Balanced Commercial Prop... Share Discussion Threads

[spectoacc] 02/10/2023 11:39

Interesting Sunday Times piece on West End office outlook. Could argue it's in the price, but you'd have to make that same argument on a lot of the REITs. ie par is not the starting point for valuations.

[spectoacc] 14/9/2023 15:19

Thanks @nickrl, good point re divi. Usually raised to cover errors elsewhere! Really should be preserving cash with office outlook so uncertain.

Do like BCPT, but agree it's currently too opaque.

More needs to be made of the fees - on all these REITs. Small in the scheme of fake-y NAV, huge when seen in context of rental income. Heads they win, tails you lose.

[nickrl] 14/9/2023 10:54

@specto they have lifted the divi by 10% as well so if thats the new run rate FY now c7.4%. Based on NRI of 60m and current costs/interest it wont be covered (c95%) but they mention lots of positive asset mgt stuff but like many wont tell us what the current contracted RI is. Yes i know it changes but a refresh at NAV updates/results is a key metric in a propco surely for investors in this asset class or maybe not as its all about NAV to too many.

Its at a potentially good value but lack of the two key metrics means it will stay on the sidelines with me. So given state of discount you would have though BoDs would do all they can to ensure transparency to encourage buyers. Suspect they are hoping someone will rock up and take out St Chris at a premia.

[spectoacc] 14/9/2023 08:24

Lack of disclosure of new debt terms being discussed elsewhere, but interesting to skim through the accounts this morning:

Total income - c.£30m (ie the rent roll), for the 6 month period.

Revaluation loss £10m, but that's non-cash & NAV is largely an irrelevance IMO.

Expenses of running the IT - for 6 months - c.£7m, consisting of £3m of management fee, £3.8m other.

I'd like to focus on the management fee - we're losing 10% of rent to it. How much management is needed, honestly? Re-gears, rent chasing, what else? Why is that not two people on £50k pa?

(Of course, it probably is that - much of the rest flowing through as profit to BMO).


Finance costs net of interest income was £4.4m. Debt cost was £5.4m. I see that doubling when the new facility kicks in in a little over a year.

Not small numbers unfortunatley, compared to rental income of £30m. 10% stripped out in fees win or lose, and now debt likely to take an extra £5m pa off it from 2025. Is going to need a very favourable rental market to offset that.

[vacendak] 10/9/2023 12:52

14th biggest riser of the week.
True, just sort of making the top 15, but hey, this is a small win. :)

[hindsight] 02/8/2023 18:29

Builder contact had a quote 2 years ago to move a pole at £12k. Thought was too high, just had it re quoted at £28k

[hindsight] 02/8/2023 18:24

Read ok to me. One thing for sure, short term life lot easier with divi from here than it would be making a profit on the sold BTL

[nickrl] 02/8/2023 17:57

Q2 NAV out today slight decline of 1.3%. Qtr end vacancy rate up 0.9% to 7.2% but have asset mgt initiatives in play in Q3 which should reduce it 5.2% showing interest still out there. No indication of what current contracted rent is but they have 54m of cash in the bank so hope they have that on a decent deposit rate. Surprised they didn't pay off the 50m Barclay loan on which the cap expired on 31/7 so now exposed to SONIA and likely to be up 0.25% tomorrow so over 7%.

[wtacraig1] 05/7/2023 14:00

Nicely dodged answer to my question

[vacendak] 05/7/2023 10:52

@wtacraig1

Are you attempting to take on "the internet"?
I support you, but you will surely die on that hill. :)

[nickrl] 23/6/2023 12:44

@sky they did have 50m to refi in Jul23 but they rolled that one year although the SWAP on it expires end Jul so it will then be costing 6.8%. Seeing as they've 55m cash one wonders why they didn't terminate it and use the RCF. Anyhow as you say the big risk is the 260m but they have 18mths still but where will be in 12mths on rates? Higher for longer means at least 5% although im not convinced will be as high as that but assuming its still 5% that means that 260m will now be costing an additional 8m pa so no way the divi can be maintained at current levels. Of course one would expect them to go down so short term get an expanded RCF and wait see how rates evolve but then risk is Labour is in power and the risk premium goes up.

I would sell St Chris to clear the 260m loan and have rolled it into CTPT but that options looks dead now.

[hindsight] 23/6/2023 11:14

Frazboy, doubt I can buy tomorrow :-)
But seriously I normally scale in tranches (not skillful enough to exactly buy the bottoms or sell the tops, why not sitting on a beach yet), wont be moaning if lower in a weeks time

[killing_time] 23/6/2023 10:59

There's no rate meeting next month, its August.

[vacendak] 23/6/2023 10:49

Assuming the BoE rises the rate again next month, as they will most likely stupidly do so, there could indeed be another hit coming for BCPT.
I think I shall carry on buildng up on cheap NBPE (the ex-divi is soon) then splurge on BCPT next month.

Let's time the market! :)

I will surely be wrong, as usual, but there is fun in trying.

[frazboy] 23/6/2023 10:20

Hindsight - would join you as long term value looks certain but why buy it today when they'll be a percent or so cheaper tomorrow - it's all about the entry point.

[hindsight] 23/6/2023 09:28

Rolled some CSH proceeds into here this am, got near mid via book

[skyship] 22/6/2023 13:18

Strewth - at 69.5p the discount now cavernous at 41.4%.

Obvious fear regarding debt refinancing by Dec'24; however LTV not too high.

Fully committed elsewhere (API, EBOX, SERE & SREI) so won't be adding to my REIT exposure; but if you like London, then this now at a very interesting level!

[vacendak] 22/6/2023 12:17

@Specto
To be fair, they do say prominently that they are paid for the note; but the logic of the upbeat tone is not too dubious.
I mean compared to the paid research on UTL, which we both now follow for fun. :)

The extra 0.5% by the BoE today is surely not helping BCPT either.

[spectoacc] 22/6/2023 12:08

Chart looks ominous doesn't it.

I deliberately don't read paid-for research - Kepler, Edison - is bound to influence me on the bullish side.

Difficult to know how much recession risk is priced in to BCPT down here, or how bad recession will be, or whether St Chris's will counter falls elsewhere. Big thing for all the REITs for me is what happens when the CVAs start coming through, empty rates kick in etc. Not much sign of that yet.

[vacendak] 22/6/2023 11:47

Even though the share price is cratering again, the latest Kepler review is relatively optimistic.



Same link as from the RNS.

[nickrl] 04/5/2023 09:43

Void rate up a tad 0.4% to 6.3% not much but all eats into divi coverage which is still positive. However, no mention about the SWAP (50M RCF) expiring in July which im forecasting will be enough to wipe out coverage based on current NRI although will be Q3 before it shows up.

Not in here currently want a bit more yield to cover for potential downside.

[spectoacc] 04/5/2023 07:05

"Portfolio valuation increase of 0.1% over the quarter, driven by value improvements from the Company's industrial and retail warehousing assets"

[nickrl] 03/5/2023 23:44

@aim99 doubt it barely covered now and the swap on the RCF expires in Jul so finance charges will be +1.5m.