Real Estate Opportunities Share Discussion Threads

[lbo] 17/2/2011 12:04

What NAMA doesn't tell us is how much of a loss has the taxpayer made on the Montevetro building (for the sake of illustration, let's suppose Treasury vehicle REO had a loan of €150m secured by this property, NAMA paid the bank €90m for the loan, NAMA advanced another €5m for the completion of the building and the reported sale price is €99.9m). NAMA clearly made a profit by reference to what it paid for the loan and the additional advances but the taxpayer in the above illustration has made a loss.

[lbo] 17/2/2011 11:56

Do you think!

It was valued at €200m in 2007. Suspect it was highly leveraged by both Quinlan and REO at the peak!!!!



The most significant investment transaction concluded in recent weeks was the acquisition by Quinlan Asset Management of a 50% interest on a forward funding basis in Treasury Holdings Montevetro site in Barrow Street, Dublin 4 for c. €200 million.

[flyingswan] 17/2/2011 11:28

Great News about Google:

Commenting, REO Chairman, Ray Horney said:

"We are very pleased to be able to announce Google's purchase of Montevetro, Dublin's tallest commercial office building. REO's stated strategy is to develop high quality, commercial real estate in well located areas.

"The transaction is one of the largest sales of commercial property in Ireland in several years and the company believes it has achieved a very good price in the current market environment. Google is an iconic name globally and its decision to buy Montevetro is good news for Ireland and we wish them every success in their new home."

[lbo] 17/2/2011 09:22

REO get nothing! (and Nama have not helped themselves in other parts of their Dublin office portfolio values) DYOR



'Based on the sale price achieved, all NAMA's outlay - acquisition price and further investment - has been recovered,' said NAMA chairman Frank Daly

[tiltonboy] 17/2/2011 08:35

All depends on what price they had this asset in the books at.

The sale will reduce debt, but will it gnaw it's way at the deficit of assets?

[joe_public] 17/2/2011 08:32

no-one doubts its a long hard struggle for REO
but this news shows there are movements happening behind the scenes

[flyingswan] 16/2/2011 09:46

UK commercial property maintains positive growth
Tuesday 15th February 2011

Commercial property maintained positive growth last month, according to the latest CB Richard Ellis UK Monthly Index.

It produced a total return of 0.7% and capital growth of 0.2% in January 2011.

This comes after a stronger than anticipated finish to 2010, with annual returns of 16.1% and capital growth of 8.9%, the highest since 2006. Central London continued to outperform in January, with City offices seeing stronger results than the West End.

January UK Monthly Index snapshot:

* Industrial return rebounded in January and was the top-performing sector, with capital growth of 0.3% and total returns of 0.8%. This was helped by a strong income return;
* All retail sub-sectors recorded positive capital growth in January, albeit at a slower rate than in December. Retail warehouses outperformed with capital growth of 0.3%, while shopping centres and shops saw a marginal 0.1% increase this month;
* Rest of UK offices saw a further correction in values after a poor 4th quarter of 2010, and were the only market sub-sector to record negative total returns over the month at -0.1%;
* Overall offices saw positive capital growth of 0.2%, thanks to another strong month for Central London;
* All Property rental values fell marginally over the month, down by 0.1%...

[flyingswan] 15/2/2011 17:52

Great to see you here knowing.

I know how much you like commercial property companies at the moment.

I agree we should see positive movement when this £5.5 billion project gets underway at BPS.

[knowing] 15/2/2011 14:37

Great news regarding the BPS plan. Took the RSI too high, too quickly so a healthy pull back. Should see some consolidation and a further rise

[flyingswan] 15/2/2011 14:30

Real estate investment trust British Land saw a solid increase in underlying pre-tax profit and net asset value (NAV) per share in its third quarter. Underlying profit before tax in the three months to 31 December 2010 was up 10% from a year earlier at GBP64m. Broker Panmure Gordon had forecast a figure of GBP65.7m. The group's portfolio at the end of the year was valued at GBP9.3bn, up 2.3% over the quarter and 13.1% higher than a year earlier.

[jp5000] 14/2/2011 13:45

Lets hope so

[flyingswan] 14/2/2011 12:11

British Land's results tomorrow:

Q3 2010/11 Results will be announced at 0700 GMT on Tuesday 15th February 2011
Copies of the press release will be available on the website from 0700 GMT. This will be followed by a conference call, hosted by Chris Grigg and Graham Roberts, which will commence at 0930 GMT.

If Good it may lift REO too IMHO.

[tiltonboy] 12/2/2011 08:52

The deadline is May 2011 as far as the raising of equity funds/payment of the Oriental Loan Notes/Equitisation of the CULS and ZDP's is concerned, and I believe there is a distinct possibility that they will not raise the finance at all, or not on the terms the board hope for. I am not foolish enough to believe it is fait accompli. The calling in of the bank debt later in the year will likely be a formality unless a deal is done.

My main hope is that more than one entity desires the development, and at least gives REO some leverage. On that basis, I believe the focus will be on securing Battersea and not necessarily on the finances(or lack of them) of the owner.

It will certainly be an interesting few months, and a testing time for the Treasury boys. Can they pull a "rabbit" out of the hat?

One thing we agree on is that without a highly successful conclusion to Battersea, all classes of REO will have little or no value.

[craftyspeculator] 11/2/2011 23:27

I'm with you LBO.

REO remains listed, but the senior bank debt really is the only (negotiating)equity - everything else is subordinated, including the CULS and ZDP's. All negotiations to date with the banks are best endeavours, wooly and non binding (see last update on the Balance Sheet restructuring)

The primary debt is bank held...NAMA/Lloyds. Folks forget that £975mn of Balance Sheet bank debt is classified as current liabilities, and the deficit on shareholders funds was £755mn as at 31 August last year, and that was before Ireland got its IMF bail out and commercial property markets took another great big thumping!

The first property magnate with dosh to go to NAMA and give the Irish Govt. 50p in the £ up front will get Battersea lock stock and barrel. Anyone who thinks otherwise is an optimistic fool. Surely folk can work out why the CULS/ZDP's are trading at 10p/20p?

I reckon a US or Middle Eastern PE firm will step in just before the 31 Aug 2011 deadline for "lights out" at REO. Battersea will be developed, but not by anyone exposed to REO equity or quazi equity.

[lbo] 11/2/2011 21:35

Yes they will! Most investors will also look closely at the vendor when negotiating on a deal. REO is a forced vendor of Battersea and prospective Battersea investors will see that when they value REO and realise how desperate they are to do a deal to pay down REO debt. Never mind the fact Battersea will need billions just to be developed. Not a strong negotiating position for REO yet some seem to think on here that Battersea will be partly sold for enough Money to reduce the negative NAV of £1.70p and give REO an equity stake in Battersea NewCo! Just can't see it! Just think if you were a prospective investor and not an REO shareholder how would you deal with REO after seeing it's current negative NAV?

[tiltonboy] 11/2/2011 15:03

LBO,

A new investor in Battersea will not be valuing the equity in REO at all; it is totally immaterial.

[lbo] 11/2/2011 14:35

Considering REO has a current negative NAV of £1.70 per share and Battersea even with the change in planning may have gone up slightly in value then I suspect all the equity valuations above are wildy optimistic! I also suspect any prospective investor/investors in Battersea would be valuing the current equity of REO at least at zero but DYOR! Battersea may have a future but sadly REO does not IMHO.

[flyingswan] 11/2/2011 09:18

RMM Chart is looking Good.

The Share price is now above some of the moving averages.

Parabolic SAR is in an up trend.

Volumes of Trades, above average.

RSI and MACD giving BUY Signals. IMHO:

[the big fella] 10/2/2011 16:33

A strong hold for me that is. If I didn't hold I would buy more! I agree with your post 874. Clearly not without risk, but I sit adjacent to our property team. They have had a tremendous year and clearly there is demand out there for the right projects. Whether that demand stretches to Battersea who knows, but if a little bit more testosterone returns to the sector I can see interest.
At these levels it's a bit like sticking money on a 4/1 shot. If you think they represent fair odds then by the CULS / ZDP.

[jambo172] 10/2/2011 16:32

Tilton.

A million CULS - punchy call.
Hope it works out for you.

[tiltonboy] 10/2/2011 16:20

Jambo,

I've wondered how best to short the Ords, but trying to hedge over a million CULS would not be easy.

[jambo172] 10/2/2011 16:16

Wonder if Treasury Holdings would lend me some ordinary shares so I could short them.
Probably not !!

[tiltonboy] 10/2/2011 16:15

Jambo,

There has got to be a distinct possibility that they will not secure the funding, and that is the gamble. I am rather hoping that the iconic nature of the site, the sheer size of it, and the lack of top quality regeneration in London in general, will lead to a lot of serious interest. How they value the scheme is an entirely different matter, but if they can get two or three players intent on winning, then we might be in for a nice surprise. I am not suggesting punters buy the CULS or ZDP's, rather if they want an exposure to Battersea then these are a far better bet than the Ords.

TBF,

If your equity valuation of £600m+ is correct, surely a strong hold is a bit strange given the price would be 48p+!!!

[jambo172] 10/2/2011 16:14

Hope you are right, Big Fella.
If so, CULS / ZDPs are worth 48p (+400%)
Ordinary shares worth 3.9p (-10%)
If CULS / ZDPs are a strong hold, could you recommend me a BUY share - must have +500% at least upside.
LOL !!