Unfortunately they geared up at just the wrong time. If you read past statements they had intended significant disposables and then the interest tate cycle rapidly turned.
Are we now saying the market wants a 6% yield on Grade A prine office in excellent locations..? - possible I suppose.
The last few years teaches that 'certainties' may be anything but.
Interesting times, etc. |
What were the terms of the refis? |
@sigmundfreud they have been able to refi without aggressive margins a fair amount of debt which suggests lenders don't share the same pessimistic view as the market. |
you might not like the look of this very long term chart.
i have a lot of reits but not this one, i wouldn't want to buy the underlying properties. LTV is problematic even if you trust the current property valuations. if true values of properties are lower, this may not be able to re-finance without large disposals in a hurry.
the price might just stabilise at where it is at, same as where it was at pre the 2007-8 financial crisis.
but the chart looks like it could go to around 50p, or possibly half the current price to around 34p.
staying clear regardless of the divvy
if you close in to today's prices, the chart doesn't look any rosier, relatively recent death cross which in this case might actually mean it. not trying to short, only want to protect advfn posters. take care
free stock charts from uk.advfn.com |
It’s brutal |
rimau EPRA EPS = 10.3p. You do the maths - now under 7x.
As I said a few posts ago - discount irrelevant; it is the yield which is more important. Now at 11%! |
What is the pe ratio Sky, there is little point building a buy case on discount to NAV for any property stock. Earnings is the key metric. |
Whether it's cheap, and the discount really is as big as claimed, entirely depends on whether you believe the NAV is real. It's one thing for Knight Frank or whoever to give valuations but if they can't sell at anything like those valuations, the valuations are wrong. Clearly some holder is selling with determination and maybe they know more than us? Time will tell - eventually! The danger is that it makes lenders increasingly nervous and perhaps results in covenant breaches? |
@sky shrieks buy but just keeps going down down deeper and down.....
a 6 in front will irresistible though but thats maybe too much of a stretch as surely the family will take it or one of the PE's |
Nothings going to change until they actually do something. Saying they are going to sell the student digs and refinance in december and not completing isn't going to boost confidence in the management. Have to hope that long term they will come good, but I thought these were cheap at 90. Proof that whatever's cheap can still lose value. |
Seems about right. Jun'24 NAV @ 227.4p versus share price of now down @ 72.6p - 68% Discount!!! Almost 11% yield. |
You are right but the discount to NAV is in part justified. Just read the thread above to catch up. |
The June 24 figures show
Assets 2021 m
Liabs - 1184m
_____
Leaving 837 million
And if Advfn is right the mcap is £292 million
Am I right? |
Thank you doctor |
All time low. |
looks like another ATL! |
Liberum appear quite keen in their sector forecast out today, based on CLS's ability to borrow in Euros which gives them a cost of capital advantage to support earnings. They are negative on offices, think yields of 6% the new normal for London |
Too late. Taken a few in the 74's. Crazy... |
"There's some index-linking on what's let"
About half is index linked but on rent contract renewals inflation is often put on at that point so it's not as bad as it looks.
Vacancy is a problem not least because they pay business rates even when not let but you need to dig into this a bit. Part of the high vacancy is down to refurbs that are about to go back on the market or be sold. Being positive if they do let more it has a big impact on free cash flow.
I'm not saying its not without problems as it's trading where it is but it's not all bad either and quite attractive too in parts. |
SLIGHTLY tempted to have a punt on a few on the basis that it's "in the price"...somebody stop me... |
Noted re £40m being half year, thanks.
As for the debt - the cost of it will rise, and the LTV is way, way too high already.
There's some index-linking on what's let, but in what direction is the vacancy rate heading?
Only question with CLI is what's in the price IMO. |
Well the flip side of this is that you could argue they make £80m on inflation adjusting rents on a market cap of £300m and they'll have no problem managing their debt. |
But in 5 years your £1bn gilt is still paying 50m. The rent on your offices will have gone up by RPI, and hopefully there would be some appreciation in the underlying assets too.
Even if the NAV has dropped I doubt the rental income will (obv assuming vacancies remain the same).
Having said that, competing the sales of the student buildings and other assets is probably the trigger we need. I'll wait till that happens before adding more. |
Cost of debt has been increasing with every refi although anything Euro denominated may benefit but most of this years requirements are in GBp. Spring Mews is also an income producing asset so whilst we will get the benefit of lower debt it wont be neutral overall. The vacancy rate is also a negative on property operating costs so it all points to me to divi cover being squeezed further but thats in all in the price. |
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