Axa Property Share Discussion Threads

[campomar2] 14/1/2009 08:22

Nice big 100,000 order appeared on L2 and just like yesterday so far at least no sellers in sight

[campomar2] 14/1/2009 08:21

And also worth noting that most analysts actually expect sterling to cyclically recover through this year; I say a median estimate of 1.20 to 1.30 by end of the year. I think your fears are unfounded imho

[humbugg] 14/1/2009 08:13

nickcduk,
surely the value of their property portfolio would have fallen further if they had'nt hedged?

[campomar2] 14/1/2009 08:12

But when they took out the hedge the prediction was for large falls in property values so they would have known that. Sterling has fallen from 1.48 to 1.10 in 12 months, which as you say more than compensates for property falls so the portfolio should actually have gained. You view on them possibly overhedging from a currency point of view is surely just speculation; and the share price relects all eventualities at these levels anyway.

[nickcduk] 14/1/2009 08:07

They hedged the Euro/Sterling rate at around 1.28 or so going by the dates. They are taking a huge loss on the currency hedge but are being compensated by the gains in the property values. The problem they have is they have possibly overhedged their position because property values have fallen sharply since then. They will also have to provide cash to the banks to meet ongoing losses from the hedge like Hansteen were forced to do.

[campomar2] 14/1/2009 07:59

Why would it be underwater if the exchange rate has continued to move in their favour?

[nickcduk] 14/1/2009 07:44

APT have a large currency hedge which is probably under water by the best part of 20m or so. If they do what Hansteen had to do and close it out the LTV will be affected quite a lot. You can find further details here:-



That has also been a factor in the recent sharp falls and is worth bearing in mind. It is also likely to break LTV covenants at its Port Kali investment.

[campomar2] 14/1/2009 06:55

Share price already more than discounting predicted fall in property prices.

[mod father] 13/1/2009 23:46

lol, soz mate, could'nt resist the sniper opp!

[qwazi] 13/1/2009 22:51

gooner6, that NAV is as at 30 Sep 08, so relatively recent. Asset values have probably fallen a further 6-7% in Q4 in Europe. I am also in the industry :-)

As you'll see from my earlier post, I fully expect values to fall. What yield do you think is appropriate for the sort of stock they hold? Even at 10% the stock would be worth a significant premium to today's price.

[gooner6] 13/1/2009 22:24

Ignore MF, he still hasn't got over 1979.

[mod father] 13/1/2009 22:21

Lol, works in the industry, lol he makes the tea at the local estate agents, suppose that counts... MUG PUNTER TEA BOY...

[gooner6] 13/1/2009 22:10

qwazi - You quote a NAV of 113p, i can see from some links that the NAV was 113p as at 31 Mar 08.

I can guarantee that the valuations would be hit extremely hard since then.

I work in the industry, but UK based property and over the last 12 months valuations have been hit for nearly 40%

I also know that Europe has also become problematic during 2008.

AXA fund holds mainly retail property and retail is being hit very hard.

I honestly don't know enough about the AXA fund but seeing this thread caught my eye.

[bengt] 13/1/2009 21:50

I'm pleased to see a thread on this stock too. APT is much smaller than many of their peers, so not sure many income funds will be holding; it strikes me that this is a more honest play than others of their ilke (where management companies spin lies to protect their own income streams).

I'm equally bemused by the sudden drop off from around 40p to less than 20, I put it partly down to lack of liquidity due to the small cap (now very small cap) nature of the stock. This is better quality than many prop co's on offer, but is suffering from the stigma of the UK property bubble.

I recently sold CPT after the so-called offer and re-invested in APT (as I think this is better quality), only to find that this tanked even more - I assume that APT is now finding its level, surely this has to be a better bet than CPT?

[humbugg] 13/1/2009 15:45

cheers qwazi,
added another tenner today for my longterm portfolio.

[kenmitch] 13/1/2009 14:11

Thanks again qwasi. Excellent post.

Wish I had looked this one up when the price fell to 16p to buy - had to pay 20p yesterday and 23.5p today. Didn't buy in one go in case there was a catch I'd missed.

It's interesting to note that on another down day Axa Property is still rising - and others in the sector are mostly holding their own.

It may yet prove that recent lows were the bottom for this sector. Fingers crossed.

Of course if they cancel the dividend that might lead to renewed selling from income funds, but that might be a chance to average down.

[davebowler] 13/1/2009 11:27

I agree- we are being well paid for our risk here.

[qwazi] 12/1/2009 20:42

Here's a note I just posted on the CP+ thread:

£159 million property portfolio, mainly German retail, at 30 September 2008. £70 million of borrowings and £17.8 million of cash. Giving gearing of 44% or 33% if you net off the cash.

NAV 113p, share price 22p, discount to NAV - 81%. Was 40p at the beginning of Dec, then sold off hard bottoming at around 16p, I think this was due to being ejected from the FTSE-All share index and hence forced selling from trackers.

The market concern is on the debt I think. Although the LTV is only 44%, their loan covenant is at 50%. So they will probably breach. But... does it really matter?

The interest cover on the loan is 328%, so they can easily afford to step up the interest payments substantially (like IERE). What we've seen so far in the sector is that as long as you can service your debt, the lending banks are not interested in defaulting the loan.

But... let's just say, worst case, that Calyon does recall the loan and forces a fire sale of the assets. The portfolio is currently priced off a 6.5% yield - what's it worth on a fire sale? 8%? 9%? Let's call it 10%. With £10m of rent that would give a portfolio valuation of £100m, less the net debt of £52m, gives a value for the equity of £48m or 48p per share.

I see that as the worst case scenario. Assuming they do renegotiate the debt, which I'm sure they will, then one can value the portfolio on a more realistic basis. Difficult to say what "realistic" is in today's market but I would venture 8%, which would give a share price of 76p.

[kenmitch] 12/1/2009 19:34

Yes. Many thanks.

I just can't see what the catch is but surely there must be some reason - other than the markdown for all such Companies - why the shares have tumbled around 80% even while NAV has continued rising.

As you said Dave on the IERE thread, this looks a far better choice and I'm wishing I had had the time today to check out APT further instead of having to wait until after the markets closed.

I like the fact that over 50% of their top ten investments are in Germany where there has been no proerty bubble. Also debt is lower than many similar trusts and past performance better too. And - at least last time they reported - the dividend was covered by revenues. Guess that might have changed now and that they will join others in either cancelling or cutting the dividend. Not too worried if they do that as cash is king for now.

The share price fall since October has been precipitate - especially so the quick fall from 40p to 15p. Is the bounce here and in the sector the start of a proper rally at long last or just a dead cat bounce. If the latter it will at least give a chance to buy more shares in this one cheaper.

But if anyone knows of any negatives please post and please lead us in the right direction if knowing/thinking that alternative Investment Trusts in the sector are better.

[robizm] 12/1/2009 19:11

well done for setting up a thread. i only bought into these a week ago and think they are way too cheap, but time will tell

[davebowler] 12/1/2009 12:06

Trustnet info

[davebowler] 12/1/2009 12:04

European Commercial Property Investment Trust -big discount to asset value.