Hi Matt, why did you pick 82% as the assumed sale value? I don’t see what it has to do with occupancy rates.
Nice article btw - I also hold RLE.
“Portfolio occupancy dipped during the pandemic and has not recovered since. It stood at just 82% at the end of 2024 and to address this risk, I assume that the remaining portfolio is sold for 82% of its current gross value which equates to £102 million.”
You are right, there is no clear link here given vacant properties should already be held at discounted values in the accounts. However, there is a risk that the remaining portfolio does not realise its book value when sold and, while 82% is an arbitrary choice, it does capture this risk.
Hi Matt, why did you pick 82% as the assumed sale value? I don’t see what it has to do with occupancy rates.
Nice article btw - I also hold RLE.
“Portfolio occupancy dipped during the pandemic and has not recovered since. It stood at just 82% at the end of 2024 and to address this risk, I assume that the remaining portfolio is sold for 82% of its current gross value which equates to £102 million.”
You are right, there is no clear link here given vacant properties should already be held at discounted values in the accounts. However, there is a risk that the remaining portfolio does not realise its book value when sold and, while 82% is an arbitrary choice, it does capture this risk.
Good write up. Cheers for the H/T