Eadwig
10 Jul 2017
Re: Open offer Rhigos, "the main vehicles (ITs) being ESP and DIGS"Odd that, I think UNITE Group (UTG) are the biggest provider by far - and have been planning to change to a REIT if I remember correctly. Not surprisingly its performance has been up and down over the last year, with its low coming immediately after Theresa May's attack on foreign students at the Tory conference in October, followed by her visit to India.From Google Finance:"The Unite Group plc is a United Kingdom-based developer and operator of student accommodation. The Company provides a home for over 50,000 students in approximately 140 properties in over 28 of England and Scotland’s University towns and cities. It operates through two segments: Operations and Property. The Operations segment is responsible for the Company's approximately 140 properties, including those owned by its co-investment vehicles. The Property segment is responsible for its development and asset management strategy, and oversees its two co-investment vehicles. The Company rents its rooms both directly to students and to approximately 60 Universities across the United Kingdom. Its properties provide accommodation close to University campuses, transport and local amenities. It offers study bedroom, insurance, round the clock security, cleaning services and Wireless-Fidelity throughout its buildings. It also operates and runs approximately three funds and joint ventures."
Rhigos
10 Jul 2017
Re: Another consideration? Eadwig,Regarding possible move to FTSE 250 I think it will still be too low a market cap. and will remain for a while longer in FTSE Small Cap. FCS (excellent IT I have a large holding in) has a market cap of £745.9 million and is still in Small Cap index. Good thing to keep an eye on of course as if it does move into FTSE 250 index trackers will push up SP. Moves in and out of indexes are flagged in advance. Forget details but remember once looking into,
Rhigos
10 Jul 2017
Open offer Today I got notification from my broker for my application for 16% above minimum guaranteed (1 new for 7 old). Want to have round number of shares but do not want a lot more.There was an article in latest weekend FT on student housing investment the main vehicles (ITs) being ESP and DIGS. I hold considerably more DIGS than ESP but since 16 June they have under-performed ESP. The article was lukewarm on both. Pointed out in some cities accommodation reaching saturation, though generally dedicated student accommodation cover only about 20% of student numbers. They also thought there were risks associated with London in connection with BREXIT and London property prices. This could explain DIGS relative under-performance of late as they are focused on London. Article pointed out that both have share prices representing about a 5% premium on underlying asset values. The fact that this offer is for London property a worry. On the other hand London is most popular place for well financed foreign students to come.Thinking of reducing my holding in DIGS. After July I do not wish to further increase my holding in ESP. If they have another open offer I will probably sell some to finance offer, if offer price was such that it would be positive to do so.
Eadwig
10 Jul 2017
Another consideration? Doesn't 137m extra shares raised @109p take ESP into FTSE 250 possible entrant territory? (with the additional price momentum that (usually) entails). After this IPO there will be c. 640m shares multiplied by 1.09 = mkt cap £697mIt is right on the cusp, but bigger than some FTSE 250 companies, and if over-subscribed they may sell a few million shares extra. Share liquidity and all other requirements are met.Automatc FTSE 250 entry point is currently around 825m so there are no guarantees, but there are a few FTSE 250 companies with a market cap of less than £700m and a couple of dozen with a market cap below £825mPerhaps this is more a case of setting up for the NEXT IPO to take ESP into the automatic entry territory. then, many of the question-marks over the property market and foreign student entry *may* have been answered.Personally I've added only my guaranteed amount and no more. I've sold off ESP outside my SIPP several weeks ago and after the IPO ESP will make up around 7% of my (small) SIPP.I have a target for my SIPP of 15% gains p.a. and ESP is actually a drag on that and not even the safe backstop it once was. I have other REITS in there such as BBOX and LXI and at some point I'll make a decision to just go with one, probably, as none look likely to return the growth I need (all are held back by the expected next IPOs, all have very similar rules to ESP about price setting in IPOs and that acts as a drag when its obvious all intend to have further IPOs (including ESP).That's the trouble with REITs that are obliged to pay out 90% of profits. Not much chance to grow with what's left over.Also, many holders prefer not to add to a current holding when a discount offer may be just round the corner. All the above have similar dividend aspirations to ESP, which appear to have been slightly scaled back if you look closely. They do to me, anyway.I'll have to have a look at the history of other REITs to see if ebtry to the FTSE 250 have any kind of significant share price boost (from fund trackers and the like).
PhilipJD
07 Jul 2017
Re: Here Comes the Next IPO Looking at the prospectus for the IPO, I see Grove St Studios Ltd and Spring Roscoe Limited are in members voluntary Property holding company liquidation. This was mentioned in the last annual report.Anyone have any views as to why this is happening and whether it impacts on value of ESP?
Ripley94
07 Jul 2017
Re: Here Comes the Next IPO Jarvis .. e-mail placing @ 109p .Not much of a discount as it appears from these messages to be ex-div ??unite might be a better share in same area.
Chucko63
07 Jul 2017
Re: Here Comes the Next IPO Hi Callun, I have no problem with your numbers.However, the problem with selling all today and buying all via the Offer is that you may well not get all back. The Open offer is 1 for 7 and then you would need to get well filled in the Excess (possible, and I got everything I wanted last time).My major point is that is has been successful to sell in advance of a fairly well signalled capital raise (we saw the price fall just over 3p), and see if you can get them back. We know that they seem to issue shares at NAV plus about 2.5%, and so you would ideally look to sell at NAV plus 5 or 6% if that is where it is trading beforehand. The risk of doing this is that the price goes to NAV plus 11% and they delay or simply do not do any Offer and you have sold too cheaply. It is worth noting that similar REITs trade around NAV plus 14% though these issues tend to have been around for a number of years and have a solid and non-volatile track record.In this particular case, I sold about 30% of my holding and I have bought 6% back in the open market and hope to get the other 24% in the Open and Excess offers. Actually more, as I always buy more than I need for the long term when it is at a mere NAV plus 2.5%. I use this stock to pay my rent on a property yielding 3%, when I expect this stock to yield about 6.5% in the absence of any capital gain. In other words, I use ESP as a "virtual" house (I see it as far cheaper than owning a "real" house in the South East of England.)Other things that I look at in the same way are PHP, GCP, GABI, THRL, BBOX, AEWL, AEWU, MXF, NRR but I see ESP as having a strong risk/reward by comparison. DIGS is London-centric so I do not see a need to go there.
Callun
06 Jul 2017
Re: Here Comes the Next IPO Hi Chucko63,Not sure how you've calculated the "buy now" equivalent price, but it seems a bit on the high side. It will, of course,depend on your dealing costs and quantity purchased.I use TD Direct and am charged £12.50 for a trade. A purchase will attract a stamp duty charge of 0.5%.So, a hypothetical 5000 shares bought in the IPO will cost 5000x109p, £5450.Spending this amount on the open market, less an allowance for the 1.525p divi on 5000 shares, will require a share price of 109.73p.If my maths is wrong, please correct me.If correct, then present holders would gain by buying new shares and selling their existing holding, if, that is, the shares stay at or above their present price.Then again, if many holders do this it would drive the SP down, making an open market trade more desireable.As you say, nothing much to do at these levels.Callun
Chucko63
05 Jul 2017
Re: Here Comes the Next IPO Yes, and the 109p is without dividend, so consistent with 110.525p if bought now. The market right now is 111p mid, so nothing too much to do at these levels as I suspect you will get most if not all of what you want in the Offer.I would think that there will still be a further equity raise in a year or so, but that is long enough to buy at current levels and earn the dividends plus some capital gain in the meantime. That is, of course, if you can stomach the perceived Brexit and (slightly increasing) interest rate risk.
PhilipJD
05 Jul 2017
Re: Here Comes the Next IPO IPO price is 109p and responses need to be returned by 19th July. Prospectus at [link]
Chucko63
30 Jun 2017
Re: Here Comes the Next IPO Also taking into account Stamp Duty and (FWIW) dealing costs which are not applied in an Offer. That said, I see current NAV around 108p so if the NAV issue premium is not dissimilar to those before, an issue price of around 110-111p is quite plausible (IMO). What we have seen before is a post issue rally of 2p or so, so on the basis that you are positioned to buy a chunk at these levels, the risk that you do not get your entire demand allocated in the forthcoming Offer, now is not a bad time to buy.That is what I have started doing, though I have been selling frequently the last three weeks at the higher pre-announcement levels, creating significant headroom for purchase (in whatever form). Lower prices than 111p start to look increasingly interesting, even allowing for potential idiocy in the current Brexit negotiations. (and I am not saying that the UK has a monopoly on such idiocy). The last Trading Statement did appear to signal a further equity capital raise at some stage and I suppose it was a fair bet that it would arise sooner rather than later given that most of the leverage had been employed and so further borrowing to initiate the 2025 Plan was less likely.
Eadwig
29 Jun 2017
Re: Here Comes the Next IPO Callun, "Trading volume has collapsed over the last few days. People saving their cash for the IPO perhaps? "Yeah. Why add now when you know you'll get a shot at a discount? hence price drop also.
Callun
27 Jun 2017
Re: Here Comes the Next IPO Trading volume has collapsed over the last few days. People saving their cash for the IPO perhaps?
Eadwig
27 Jun 2017
Here Comes the Next IPO Looks like a big one - 140m shares, aiming at 3,500 more beds including a London Portfolio.They usually move pretty fast, so keep your eyes peeled for the prospectus and corporate actions announcements.
Eadwig
18 Jun 2017
Re: Sunday Politics There's certainly more hope than there was. You are correct to say that including student figures is the recognised convention internationally speaking. No idea why, its obvious to me that students aren't immigrants - no one on a visa is, by definition.So use one set of figures for home consumption and one for international consumption. Be totally clear and transparent about what you are doing and underline just how much these students pay for the privilege of attending University here, not to mention all the spin-off in high value R & D jobs associated with their presence.The fact it was in the manifesto that no majority voted for hopefully means that some way can be found. The quote you give very much underlines my fears that this is Mrs May's most vulnerable political area (or was until the disastrous decision to call the election), and she may still feel it necessary to defend the position.I completely agree this is the biggest risk for ESP. I also think its one of the greatest risks for the future of the economy also.I repeat what I have said here before though. I've been very surprised by the amount of hostility shown in York about the number of new students accommodations that have been built in the absence of enough social housing (like the two are linked in some way). And York voted 70% to Remain.So, I'm not celebrating any kind of victory just yet. Even with some definitive statement that the figures wont be capped in anyway, some damage had already been done to the next intake, and more will occur until such a statement is made - from the Prime Minister, whoever that might be in the future.
