FY Update: further reversion, improving outlook

Urban Logistics REIT has continued to successfully execute a differentiated active asset management approach to drive value from single-let assets in the last-mile logistics space, where the segment dynamics remain supportive. Occupancy was 94% with line of sight on improvement. There were six lease events yielding +£1.3m annualised rental income and +23% lfl uplift. We take some time to revisit the core investment thesis: high quality, active asset management, positive outlook/dynamics. We leav

Further lease events drive rent reversion

Urban Logistics REIT has secured a further £0.5m rental income through 7 lease events, equating to a 31% lfl increase on passing rent. There are a further 3 lease events at an advanced stage. We make no change to our forecasts. Demand continues to outstrip supply, underpinning the outlook for rental growth. A highly selective approach presents a number of value creation opportunities through lease events. We think that the current 28% discount to EPRA NAV, alongside a 6%+ dividend yield, is attr

Urban Logistics REIT – A re-rating candidate

If an inflexion point in the rates cycle has been reached, as seems to be the case, Urban Logistics REIT (SHED) is a compelling proposition. Valuations have stabilised – as evidenced by a 0.2% uplift in the value of its portfolio in the six months to September 2023 – while the company has substantial reversion baked into its portfolio. SHED’s manager has an enviable track record of creating value through asset management initiatives, and says that it will continue to be a focus for the company

Urban Logistics REIT – A re-rating candidate

If an inflexion point in the rates cycle has been reached, as seems to be the case, Urban Logistics REIT (SHED) appears to be an attractive proposition. Valuations look to have stabilised – as evidenced by a 0.2% uplift in the value of its portfolio in the six months to September 2023 – while the company says that it has rental reversion baked into its portfolio. SHED’s manager has a track record of creating value through asset management initiatives, and says that it will continue to be a focu

Interims in line as rent reversion continues

Net rental growth was sustained during H1 (+12% yoy) and lease events continued. Higher net interest weighed on earnings yoy, but this was well flagged and debt is 97% fixed/hedged providing insulation going forward. Valuation NIY was unchanged leaving EPRA NAV at 161.7p (FY23 162.4p). We exercise caution around letting up a small number of vacancies which results in 4% reduction to FY24e EPRA NAV, with current year earnings unchanged. We see long-term value creation from the active approach. Th

Q1 Update: active asset management drives rents

Q1 has seen further positive lease events driving an additional £1m+ rental income; a product of focus on high touch active asset management. The manager continues to optimise capital allocation, selling down assets at premia to recent valuations and reinvesting where there is a clear value accretion opportunity through active management. The majority of assets let to logistics provider Tuffnells have now been reassigned on the same terms. ULR has also secured £57m fixed rate debt from Aviva, an

Finals: earnings in line, wider yields impact NAV

EPRA earnings are in line with continued rental growth with a record year for lease events. The balance sheet has been impacted by wider NIYs, although outperforming the sector. The board is taking a cautious approach preferring to recycle capital rather than increase gearing. We adopt higher NIYs into our model reducing our NAV forecasts by 12-15%. ULR offers a real return (14% nominal total return) in an inflationary environment with an encouraging outlook for the asset class. We set a 175p 12

Urban Logistics REIT – Fundamentals strong as market stabilises

The industrial and logistics sector suffered its largest fall in value on record in the second half of 2022, even eclipsing that of the global financial crisis, as investment yields moved out rapidly to keep pace with interest rates. The re-rating of Urban Logistics REIT’s (SHED’s) share price was at an even greater velocity, putting it on a wide discount. However, evidence that values have bottomed out is building, with MSCI reporting uplifts in March for the first time in months. Whilst SHED h

Urban Logistics REIT – ‘Fundamentals strong’ as values stabilise

The industrial and logistics sector suffered its largest fall in value on record in the second half of 2022, even eclipsing that of the global financial crisis, as investment yields moved out rapidly to keep pace with interest rates. The re-rating of Urban Logistics REIT’s (SHED’s) share price was at an even greater velocity, putting it on a wide discount. However, evidence that values may have bottomed out appears to be building, with MSCI reporting uplifts in March for the first time in months

Active asset management delivers >£2m rental uplift

Urban Logistics REIT (“ULR”) has announced 19 letting events across >500k sqft space which has delivered >£2m incremental rental income. Lfl rental income on new lettings was +24%; further demonstrating scope for rent reversion delivered through active asset management (and selection). We leave forecasts unchanged, with FY23 finals expected in late June (22/6). We reiterate our BUY recommendation and 190p 12m Target Price, set with reference to our EPRA NAV forecast, noting a 25% discount which

Hybridan Small Cap Feast - 23 Jan 23

23 January 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment object

QuotedData’s Real Estate Monthly Roundup – January 2023

Performance - 2022 ended with another difficult month for property companies as the sector continues to get to grips with the impact of higher interest rates. There were several funds that performed well during December, however, with secondary shopping centre landlord Capital & Regional top of the pile. For a second month on the trot Home REIT saw its share price tank after it came under attack from a short seller in November. Valuation moves - It was a mixed bag for valuations, with six-month

QuotedData’s Real Estate Monthly Roundup – January 2023

Performance - 2022 ended with another difficult month for property companies as the sector continues to get to grips with the impact of higher interest rates. There were several funds that performed well during December, however, with secondary shopping centre landlord Capital & Regional top of the pile. For a second month on the trot Home REIT saw its share price tank after it came under attack from a short seller in November. Valuation moves - It was a mixed bag for valuations, with six-month

Industrial property market - What the logistics is going on?

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

Urban Logistics REIT - Long-term dynamics remain strong

Recently, Urban Logistics REIT (SHED) has fallen to a wide discount rating, as the rising cost of debt and concerns over a protracted recession have hit sentiment towards the logistics property sector. However, the long-term trends that have characterised growth in the sector remain and are even more acute in the ‘last mile’ sub-sector that SHED operates. Supply of logistics space is at record lows, while demand is robust, with take-up for the first half of the year at record highs. The strength

Morning Note – 22 April 2024

Benefits of scale set to materialise

Frenkel Topping - Resilient with strong growth potential

FY 2023 was a challenging year for Frenkel with higher interest rates encouraging clients to place money into lower margin money market funds. Despite this, sales grew +32% (supported by recurring revenue +9% and +51% in non-recurring), EBIT margins remained strong at 22% and adj. EPS grew +17% (taking into account the higher number of shares). FY 2024 has seen a solid start to transactional business and there is a strong pipeline of new FUM opportunities both of which support further growth. Wi

S&U - PBT ahead, encouraging volume trends

S&U reported FY24 PBT of £33.6m, down from £41.4m in FY23 on higher funding and regulatory costs and higher impairments in Advantage in H2. PBT was 2% ahead of our forecast as stronger revenues – up 12% to £115.4m – and better costs offset higher-than-expected impairments. Net receivables grew to a record at both Advantage and Aspen and management noted particular strength in Q4 and a good trading environment in the current year. Having absorbed a significant rise in funding cost as well as addi

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

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

Foresight Solar Fund - Termination of coverage

Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our web

LIBERUM: PayPoint: On track for £100m of EBITDA in FY 26

Regional REIT - Performing as expected ahead of refinancing

In a challenging market, Regional REIT’s (RGL’s) FY23 operational and financial performance was robust, in line with expectations and previous guidance. Investor focus remains on the company’s loan to value (LTV) reduction and bond refinancing plans, explored in detail in our previous note and RGL will provide an update on this in due course.

LIBERUM: Speedy Hire: Weakness in FY 24 but recovery in FY 25

Hybridan Small Cap Feast - 22 April 2024

22nd April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

The Hardman & Co Monthly: April 2024

Feature article: Steady as she goes, but could be better: A review of investment company liquidity since 2016 Liquidity is the lifeblood of equity markets. The measurement of liquid asset availability to a market or company is a way of gauging a market’s health. This article builds on our previous work, which analysed the liquidity data for non-financial trading companies, by applying the same analytical techniques to the investment companies (IC) space. We analyse liquidity for ICs as a whol

Foxtons Group (FOXT LN) - 1Q24 IMS shows real momentum

Foxtons Group plc first quarter revenue rose 9% to £35.7m (1Q23: £32.9m) with growth delivered across all business segments. Trading is in line with management's expectations.

H&T Group (HAT): Core franchise build, short-term retail noise

In our 15 March 2023 initiation, 'Pawnbroking royalty, with strong, profitable growth', and subsequent notes, we have highlighted the strong market for pawnbroking and why H&T, as the market leader, is uniquely placed to take advantage of these opportunities. These results reconfirmed both, with the pledge book up 28% and net pawnbroking revenue up 36%. Like many in the retail space, H&T faced the challenge of customers focusing on lower-value, lower-margin items in the key run-up to Christmas 2

Hybridan Research: Sector Review: Artificial intelligence in UK cybersecurity: the human uplift 17/04/2024

Artificial intelligence (AI) is a double-edged sword in cybersecurity. Whilst new AI models, architectures, and innovations are emerging to protect the security posture of organisations, attackers are also benefiting from deepfakes, sophisticated phishing, and automation of malicious codes. To ensure the impact of AI on cybersecurity to be a net-positive, we need to pit good AI against bad AI. Point solutions enhanced with machine learning: Global cybersecurity has been built with point soluti

Morning Note – 29 February 2024