Ex - re yr Q elsewhere - really no idea. Seem dramatically oversold and most likely are. However no getting away from the fact that their type of office blocks extremely unpopular. Look at the two twins in south London - Ewell/Epsom or some-such. Couldn't give them away nowadays.
Family should have kicked out the BoD long ago. Total incompetence not to have made a few sales and reduced LTV long ago.
Still on my Monitor; but prefer to buy REITs in other sectors, esp. EBOX - though their fall too has been precipitous and now on a yield of 9.2%! |
.."Not in here but reckon they have more hope than RGL and always possibility family will just take it private..."
Could be. Does the rule about having to pay the highest price paid in the last 12 months apply to family members who've bought?
That might put a damper - or at least a floor - to their plans, if so...
.."on 10 October 2022 .. Anna Seeley, Deputy Chair and Non-Executive Director of the Company, purchased 34,000 ordinary shares of 2.5 pence each in the Company ("Ordinary Shares") at a price of 145.0 pence per Ordinary Share on 5 October 2022."
And she or another family member may have bought in the subsequent rise to 160p-ish.
ATB |
i like the opening statement above
"CLI still looking good value, NAV up 10% in past 6 months to 603p"
now trading at 65% below NAV!! yielding 7.8% close to a pound now albeit on thin trading.
There finance costs are going up and that will tip them over into an uncovered divi is my forecast maybe by FY24 results on an annual run rate. Positively though they have been able to get immediate loan portfolios refinanced and about half of their 2024 refis are secured albeit at close to 6% in UK 3.5% in Euros so remainder likely to be a little higher given peak rates were post June 23. There peak refi is 2025 and they pushing for sales to reduce the amount currently but looks slow progress. Its annoying they never publish a complete loan schedule as all are in the individual SPVs.
Not in here but reckon they have more hope than RGL and always possibility family will just take it private. |
Would be good to hear confirmation that sale of Westminster Tower has now completed. |
@itstheoxman it is bizarre you have to wonder who the seller is here |
How can this be 110p. Bonkers but there you go. |
All time low today although trading was thin. Divi here is well covered at the cash level and they can easily absorb the increased loan costs where refis are required in the SPVs currently without threatening divi cover. Family hoovered up several percent this year already so perhaps they will just slowly take the company over by default! |
As I said back in June in 695 above:
"I suppose the problem is what are the true valuations of large office tower blocks. Certainly not many buyers around for those!
Still, you would have thought a 60% NAV discount would allow for most circumstances."
Since then CLI have slumped another 10%. Like RGL, a total credibility problem being an Office specialist. |
i don't see any risk of that shield. risk is very well managed at CLS, with dozens of SPVs and non recourse debt.
they seem to have a long term approach here, stemming from the support of the large shareholder no doubt. |
I do hope that the main shareholder removes risk of the board panicking. Board's panicking when the share price is like this is a major consideration. Shareholder's are renowned for panicking which creates opportunity for other shareholders - boards panicking can be hell for long shareholders. |
Specto - good call, i said the same and RGL is down approx 30% since your post.
there's some positives with CLS that i like. the main shareholder is clearly thinking the share price undervalues the assets. in the midst of all this, they secured a very significant 30 year index linked german government lease. €38m purchase price plus €20m capex, but will hopefully lead to a significant uplift.
£180m assets are held for sale in the balance sheet. roughly £50m UK, £10m france, £120m germany. already £39m under offer or under contract on top of the £49m achieved above book in the first half. |
nickrl, maybe every return to the office company statement prompts them to buy another chunk
Where would you put a bid price is they decided to take private ? |
and another 2m to the family which means they've now breached the 55% threshold yet the share price continues to drift downwards |
Not quite a cut and paste but another 2m picked up by the family today. Seems surprising that even with these chunky buys the share price continues to drift down. |
Family in the mkt again for 2m top up adding another 1% to take them to 54%. If they carry this on they will own the whole company soon!! |
Ha no, I'd flip those two %'s. RGL's LTV is heading towards difficulty IMO.
REITs are a tough call atm - ie staying patient & largely staying out, vs superficially attractive valuations. IMO rates are going nowhere (eg above 5% for whole of next year) & that's got to cause the slowdown, & won't help REITs. Then the double whammy of continually expensive debt, falling valuations based on recession/rates/risk-free, & recession itself causing CVA/voids/empty rates/long rent-frees.
So hit from both sides, whereas so far it's mainly just been from the rates side (& few actually having to refinance yet).
But I need to sit on my hands sometimes - it's a struggle to say CLI's expensive until the above happens. |
@shieldbug/specto some pretty savage downgrade on the UK portfolio with valuers taking axe to properties close to lease expiry with this comment "Biggest valuation drops on largest assets as leases near expiry" sounds like vacancy rate going up further. Have spent c50m on two high spec offices which are supposed to be in demand according to other propcos but remain unlet currently. They've done well shifting assets so far but with LTV climbing must desire more disposals to get LTV down. The one thing in favour is that it covers the divi at the cash level although the margin is eroding and with finance costs only going one way can't see divi going any higher for sometime. Not sure they warrant the 50%+ discount to NAV compared to RGLs 30%. |
CLI gets a lot of comment usually - until results day? Is everyone on holiday?
@shieldbug - the problem would seem to be that valuation falls = LTV rising, so disposals become a must. Everyone's making them/looking to make them, but frankly I'm surprised there's still so many buyers. |
"Our weighted average cost of debt increased to 3.32% (31 December 2022 2.69%) principally as a result of an increase in the UK base rate impacting UK floating rate debt and refinancings completed during the year at a higher all-in cost. Only one loan for £24.7 million remains to be refinanced in 2023." |
"We will use the disposal proceeds to reduce the Group's loan to value and continue investing to improve the quality of the portfolio."
Loan-to-value at 45.1% |
Results 8 days away. |
Tender offer might enrich some shareholders but does nothing to improve the company. |
Returning to the subject of buybacks and following Anna Seeley's latest purchase, I roughly calculate that she sold 5.2M shares in the tender offer and raised £13.1M. Her share purchases since then have totalled 8.91M and cost £12M, and her stake in CLS is up the best part of 2% (held via CVI). I think that's two of us in favour of another tender!! |
In any case it is good to see that they have sold Westminster Tower. I have been keeping an eye on it for a while and it looks to have had a number of empty floors. Albert Embankment has rapidly transitioned from commercial to residential. |
@shieldbug they will get refinancing but at considerably increased rates as they have some of the lowest debt in the sector particularly for the European assets. So free cash is going to be eroded but fortunately they have one of the better dividend coverage levels so can absorb it for several quarters. |
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