Axa Property Share Discussion Threads

[sleepy] 22/10/2012 15:45

Thanks Sky. The three cost €13.4m so I guess they should raise over (hopefully well over) €10m.

[skyship] 22/10/2012 13:17

Non-core assets - Yes, they've stated that they would like to sell the 4 assets in the old East Germany. One has gone (Pankower Allee or somesuch!), that leaves the three retail assets in Dresden, Kothen & Berlin. All look easily marketable.

[sleepy] 22/10/2012 11:26

Sky

Well done on finding the names of the 2 large holders!

I agree with nearly everything you say. However Note 27 at the end refers to "the stated intention of Credit Agricole to require redemption of the Agnadello loan in December 2012" (loan had been extended to 14 Dec 2012)whereas before this was regarded as contingent.

I think the Agnadello loan was down to €8.0 at end June at which time APT held €6 million in cash. This would suggest they may be trying to build up cash to €8m to be able to pay off the loan.

Has anyone any idea what they regard as non-core assets?

The August IMS referred to the relatively high TER of the company. Is this referred to in the Annual Report?

[skyship] 22/10/2012 09:07

ALAN - All already known since August - inc. that LTV figure. Was going to answer those Qs on MW site - may do so later after unloading 2sq m of logs!

The decision here is whether the known bad news fully justifies a 53% NAV discount. I believe your synopsis would suggest undue pessimism. For me the key to the value here is the fact that c65% of the portfolio is held in highly marketable, predominantly retail property in West Germany.

This stock is oversold and friendless - usually a good time to BUY. Problem for me is that I have already done so; so will just be patient and await events.

The first event IMO is likely to be an update from the IC; and later we will get news of another property sale at or near valuation.

Ultimately though it is likely to be the wishes of the Sun Life Unit Assurance Property Fund (14.95%) and the Sun Life Pensions Management Property Fund (14.95%), ie AXA as State Street Nominees (29.9%) who decide whether the Board should call time on this one. The quicker the better; and well ahead of the 2015 Continuation Vote would be my earnest wish...

[badtime] 22/10/2012 09:05

lol..alan..i have but a small pot..tilts on the understand well .... :)

[alanji] 22/10/2012 08:21

A very comprehensive, largely downbeat, report and well worth reading the managers views on the eurozone, even for those not interested in investing in APT.

55% of tenants "Grade A"
Average lease length 5.4 years (6.8 for Grade A)
The operating profit (excl capital items etc.) was £4.23m - if it were all distributed (extremely unlikely) it would give a 14% yield on the current sp
The interest rate is hedged and there are some currency hedges in place. A 5% rise or fall in the Euro would affect the nav by 2.8pps.
LTV test has increased to 60% making an early resumption of dividends more likely.

I think there is not likely to be any early increase in the share price and have decided against an investment at present - it will remain on my watch list.

Tilts - surprised to see you and Badtime are not on the largest shareholders list!!!

[skyship] 13/10/2012 18:57

BT - Yeah - sickening - but hey, he agrees there's value in them thar hills, so I'm happy to read that...

[badtime] 13/10/2012 16:21

Well done tilts as per normal

[tiltonboy] 13/10/2012 14:15

Picked up stock at 27.25p yesterday.

[skyship] 13/10/2012 12:27

The text below is from FTAdviser on 24th September. I certainly agree with Winterflood regarding the value to be unlocked here; I just believe the timescale will be somewhat quicker. Not for the first time I've bought in too early; but remain confident that I'll see a good return here on a 2-3year view - just that buyers now will do a whole lot better!!

=============================================
The board of the Axa Property investment trust has suspended its 3p annual dividend as it waits for its debts and cash balances to settle.

On the advice of the investment manager, the trust said it was suspending payouts until "both the cash and debt positions stabilise". It is reviewing its investment strategy as a result of "the ongoing challenging macro-economic climate".

According to Winterflood Securities, the fund "plans to realise non-core assets in the next 12-18 months with the aim of further paying down debt".

Simon Elliott, head of research at Winterflood Securities, said: "What is particularly disappointing is the about-face from management. In recent months the management team had declared their confidence that the dividend could be maintained at, and potentially grown from, its recent 3p per year level."

Mr Elliott added that, at a discount to net asset value of 51 per cent, there may be value in the fund, but he warned that progress would be slow.
==============================================

[skyship] 10/10/2012 08:56

Activity is down in Germany in 2012; but there is still activity at good valuations, both at the top and the bottom of the investment category scale:

[rooky4] 02/10/2012 12:37

I took the quote from the last Annual Report where the same paragraph appears in (24. Commitments) except "The Company" is used instead of "Property Trust Agnadello s.r.l2", and the definition at the start of the report was 'AXA Property Trust Limited (the "Company")'.

Looks like they specifically corrected the paragraph in the Interim Report, which is very good news.

[scburbs] 02/10/2012 08:24

Yieldsearch,

I was responding to post 153 which implied the guarantee was from APT. My extract indicates it is from the immediate parent and not APT, so you are asking the wrong person! I agree it would be unwise and unlikely for APT to provide parental security, albeit it is not unheard of. The impact of the immediate parent providing a guarantee is not significant (it might encompass any cash balances in that company, but the group still has an effective ring fence from other assets).

Banks will always take whatever security they can get their hands on. They rarely take just a mortgage, normally adding at least a pledge over the shares of the borrower.

[yieldsearch] 01/10/2012 21:07

Scrubs : why would the parent company (APT) provide a guarantee for the same amount at the mortgage provided by the subsidiary (Srl)?? i must have read that paragraph from the half yearly 10 times but it still doesnt make sense!!

Assuming the parent would have provided a guarantee, what would be the point of putting a mortgage on that small italian property if you have a guarantee across all the assets of the trust? if it is the case, the lender is in a very good position, but that is not clear to me and i would say (and hope) unlikely. And in this situation APT cant really just walk away and throw the keys.
Assuming this, they could try and agree another extension with the lender ( at a cost..) and get a new tenant in/renew the lease? That might be the best option for APT??

[scburbs] 01/10/2012 08:55

The guarantee point is important in considering whether Agnadello is ring fenced. The interim report implies no ultimate parent guarantee. I have picked up a few of these, but not sure whether to add any more.

"In addition to the main loan facility, the Group has a 50% interest in the joint venture Property Trust Agnadello S.r.l. which holds long-term bank debt of £15.04 million (€18.0 million) secured over the property and shares of the joint venture. Property Trust Agnadello s.r.l has provided a guarantee to the lender, Crédit Agricole, for £7.52 million (€9.0 million) on a several basis. The joint venture partner, European Added Value Fund Limited, has guaranteed the remaining 50% of the loan."

[skyship] 01/10/2012 08:42

A well contrived response to a tad patronising post - sorry for that. But you must admit you gave us a good laugh as you were plainly looking at the wrong building or you wouldn't have posted as you did.

Also your idea of the middle of nowhere is a bizarrely UK-centric, urban view. In reality Agnadello is superbly placed just 20miles from the Milan ring road amidst the many P-roads which link the densely populated northern towns; also just 5miles south of the new Milan-Brescia autostrada opening next year.

I live in France and was in Italy just last week; here on the Continent that logistics operation would be viewed as well placed. Forget about ports & airports - transport on the continent is by truck. Countries there are not island nations!

That said, write off the Agnadello to zilch - re-do your sums - then decide...

[rooky4] 30/9/2012 17:42

Skyship, I'm afraid you may be revealing a little too much from your choice of moniker, as you seem to have your head in the clouds. I know where the Italian warehouse is, and that's far from centres of population or from motorways, ports or airports, with a 16M loan on it. If the current tenant vacates then it is indeed a turkey shed.
When thinking others may be interested in Google Maps reference to this liability (and I realise Maps is not accurate to the metre), obviously I failed to take into account the degree of hubris required of posters on this board.

[skyship] 30/9/2012 09:55

Rooky4 - I'm afraid you may be revealing a little too much from your choice of moniker, but at least you've provided us with one of the more comical factual errors I've yet seen on these Boards.

Google the Agnadello map and you'll see the small map is dominated on its Eastern side by the 26,000 sq. m. logistics operation which is our Jt. Venture asset - just 500m SW down the SS472 from the lock-up garage you selected! Pick up the Google man, plonk him down on the road - et voila - a large entrance sign with the clue words: STOCK HOUSE.

That modern logistics site is from where the large Italian transport company Di Farco services its supply contract with Procter & Gamble.

The yield on the valuation of this property is 8.14%.

Most of the rest of our assets are located in Germany - a market where Moneyweek stated this last week:

"If you're looking for an investment property, we'd be looking at Germany, which is where all the loose money in the Eurozone is flowing."

You can look at APT from the viewpoint of a glass half empty or from the viewpoint of a glass half full - I am very much in the latter camp, in fact if I drop the Agnadello valuation (8.8% of assets), then APT is a glass 91.2% full; and mostly full of highly marketable German retail assets.

Now look at share price. The current share price discounts, in fact massively over-discounts all likely bad news. Now is the time to buy for the recovery

[rooky4] 28/9/2012 14:05

Re Yieldsearch, location in Italy:
(please see next posting for map)
Just off the SS472, in farming country, by the satellite view.
Unkindly, if the current tenant goes, then it will just be a large shed in the middle of nowhere.
If there is no recourse to APT HQ on the loans, then the management need the b*lls to walk away.
RDI have impressed recently with their willingness to do this - how tough are APT's management, because this is what will count for survival of the company as a whole?

[yieldsearch] 13/9/2012 19:47

Sky
Done - my mistake
do you know when we can expect new property valuation?

[skyship] 13/9/2012 17:50

Tilts - thnx

B/T - back in the doghouse for you son!!!

YS - that Curno link is screwing up the width - could you pls either delete or use Tinyurl - Thnx

[badtime] 13/9/2012 10:30

yes good for me re kick off time as i can then work..but pity u cant make it