Event in Progress:
Discover the latest content that has just been published on Research Tree
The book value remained stable in Q3 23 following the significant adjustment in H1 23. End-market rents continued to perform extremely well in the UK, with another acceleration in Q3 23.
Companies: SEGRO plc
AlphaValue
After the 17% GAV adjustment in H2 22, the decline was limited to 2% in H1 23. The vacancy rate again rose slightly on a sequential basis. The growth in market rents appears to be slowing.
While the transaction market looks poor, thus questioning the relevance of prices, Segro underlined stabilising values in the UK. The underlying business is showing no real signs of stalling.
Segro registered £2bn of negative revaluations thus offsetting half of the £3.8bn positive revaluation recorded in FY 21. We expect further downward adjustments in FY 23-24.
If one looks through the current interest rate cycle and trusts that inflation will be brought under control at some point within an investable timescale, then the hope is that as the cost of capital reduces real estate values will rise again. Our worst-case scenario of a 200bps move in yields and no rental growth would see valuations fall by a third. Many of the discounts that industrial and logistics property companies are trading on are currently wider than this. Couple this with the strong o
Companies: LMP SGRO WHR ASLI EBOX BBOX SHED MLI
QuotedData Professional
Management quote: “We note that the CBRE UK Monthly Property Index has shown a 10% decline in UK industrial values during Q3”.
Yield compression stalled in H1 22 but rents were robust enough to generate leverage on both GAV and NAV. Segro is now trading at a discount to NAV.
Segro was the first to talk about a significant increase in construction costs although, at pixel time, this has yet to weigh on the operational performance.
The material key figure of the company’s FY 21 set of figures was the 42% bump in NAV attributable to positive revaluations alone. The latter was equivalent to £4bn. The top line was up 5% lfl (+£17m).
The key word of SEGRO’s press release was: “strong”. No material issue was detected in this quarter. End-market figures are still very positive.
GAV was up 8.5% lfl in H1 21 sequentially. It suggests an unprecedented level in FY 21. Deriving from the current 32% premium to NAV, Segro was granted a lower than 2.8% yield by the stockmarket. In relative terms, warehouses are now more expensive than the best locations in the heart of best metropolitan areas.
Vacancy increased in Q1 21 (+50bp vs. December 2020, to 4.4%) for “refurbishment purposes”. Segro took back some ground so that it could raise its standard. Renewals signed were 12% above previous rents: this shows an upside vs. the current rents base on top of the installed base being developed.
Yield compression continued as far as the logistics assets are concerned. The GAV was up 10% lfl in FY 20, resulting in a NAV up 16% (sixteen) from 700p to 814p. The low vacancy observed (3.9% in December 2020 vs. 4.0% in December 2019) doesn’t reflect the increasing portion of retailers facing questions about their own businesses, in the UK especially.
Vacancy, rents and reversion were safe in H1 20. Segro is still very positive as far as the short term is concerned. It is pushing its investment strategy but reducing its speculative developments. However, some first negative revaluations were clearly visible in H1 20 (lfl): cracks (but not a krach) in a long favourable inflationist cycle in the Logistics / Warehouses-beloved thematic.
The difference between the current market cap (£10.3bn) and FY 19 NNNAV (£7.4bn) was £2.8bn or a premium of 38%. This is the equivalent of six years of FY 19 accounted positive revaluations of £477m. The latter was c. half of both FY 18 and FY 17 contributions, i.e.e showed a kind of real softening.
Research Tree provides access to ongoing research coverage, media content and regulatory news on SEGRO plc. We currently have 0 research reports from 10 professional analysts.
In the most difficult market conditions in more than a decade, Foxtons after adopting new strategic priorities, delivered an impressive turnaround in performance, and regained its position as London’s leading Estate Agent. Our analysis recognises the logic which underlies current consensus, see scope for upgrades and justifies valuations materially above current values.
Companies: Foxtons Group Plc
Zeus Capital
The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no
Companies: AEIT ROOF DGI9 INPP GSF SEIT USFP HICL ORIT BSIF TRIG NESF SEQI HEIT GRP GCP FSFL 3IN AERI PINT RNEW BBGI GSEO DORE TENT GRID CORD HGEN AEET
Hardman & Co
Companies: PMG DUKE CMCL BOOM
Cavendish
Companies: Gore Street Energy Storage Fund PLC
Shore Capital
Companies: Duke Capital Limited
Canaccord Genuity
Today's announcement from JIM reflects a year which saw challenges both in underlying terms and in relation to the ongoing Section 166 process. Trading volumes have remained under pressure against a choppy economic backdrop. Voluntary requirement (VREQ) restrictions placed on “Model B” clients have led to a reduction in client numbers in this category, although numbers have remained stable since the Q3 completion of assessments. The company did benefit from rising interest rates, a significant p
Companies: Jarvis Securities plc
WHIreland
Companies: Vanquis Banking Group PLC
Gresham House Energy Storage Fund (GRID) is the largest UK fund investing in utility-scale battery energy storage systems (BESS). A recent sharp decline in gas prices, a ‘disappointing’ start to the Energy System Operator’s (ESO’s) new energy trading platform and systemic delays connecting completed projects to the national grid have raised concerns about the revenue generating capacity of the BESS sector. This has placed significant downward pressure on the share prices of GRID and others in th
Companies: Gresham House Energy Storage Fund Plc GBP
Edison
AUCTUS PUBLICATIONS ________________________________________ ADX Energy (ADX AU)C; target price of A$1.00 per share: Logging results at Welchau further derisk the discovery – The logging program has confirmed open fracture networks and vuggy porosity (matrix porosity) essential for well productivity coincident with hydrocarbon shows between 1346 m and 1702 m measured depth. This represents 356 m of gross interval across three interpreted lithological sequences. This compares with only 115 m of l
Companies: ENI XOM ADX AXL ITH BCOW EME CASP MEN PHAR ENQ CNE CORO I3E ZPHR PMG CRCL TETY GENL CNE XOM ENI TETY VLE BCOW EGY
Auctus Advisors
The new strategic vision set out by the CEO is gaining significant momentum, driven by investment in staff and in best-in-class bespoke IT and data platforms, and implies that medium-term targets are now coming into focus. Market share is being gained in all divisions, which is likely to be boosted if the sales market stabilises in 2024. We have modestly raised forecasts and our valuation to 132p/share and believe that if interest rates stabilise or ease further, there are upside risks to our fo
Companies: Real Estate Investors plc
Liberum
Companies: Secure Trust Bank Plc
ATT offers significantly discounted exposure to the technology sector…
Companies: Allianz Technology Trust PLC
Kepler | Trust Intelligence
Murray International Trust’s (MYI’s) managers are transitioning smoothly from a team of three to two, ahead of Bruce Stout’s retirement at the end of June 2024. The two remaining managers, Martin Connaghan and Samantha Fitzpatrick, have worked closely with Stout since 2001, so MYI’s shareholders can have confidence that it will be ‘business as usual’ in H224 and beyond. Regardless of the market environment, the managers strive to fulfil their objectives of generating income and capital growth hi
Companies: Murray International Trust PLC
HgCapital Trust (HgT) posted an 11.1% NAV total return in FY23 (based on final audited numbers), which allowed it to sustain strong five- and 10-year returns of 20.4% and 18.4% pa, respectively. This has been mostly driven by robust earnings momentum across its portfolio. HgT defied the tough private equity exit environment, generating £345.9m of total realisation proceeds excluding carried interest in FY23. Moreover, it has a healthy commitment coverage ratio of 73% (based on current pro forma
Companies: HGCapital Trust PLC
Share: