Questor: more evidence that our switch to property is helping to maintain our income
Our portfolio is now heavily exposed to property in one way or another, as certain types of real estate offer income certainty when few other assets do, and two of our property holdings have announced updates recently.
The first is Sirius Real Estate, which owns commercial property in Germany. On Wednesday it said the collection of rent and service charges in June had been at 99.8pc of normal levels.
Sirius said: “The consistency of cash collection is reflective of the company’s breadth of tenant base, ability of its staff to engage with and manage its tenants and the decisive manner in which the company has been managing throughout the crisis, as well as the efficiency with which the German government has acted to support businesses.”
It added that a “small number” of tenants that faced financial difficulties related to Covid-19 had requested deferral of rental and service charge payments. “These are being addressed on a case-by-case basis and have had very limited impact on cash flow at this point,” Sirius said.
It had good news too about inquiries from potential new tenants. “Following a previously reported brief reduction … inquiry levels have returned to normal levels of above 1,200 per month in April, May and June 2020,” it said. “The demand for space remains good, with an increase in the demand for storage.” Sirius’s conferencing activity has also resumed “successfully”.
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Andrew Coombs, the company’s chief executive, said: “While the last few months have been a hugely challenging time for people both personally and economically, we have weathered the first phase of this crisis with relative success.”
Questor says: hold
Ticker: SRE
Share price at close: 79.8p
Update: Regional Reit
Yesterday this property fund, focused, as its name suggests, on real estate outside the capital, and said it had arranged several new leases at rents about 20pc above the estimated rental values of the properties concerned, which were predominately home to “government-designated essential service occupiers”.
The rents involved amounted to £531,364 a year, compared with Regional’s annual rental income of £64.3m in the year to December. None the less the increases are welcome and we will hold.
Questor says: hold
Ticker: RGL
Share price at close: 76p
Update: Portfolio performance
As our monthly table shows, performance has continued to be held back by capital losses incurred since the beginning of the Covid epidemic. We are just in the black overall.
Table source: sharesight.com
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