Oxtrader
11 May 2017
Increasing Shorts on Unite Popped up onto my Twitter feed this morning that Shorts are heavily rising against Unite. [link] suppose it does have some reason for support- Immigration affecting new students [Cons are likely to win]- Property prices are slowing- Near 5 year highsJust pointing out some views on why this is increasingly becoming a target.
Maddoxx
09 Mar 2017
Another insightful RNS from Unite A disposal of a student property in London for £135m. This time the buyer is another quoted specialist student property REIT GCP Student Living (DIGS). GCP will be getting an initial yield on purchase of 4.5%. What is interesting is that the property was in Unite's books valued at 6% lower which puts it on a yield of 4.7% indicating how conservatively valued UTG's assets might be.Unite's share price is already well below the last reported NAV of 647p - if this 6% under valuation of asset values is consistent across the portfolio the NAV would be 710p.
Maddoxx
04 Mar 2017
Investors Chronicle Buy Tip Investors Chronicle have tipped Unite this week, following the results:Bull points:>> Record reservation levels>> Strong earnings visibility>> Solid rental growth>> Reit status boosting the dividendBear points:>> Uncertainty over foreign student numbers>> Strong competition for landIC View: 'Earnings growth in the next few years is likely to be significant. And while there may be doubts about the number of overseas students arriving, there is still a huge shortage of purpose-built space.' 'And yet the shares are trading at a noteworthy discount to forecast net asset value. Buy.'[link]
Maddoxx
23 Feb 2017
Solid results, div up 20% & +ve outlook Extremely solid full year results from Unite the highlights being: >> Final dividend up 26% to 12p (2015: 9p) making 18p for the year up 20%overall; >> EPRA Net Asset Value up 12% to 646p per share; >> Like-for-like rental growth 3.8% for the full year (2015: 3.8%); >> The statutory reported profit is £201.4 million (2015: £388.4 million), down on 2015 due to the large property revaluation gain taken into the 2015 figures; and >> Conservatively financed loan-to-value LTV of 34%. The outlook for Unite is positive as well: >> Current reservations at record levels for 17/18 academic year at 73%; >> No material impact seen or anticipated from Brexit; >> Supply/Demand imbalance continues with 185k more applicants than uni places in 16/17; >> Unite rental growth of 3-3.5% in 2017.Mr Market appears to have liked these results with the share price at 626p at close from 611p the previous night. Regards, Maddox
Maddoxx
10 Feb 2017
A strategically significant acquisition Unite have made a substantial £227m acquisition of Aston Student Village comprising 3067 beds over five properties on the campus of Aston University in central Birmingham. Although it doesn't say so I presume bought from Aston University. [link] this hot sector of the property market and quality of the asset the yield on purchase is 5% - but Unite intend to grow this to over 6%. I'd pick out a couple of points of significance:>> The yield of 5% is pretty good as it's as good as guaranteed as these properties are the only accommodation offered to Aston's c. 11,000 students; >> The deal reflects UTG's access to substantial funding; >> UTG's existing scale of operation and infrastructure puts it in a strategically strong position in the likely consolidation of the sector; and >> This deal will put Unite as prime candidate for similar deals by other universities looking to realize the value in their student accommodation assets.Whilst, we're foregoing the 3% development yield gain on this new approach we'll be seeing the benefit far earlier in NAV and EPRA earnings. It's also worth noting that Unite is still very conservatively financed with loan-to-value (LTV) rising to 38% from 35% previously; and with the ability to sell its developed properties into either of its two managed funds (USAF or LSAF). Unite has unique advantages to compete effectively in this attractive sector of the property market. Regards, Maddox
Maddoxx
11 Jan 2017
Growth on track As well as its fully owned property Unite run a couple of student property funds of which they own a percentage. As well as earning management fees from these funds, there is also the possibility for a performance based bonus. So great news, as announced today, rental growth is continuing to drive the property fund portfolio values up – and Unite will receive a £6m bonus!The two funds are:USAF – Unite own 23% – up 4% on an annual basisLSAV – Unite own 50% -up 5% on an annual basisThese funds are independently valued - and so provide an excellent indication of Unites' results. Regards Maddox
Maddoxx
07 Jan 2017
Norges playing both sides of the market Interesting RNS from Norges Bank Holdings - it appears that whilst they hold 3.09% of Unite Group - they have leant 0.9% to the shorters. Now Norges Bank is in fact the Central Bank of Norway - and they are managing what I believe is the largest sovereign wealth fund on the planet. All that North Sea Oil and only 5.2m Norwegians.So you wouldn't think that Norges Bank (the state bank of that moral superpower Norway) would need to nickle and dime it with those nasty hedge funds?!? The fees from stock lending must be insignificant against the decline in the capital value of their 3.09% holding. OK, so they are long-term investors and so the shorting driven share price dip may not matter on a longer term view.However, I just wonder whether Norges Bank has a different cunning plan - to increase their holding taking advantage of the now lower price and increased liquidity? As the amount of short positions declared above 0.5% totals 4.52% Norges Bank represents 20% of that on loan and this stock can be recalled. So they appear to be in an influential market position.Anyway I'm just speculating but ....Regards and a Happy New Year!Maddox
Stabilo1
18 Nov 2016
Re: Strong trading update & +ve outlook According to the fundamentals on iii they have increased shares issued year on year since 2009. But I am surprised that in general property shares are treading water. Maybe the big money now is in mining stock.
Maddoxx
14 Nov 2016
Re: Strong trading update & +ve outlook Hi Stabilo,The last share issue was in March 2014 - and Unite are effectively self-financing now. So apart from employee bonuses and share option scheme I don't envisage dilutive share issues. I'm not sure I understand your concern?Regards, Maddox
Stabilo1
14 Nov 2016
Re: Strong trading update & +ve outlook I bought around the 600p level a few months ago thinking positively however the only downside I can see is that the successive past share issues may carry on diluting share capital.
Maddoxx
08 Nov 2016
Strong trading update & +ve outlook Another positive trading update from Unite this morning covering the current 2016/17 academic year. Key points: >> Occupancy 98% >> Rental growth + 3.8% >> On track for EPS yield growth of 4.5% for 2016. >> Market - 2016/17 sees record student numbers up c.40k The growth in student numbers is further exacerbating the existing under-supply of student accommodation. Another positive point is that the growth has been strongest in Unite's target locations. With a positive outlook and development pipeline of a further 5,500 beds transparency of future growth in NAV and income is excellent and with Reit conversion will be seeing a likely 10% increase in the payout ratio. The future is of course uncertain but it's difficult to find any points of concern that would explain the recent fall in the share price. As I post the sp is 566p against last reported NAV of 620p as at 30 June. Regards, Maddox
Maddoxx
03 Nov 2016
Re: A bear raid on UTG? ....and as I've said previously - for anyone tracking UTG - the shorters are presenting a great opportunity to get into UTG at a good price. But you'll probably need to be quick.The trading pattern of Unite, and the lack of RNSs suggest that the shares are tightly held by FIs. When the shorters look to buy-back the shares to close their positions the sp might shoot back up pretty rapidly.
Maddoxx
03 Nov 2016
Re: A bear raid on UTG? A tip for Unite investors....The hedgies have to borrow stock in order to sell short. Typically, the Nominees holding investors' shares will lend the stock to shorters for a fee. If you object to your shares being used to drive down the share price of your holding - you can prevent it. Just place a Limit Order to sell your holding at a much higher price - say for UTG the 770p JPM target. This prevents the Nominee from lending your stock or makes them have to recall it from the shorter. Regards, Maddox
Maddoxx
31 Oct 2016
A bear raid on UTG? Hi Guys, I've been having a look at this dip in the share price and it appears that we have a couple of hedge funds shorting the stock just prior to the Morgan Stanley down grade report - Basso Capital Management & CQS (UK)LLP. Far be it for me to suggest that this is a coordinated bear raid. What is interesting is that the report is based on the student market contracting and this affecting Unite. However, it might also be expected to also affect ESP and DIGS - whereas their share prices have remained very resilient - DIGS is up as I post. Also, I'm far from persuaded by the report. There is a huge under supply of student accommodation. Last year 25,000 beds were added but student numbers increased by 60,000. There would have to be some cataclysmic event to bring this market into balance - so I'm satisfied that Unite is still an attractive investment in the short, medium and long-term. Unite's NAV was 620p at 30th June and Morgan Stanley sp target is 590p, other analysts targets are up to 770p so UTG are looking good value at the 550p sp as I post. What we are being presented with is a great opportunity to buy on the dip. However, as we have seen on previous Unite dips - it tends to be a spike - so you may need to be quick before the hedgies cover their positions and it charges back up again. Regards, Maddox
Maddoxx
24 Oct 2016
Assured income and growth Another RNS today - this time a well located development site acquired for 570 student beds this time in Sheffield. Again, this will be financed (£35) from internal cash flow. Unite's maturing business model will throw off increasing amounts of cash - and with conversion to a REIT that will flow to shareholders. With a development pipeline of now 5,500 student beds Unite also offers excellent transparency of future growth as well. So asset backed, very conservatively financed (loan to value ~35%)delivering a potent combination of organically generated growth and prospective increasing dividend stream Unite offers a highly attractive risk/reward profile. Regards Maddox
