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QuotedData’s morning briefing 21 October 2021

Custodian REIT to reduce dividend as rent receipts fall

In QuotedData’s morning briefing 21 October 2021:

  • Custodian REIT (CREI) has bought a 28,601 sq ft industrial unit on Clifton Moor Industrial Estate, York, adjacent to York’s northern bypass which connects to both the A1(M) and M62. The unit is occupied by Menzies Distribution Limited with a weighted average unexpired term to first break or expiry of 2.8 years. The unit has a passing rent of £186,000 per annum, reflecting a net initial yield of 5.90%.
  • BMO Commercial Property (BCPT) says its end September NAV was 130p, up 4.2% from end June and contributing to a year-to-date return on NAV of 13.5%. In addition, the discount is narrowing and the monthly dividend is being hiked by 7.1% to 0.375p per share from November. Strong returns from retail warehouses, industrial and logistics properties within the portfolio offset a small decline in the value of St. Christopher’s Place. Rent collection stats continue to improve, with 94.9% of the third quarter’s rent collected to date. The problem area remains retail.
  • Secured Income Fund (SSIF) is asking its shareholders to approve the cancellation of trading in its shares on the Specialist Funds Segment.
  • Separately, Secured Income reports that its NAV at end June 2021 was 36.28p, down from 86.37p on 30 June 2020. 29.17p of that fall relates to distributions that have been made to shareholders as the company pursues its managed wind down (a plan adopted last September). Most of the rest of the fall relates to provisions made against direct loans, in particular its film financing portfolio. These  loans were hit by the pandemic as a result of cancelled film festivals and cinema screening, and changes in operating practices whereby future sales are expected to be made via longer tail earn outs instead of the customary large upfront payment.
  • NB Private Equity (NBPE) says that its second largest underlying position, Autostore has announced the successful completion of its IPO on the Oslo Børs at NOK 31 per share, implying a market cap of about NOK 103.5bn. Based on the IPO price and current foreign exchange rate, NBPE’s holding in Autostore would be valued at $130.6m, a $54.6m uplift ($1.08 net NAV per share uplift) to the 31 August 2021 vaulation of $76.0m. The Autostore valuation will be updated in the 30 September 2021 factsheet which will be released in the coming days. A minority proportion of NBPE’s holding was sold in the IPO [another great example of the conservative nature of private equity valuations – which is why private equity discounts are daft].
  • Primary Health Properties (PHP) has agreed to acquire the Clonbrusk Primary Care Centre, Athlone, Co. Westmeath, Ireland for a cost of €10.1m. The property is a modern, purpose-built primary care centre which was developed in 2013 and is effectively 100% let to the Health Service Executive (HSE), Ireland’s equivalent to the UK’s NHS. It has an unexpired lease term of 17.5 years, which is accretive to the portfolio WAULT. There are long leases at peppercorn rents in place to two GP practices and a pharmacy.

We also have results from Scottish Oriental Smaller Companies, a sale and purchase by Impact Healthcare REIT and proposed tender offers by Asia Dragon

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