among others, should certain &ldquo specified events&rdquo occur.
Such events include scenarios where the manager&rsquo s shareholders, Elite Partners Holdings and Sunway RE Capital, cease to beneficially hold more than 50 per cent of the manager&rsquo s issued share capital.
Should a &ldquo specified event&rdquo like this occur, the aggregate amount of the facilities and existing outstanding borrowings of Elite UK Reit that may be affected is estimated to come in at £ 193.4 million.
The estimated sum is assuming that the facilities are fully drawn down and used to refinance and reduce existing borrowings of the Reit by an equivalent amount. It also excludes interest.
Units of Elite UK Reit : MXNU 0% were trading flat at £ 0.245 as at 9.33 am on Tuesday, after the news. The Reit&rsquo s portfolio includes properties in London, Scotland and Wales.
While it was still known as Elite Commercial Reit, it was announced on Mar 4 that the Reit received a committed offer for the facilities from a group of financial institutions.
This came as a result of new lending relationships sourced by the manager through the Reit&rsquo s sponsors, said the manager at the time.
The manager&rsquo s chief executive Joshua Liaw said the ongoing refinancing exercise would allow it to focus on reinforcing the Reit&rsquo s capital structure, while maximising unitholder returns through asset repositioning strategies.
PhillipCapital sees &lsquo valuation upside&rsquo from Elite Commercial REIT&rsquo s expanded mandate
There is valuation upside from Elite Commercial REIT&rsquo s expanded investment mandate, which now includes the living sector. Two vacant assets are on track to be redeveloped into student accommodation and a data centre, which will unlock their value by uplifting rental and valuation by some 30% to 40%.
For now, however, PhillipCapital Research analyst Liu Miaomiao has lowered her target price to 32 British pence (54.29 cents) from 34 pence previously, while staying &ldquo buy&rdquo on the REIT.
Liu&rsquo s May 6 note comes after Elite Commercial REIT reported a distribution per unit (DPU) of 0.67 pence for the 1QFY2024, 21.2% lower y-o-y due to an enlarged equity base from the preferential offering completed on Jan 18.
Distributable income fell by 3.5% y-o-y to GBP4.4 million. Revenue for the 1QFY2024 inched up by 0.8% y-o-y to GBP9.2 million with the growth in rent escalations offset by non-income generating vacant assets and vacancy holding costs. The increase in vacancy holding costs was due to timing, says the REIT manager.
In 1QFY2024, distributions were impacted by the increase in vacancy holding expenses, such as manpower and electricity due to prolonged vacancy periods, notes Liu. &ldquo There are seven vacant assets remaining, two of which will be redeveloped, and the others will either be re-let or divested.&rdquo
Dilapidation settlements would partially offset the earnings shortfall, with four more buildings expected to be received by the end of FY2024. According to Liu, net property income (NPI) is expected to be on par with FY2022 levels.
1QFY2024 NPI fell by 3.7% y-o-y to GBP8.3 million.
As at March 31, portfolio occupancy stood at 92.3%. The REIT&rsquo s weighted average lease expiry (WALE) stood at 4.0 years.
Net gearing ratio stood at 41.5%, down from 47.5% as at Dec 31, 2023. Interest coverage ratio (ICR) stood unchanged at 3.1 times.
Expanded investment mandate
On April 15, Elite Commercial REIT announced the expansion of its investment mandate into the living sector, such as student housing, senior living and even data centres.
The manager says this will let the REIT ride on the influx of international students and artificial intelligence (AI) demand respectively.
Lindsay House in Dundee, Scotland, is slated to be converted into a 40- to 200-bed student housing facility upon approval from authorities. Typical values are around GBP130,000 per bed with yields of 5.5%.
The annual income for the building would soar by 280% to some GBP1.4 million from GBP360,000 in FY2022, and the valuation will double to GBP38 million upon successful redevelopment.
With the power shortage in the UK, data centres will provide a growth engine for the booming AI demand, says Liu.
Elite Commercial REIT is actively working on securing sufficient power to meet tenants' requirements, and we expect the process to take roughly 1.5 years to complete construction.
Outlook
Liu points to the counter-cyclical nature of Elite Commercial REIT, since its largest tenant, the UK&rsquo s Department for Work and Pensions (DWP), tends to expand during economic slowdowns as more people claim unemployment benefits and seek help for career consultation.
Hence, Elite Commercial REIT is well-positioned to benefit from an economic downturn in the UK.
&ldquo Despite the possible valuation uplift through expanding its mandate, we believe the effect won&rsquo t be salient in the short term given the long legal and construction duration and relatively small scale (two assets vs 150 assets in total),&rdquo notes Liu.
As government support tends to lag during economic downturns, Liu does not expect any major expansion in footprint from DWP in the short term. She projects FY2024-2025 DPUs of 3.76 to 4.42 pence.
Elite Commercial Reit&rsquo s Q1 DPU down 21.2% to £ 0.0067
Its portfolio is 92.3 per cent occupied with rents collected in advance
ELITE Commercial Reit&rsquo s distribution per unit (DPU) for the first quarter ended March 2024 declined 21.2 per cent year on year to £ 0.0067 from £ 0.0085, based on a 90 per cent payout ratio.
In a business update on Friday (May 3), the manager said that at a 100 per cent payout ratio, DPU for Q1 FY2024 would be £ 0.0074 or 21.3 per cent down from Q1 FY2023 DPU of £ 0.0094.
Revenue for the quarter rose a marginal 0.8 per cent to £ 9.2 million (S$15.6 million), mainly due to rent escalations which took effect in April 2023.
This was however offset in part by non-income generating assets and vacancy holding costs, resulting in net property income falling 3.7 per cent to £ 8.3 million.
The amount generated during the first quarter for distribution to unitholders was down 3.5 per cent year on year at £ 4.4 million.
The DPU decline was also attributed to an enlarged equity base following the real estate investment trust&rsquo s (Reit) preferential offering which was completed on Jan 18, 2024.
Including proceeds from the £ 28 million preferential offering, the manager estimated that the Reit has a debt headroom of £ 55 million, as its net gearing stood at 41.5 per cent as at end-March 2024.
Its portfolio was 92.3 per cent occupied with rents collected in advance, with a weighted average lease expiry of four years.
Leases were on a triple-net basis &ndash with the tenant responsible for repairing the external, internal parts and the property&rsquo s structure for occupied assets &ndash for which the majority are signed directly with the UK government.
This provides credit stability and income certainty for the Reit, said the manager, adding that it has started early negotiations on tenant retention and lease expiry diversification.
Joshua Liaw, chief executive of the manager, said: &ldquo While market uncertainty persists, we have reinforced our capital structure with new credit facilities and have started putting our asset repositioning strategies into action.&rdquo
He said the manager has &ldquo identified several potential opportunities&rdquo in the Reit&rsquo s portfolio, with its expanded investment mandate to include the living sector.
He also noted a supply-demand imbalance faced by the UK student housing market and build-to-rent segments, which &ldquo presents an opportunity for (the Reit&rsquo s) assets to be repositioned to fill this gap&rdquo .
Look at Ho Bee and Fraser Property - impairment after impairment.
CIMB is most brave with its comments
CIMB is most brave with its comments
MrBear12 ( Date: 17-Apr-2024 13:06) Posted:
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This one cannot one. Seems like it has a half life of 2 years. At this rate 15 cents also can be soon reached.
CGS International likes Elite Commercial REIT' s broadened investment mandate
Lock Mun Yee and Natalie Ong of CGS International have kept their " add" call and £ 0.38 target price for Elite Commercial REIT, following its intention to broaden its investment mandate to include so-called living sector properties.
On April 15, the REIT, which holds a portfolio of commercial properties in the UK largely rented to the local government, will be widening its portfolio mix to include purpose-built student accommodation (PBSA), built-to-rent residential (BTR), senior living and social housing and other government housing.
To reflect this broader investment strategy, ECR plans to change its name to Elite UK REIT down the road at a date to be determined.
" The broader investment mandate would enable ECR to benefit from defensive cashflow backed by government tenancies, while deepening and broadening its focus into defensive sectors in the UK as a UK pure-play SREIT," state Lock and Ong in their April 15 note.
As of end-FY23, 93.2% of ECR' s rental income was derived from the Department for Work & Pensions (DWP) and 96.6% of its portfolio lease is expiring in FY2028.
" In addition, we think broadening its strategy would also likely position the REIT for growth as well as future-proof the portfolio by capitalising on segments with favourable demand-supply fundamentals, such as PBSA and BTR," the analysts add.
According to management, the UK PBSA sector is a countercyclical asset class that remained resilient even during the pandemic and is under-supplied due to a growing student population.
The student accommodation market has attracted significant interest from investors other than ECR. On April 12, private-held Mapletree Investments announced the acquisition of 8,192 operational beds across 19 cities in the UK and Germany, as well as an operating platform from Cuscaden Peak Investments for £ 1 billion ($1.7 billion).
The deal will increase the overall bed count within Mapletree&rsquo s UK portfolio to over 17,000, solidifying Mapletree&rsquo s position as one of the largest owners of student housing assets in the UK.
Meanwhile, the UK BTR segment is underbuilt, accounting for only 2% of the UK&rsquo s total private rental stock and benefiting from increased demand from renters and limited supply.
However, instead of purely buying new assets, ECR is eyeing the repositioning of some of its existing properties for a start.
The CGS analysts estimate that in the medium term, any potential valuation uplift from these enhancement opportunities could enable ECR to pare down its proforma post-preferential offer gearing of 43.7%.
Meanwhile, they' ve maintained their " add" call and dividend discount model-based £ 0.38 target price on the counter, for its stable income profile with inbuilt growth through its inflation-linked rental structure.
From Lock and Ong' s perspective, potential re-rating catalysts could come from the faster-than-expected completion of value-creation opportunities and the earlier-than-expected resumption of a higher dividend payout ratio.
On the other hand, downside risks include tenant concentration exposure to DWP and longer and higher-than-projected interest rate trend.
Elite Commercial Reit expands investment strategy to other UK real estate asset classes
ELITE Commercial Reit will expand its investment strategy to include other asset classes in the UK, particularly assets in the living sec : MXNU 0% will expand its investment strategy to include other asset classes in the UK, particularly assets in the living sector.
The move will turn Elite Reit into a UK pure-play real estate investment trust (Reit), as it will delineate a clear geographic boundary in terms of operations, its manager said on Monday (Apr 15).
The manager said the Reit will continue to focus on the social infrastructure asset sector, including its existing portfolio of Jobcentre Plus, government infrastructure and workspaces.
&ldquo Elite Reit would be able to retain certain repositioned assets in favourable locations and would not be restricted to purely commercial real estate and real estate-related assets in the UK for its portfolio,&rdquo the manager said.
The move will also allow the Reit to capitalise on emerging market trends and sectors with strong potential for attractive yields or capital appreciation. It will be able to diversify its portfolio in terms of income stream, asset classes and tenancy.
It highlighted the living sector &ndash which includes purpose-built student accommodation (PBSA) and build-to-rent residential assets &ndash as one potential investment area.
&ldquo The unique attributes and the strategic location of Elite Reit&rsquo s assets, which are highly accessible to key transportation nodes and amenities, are complementary to these asset classes,&rdquo the Reit manager said.
It plans to tap the expertise and network of one of its sponsors, Sunway RE Capital, which owns a portfolio of five PBSA assets in four UK cities &ndash Bristol, Manchester, Sheffield and Southampton &ndash spanning more than 820 beds.
The manager plans to change the Reit&rsquo s name to Elite UK Reit &ldquo in due course&rdquo to better reflect its broadened investment strategy.
Share price now way below the preferential offering price. Does not seem to have stabilised the situation. Ouch.
Elite Commercial Reit secures £ 135 million debt facilities
ELITE Commercial Real Estate Investment Trust (Reit) has obtained a committed offer for debt facilities of up to £ 135 million (S$229.7 million) from a group of financial institutions.
At a three-term, the new credit facilities will help the Reit to efficiently manage its working capital, said the manager on Monday (Mar 4).
It noted that the funds obtained will be used to refinance the Reit&rsquo s existing loan facilities, among other things.
Joshua Liaw, chief executive of the manager, noted that securing the credit facilities shows strong relationships with banking partners.
The manager said the offer came from new lending relationships that the manager sourced through the Reit&rsquo s sponsor.
Liaw said that the refinancing exercise will allow the Reit to reinforce its capital structure and maximise unitholder returns through asset repositioning strategies. This entails divestments and repurposing vacant assets to unlock latent value in its real estate portfolio.
&ldquo Early negotiations on tenant retention and lease expiry diversification are also in progress,&rdquo he added.
The manager said that post the £ 28 million preferential offering concluded on Jan 18, the Reit&rsquo s net gearing was lowered to 40.9 per cent from 2023-end 47.5 per cent.
As at Dec 31, 2023, about 66 per cent of its borrowings were hedged on fixed interest rates and the interest coverage ratio stood at 3.1 times.
Another SREIt pig
Elite REIT' s revenue grew to £ 37.6 million in FY2023, mainly due to rental escalations of 13.1% for 136 assets following inflation-linked rental uplift from 1 April 2023. This represents an increase of 1.5% from its revenue in the previous corresponding period (&ldquo FY2022&rdquo ). The amount generated for distribution to Unitholders in respect of FY2023 stood at £ 18.0 million, representing a decline of 21.9% year-on-year mainly due to rising borrowing costs and asset holding costs. As a result, Elite REIT reported DPU of 3.42 pence1 in respect of FY2023. At 90% payout ratio, Unitholders can expect to receive DPU of 1.33 pence in respect of 2H 2023, which translates to an annualised yield of 9.4%. The record date is 27 February 2024, and payment is expected to be made on 28 March 2024. Net asset value per unit was £ 0.43 as at 31 December 2023.
Will the company need to do more capital raises or is the amount raised already sufficient?
What we shld be attentive to is the next valuation exercise. Will the cap rate rise again, causing valuation to drop AGAIN ?