Tritax Big Box REIT (BBOX) shares rose nearly 5% to 151p yesterday afternoon after the government approved its data centre development at Manor Farm near Heathrow. Planning consent had originally been expected in the second half of last year but the confirmation means the £4.1bn logistics fund should remain on track with its updated timeline of completion between October 2027 and March 2028.
Social Housing REIT (SOHO) has been boosted by news that Inclusion Housing, its largest lessee providing 30% of annual rental income, has become the first lease-based housing provider to receive a compliant governance and viability rating from the Regulator of Social Housing. The £279m, 7.9%-yielding real estate investment trust switched to Atrato from Triple Point early last year. Yesterday, in annual results from TR Property (TRY), fund manager Marcus Phayre-Mudge highlighted SOHO, a 1% holding, as a “classic turnaround story”. The shares stand on a 25% discount.
James Carthew, head of investment company research at QuotedData, said: “I feel like we used to write a lot about the specialist supported housing sector, much of it not good. However, in recent years Social Housing REIT and its tenants have been quietly rebuilding their reputation, capped today by Inclusion’s G2V2 grading from the regulator. SOHO’s discount is a long way off the nadir of March 2023, but still too wide. That means the shares offer an attractive 8% yield, I am a happy holder.”
Custodian Property Income (CREI), the £401m real estate investment trust focused on smaller assets in the regions outside London, achieved a 10% total investment return in the year to 31 March, final results show. Shareholders received a 12.7% total return as the shares recovered from their lows in April last year when markets fell in response to US tariffs. Dividends were held at 6p per share, covered 105% by earnings putting CREI on a 6.9% yield with its shares standing on a 15% discount to net asset value. Nine rent reviews during the year produced an average 6% uplift, 7% above estimated rental value (ERV). The company expanded with the acquisition for £63.8m of three privately owned portfolios.
QuotedData’s James Carthew said: “Double-digit NAV and share price returns from Custodian Property Income REIT are encouraging, and we applaud the company’s scheme of folding in private property portfolios as a way of growing. A flat dividend and modest 3.3% EPS growth are less exciting, but the uplift in the ERV should underpin future income growth.”
Sequoia Economic Infrastructure Income (SEQI), the £1.2bn debt fund, is considering expanding its geographical range beyond the UK, Western Europe, North America, Australia, and New Zealand to include Japan and South Korea, where its manager can find robust companies having opened an office in Hong Kong. Shareholders will be formally consulted if the board decides to proceed. Approaching its twelfth year, the company reported an 8.4% investment return for the year to 31 March largely driven by income and buying back its shares on a discount, currently 13% below net asset value. The 8%-yielder held dividends at 6.875p per share, covered by cash generation. Non-performing loans fell from 1% to an all-time low of 0.3% of assets but Active Care Group, a 7.1% holding being repositioned away from NHS contracts in a strategic review, saw the value of its subordinated debt fall to £35.8m from an investment of £52.3m, although senior debs rose to £62m from an investment of £50.6m
James Carthew said: “Sequoia Economic Infrastructure Income has delivered another solid set of results. The chair is keen to point out that there are big differences between the private credit that SEQI provides and the areas that are hitting the headlines. Loans backed by tangible, in-demand/hard to replace assets ought to be inherently much more stable. This is a message that we have also tried to convey in respect of GCP Infrastructure.”
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