Subject: Re: Unite Group (UTG), UK, falling knife.
Hello EVBigMacMeal!

Thanks for the kind words. I went back and read the post you wrote before. I must have missed it earlier in the year even though I was sure that I had read that whole thread.

I appreciate you taking a moment to confirm that I am not simply puffing up the quality of this particular stock, this company really is 'pretty decent', at least by the standards of the UK market. In bubbly global markets it's rare to suddenly have one of those situations that's a hybrid of quality/monopoly-like, GARPy (8% growth in recent years), yieldy (7%+), predictable cashflow-y, low debt, tax bonus-y, all at once, fairly free of scandal, mismanagement or white elephant projects, while also being tariff-proof, and set to benefit greatly from Trump's chaos and malice rather than being harmed by it.

Going back to your posts & comments: Price/bed vs private BTL is a very interesting idea, I hadn't looked at it that way before.

Reflecting for a moment on BTL: besides the issue of tax on rental income, there's also the issue of tax on capital gains on property, which I expect is quite painful with BTL when you can't ISA/SIPP around it. And nowadays, the need to run a limited company if you want to do BTL with any kind of tax efficiency, as well as the property stamp duty, the purchase/sale costs in time and money, the time/stress of accurate tax reporting each year, and the overall running, monitoring and maintenance of the place and the eternal search for good tenants. You can't gear up a regular BTL at 3-4% rates very easily (I think ordinary BTL fixed rate mortgages are about 50-100 basis points higher than what most REITs have access to), and you certainly can't buy UK BTL properties at a 50% discount (to NRV). You can't scale in or out of them depending on any other opportunities that come up, or any need for spare cash. I genuinely wonder why people bother with BTL at all? It seems like much more suffering, for much less money.

> I suppose the point is that the loans they secured during the low covid rates will be refinanced at higher rates.

Perhaps, but it strikes me as odd that institutional investors would all notice that on a random morning in October. Also, that issue affects every REIT (and UTG.L is one of the least affected - compare with e.g. SUPR.L recently, or many others). If they are all affected, why would a 30% gap emerge between this stock and the rest of the herd, when they usually move together?

I'm very sorry to hear you picked it up before the drop. As it happens I was nearly in the same situation as yourself. I had been planning to buy UGT around 700-730p in September, but I didn't quite get around to it. Mostly because there has been a lot of other choices lately (until the recent rally of 10-20% in most REITs). And of course, there was that fabulous buying opportunity in Greggs, an epicurean's delight for merely 1500p per share not so long ago. How could I resist it? It's been a struggle lately to choose between one extra unit of stock, or a soggy paper cornucopia stuffed with lukewarm sausage rolls.

TRS