Cls Share Discussion Threads

[cwa1] 03/11/2021 08:16

This morning's update:-



Fredrik Widlund, Chief Executive of CLS, commented:

"We are pleased to present this trading update ahead of today's Capital Markets Day, which is being held at our London office, and at some of our exciting developments and redevelopments in London. The day gives CLS the opportunity to showcase our asset management capabilities and the quality of our properties, highlighting the potential upside for value creation within our portfolio.

"Operationally, we are seeing improving market conditions and activity levels in all our geographies, albeit at different speeds, with Germany bouncing back strongly, France performing well and an encouraging recovery in the UK. We are confident that our ongoing asset management activity will lead to a reduction in vacancy by the year-end."

Also this re REIT status:-

We are making good progress with our evaluation of converting the Group's UK operations to a REIT to ensure that it benefits shareholders and that we would satisfy all the necessary criteria. A further update will be given before year-end.

...didn't seem too bad to me-but the market marked it down first thing, with a soggy opening. I picked up a few, on the book, with an average of about 218'ish and am wondering if I was a touch precipitate and it could be available cheaper later?

Anyone else got an opinion on it?

For the record there's a Capital Markets Day today

[playful] 19/10/2021 14:23

We have a bounce!

[nickrl] 29/9/2021 22:03

EURO/POUND rate has run back a little recently which helps on FX conversion although a clear downtrend is really needed. Divi still too low for me although could easily bump it up without any pressure on cover.

[hindsight] 29/9/2021 11:26

SERE update quite bullish for german offices

[skyship] 28/9/2021 10:30

On offer at 229p where the discount is now an historic 32.1%. So tempting for a CFD trade; however the chart looks pretty dire, so could see 220p. All rather counter-intuitive; but for the moment perhaps best just to watch:

free stock charts from uk.advfn.com


free stock charts from uk.advfn.com

[skyship] 19/9/2021 13:37

hs - agreed, LTV @ 38.1% is too high. Would prefer to see them take it down to c30%.

[hindsight] 19/9/2021 10:13

Skyship, thank you for pinning your fx colors, personally use the other fx cross myself and consider 0.87 pivot point (1.15 on your cross) so happy to hold euros here without hedging. My main concern here is 40% LTV, think 30% discount covers office price falls risk with no debt but with 40% debt its in effect means the 30% discount covers 18% price fall.

[skyship] 15/9/2021 15:35

hs:

Yes, pretty implicit in the webcast - if/when corporation tax increases (25%?), then they admitted it would be the logical thing to do. I didn't note a separation of the UK unit though.

Yes, I believe the Euro still to be overvalued in the same way the UK equity market still undervalued. Global asset managers still playing catch-up. I think we'll see 1.20 by Christmas.

[riverman77] 15/9/2021 12:24

Interesting so they could potentially spin off the UK side into separate company. The German portfolio looks far the most interesting, where there seems to be much stronger demand for good office space.

[nickrl] 15/9/2021 12:15

£/E has traded in a narrow range since its big run up in May this year so its surprising to see it drifting back so much over last month that its NAV has fallen below PCA now! Divi still too low for me although its well covered so should be secure.

Its going to be interesting to see where the office trend goes with vacancy rates creeping up it has to exert a downward pressure on rents even with top quality space and we are seeing a bit of drift back with the bigger players but not yet to value levels.

[hindsight] 15/9/2021 10:32

riverman77, when listerned to the webcast got impression they would convert the UK side to a REIT. Agree think already is the next retail, in that high grade in demand, low grade not. LTV of 40% is my main concern
skyship, fx risk is both ways, do you think euro overvalued vs £ still ?

[riverman77] 15/9/2021 10:07

Unlikely to increase their dividend and convert to a REIT as they have a different business model, which is more focused on development of assets and selling on, so capital growth makes up most of their gains (and they have been very successful at delivering this). Would consider buying but too much uncertainty over the office sector which I feel could become the next retail.

[skyship] 15/9/2021 10:01

These are looking really soggy versus all their peers. 52% of assets in Euroland presents a currency risk of course; however down at 234.5p the NAV discount is once again over 30%, the highest in the sector.

Hopefully they will wise up and convert to REIT status so that shareholders are rewarded with a better dividend. The 3.22% yield is too low.

I've decided to buy back in for a few today, using a CFD...

[its the oxman] 26/8/2021 12:31

Got to back the very long track record of them getting it right here. Never without risk but with the cost of borrowing also about as low as it gets, sensible to take advantage perhaps.

[hindsight] 25/8/2021 16:21

Oxman, like you I prefer capital growth to income. My main concern is the move to 40% gearing, being wrong wont be pretty. At least as a family office, in effect, they must feel pretty sure they are not rolling the dice. Time will tell

[its the oxman] 25/8/2021 09:38

Personally I don't see there is huge difference in all these undervalued property plays. Others have higher yield but lack cls history of strong value creation and rising share price which I far prefer. Pays your money and takes your choice. I'm also more optimistic that unlike retail, office investment sentiment has scope to show meaningful improvement though accept I could be wrong.

[hindsight] 25/8/2021 09:10

Skyship, why more negative on euro offices than uk ?, they seem to be doing ok in Germany, etc. And for me fx at this level is fine

[skyship] 24/8/2021 18:16

Hs - agree with the 240p - I'm out, and will remain so for the time-being. At 244p the discount is 27.6% - OK, but the yield a meagre 3.1%.

Also, with now over 50% in EUROland, that likely to be a headwind for sometime to come.

Also offices remain slightly out of favour.

All in all, no reason to be long. Far prefer to be in BREI & EPIC.

[hindsight] 24/8/2021 13:39

Reinvested the declared divi and few more at 244p. But still think 240p get tested this autumn

[its the oxman] 23/8/2021 12:24

Added a few 243p. Fall is overdone. Office work is back on the menu boys (and girls).

[hindsight] 16/8/2021 14:43

Listened to the webcast, cant say they seemed too excited for the next year. Which at nearly 100% office is fair enough. Dont agree with 40% + LTV being a good thing though.

[jeff h] 12/8/2021 12:50

CLS trading at ‘substantial discount’, says Berenberg

Shares in commercial property investment business CLS Holdings (CLSH) trade at a ‘substantial discount’ despite their upside potential, says Berenberg.

Analyst Kieran Lee retained his ‘buy’ recommendation and target price of 300p on the stock, which nudged up 0.2%, or 0.5p, to 255p yesterday. He said half-year results ‘highlight the resilience of the reshaped portfolio, with strength in the German portfolio offsetting weakness in the UK’.

‘The shares trade at a substantial discount to net asset value and pay a growing dividend with upside potential,’ said Lee. Factoring in ‘tenancy risk, obsolescence, leverage, and liquidity risks’, Lee said the company provides ‘a sustainable cross-cycle return on equity and long-term growth’. He is expecting the company to renew focus on ‘driving operational performance and asset management’ in the second half, which he said were ‘two of CLS’s greatest strengths’.

‘This should reduce portfolio vacancy rates, rebuild earnings, and reduce leverage,’ he added.

[its the oxman] 11/8/2021 11:51

Cls track record of delivery and value creation is excellent , and the modest yield is not a problem. Co sounds fairly optimistic about H2 and imho deserves a narrower discount than at present. Hoping the worst is behind us.

[hindsight] 11/8/2021 08:56

The low yield is fine by me as its to reinvest profits back into capital. Long term share price vs others shows this well. Expecting it to test 240p and may add if holds

[spooky] 11/8/2021 08:50

SKYSHIP - I sympathise with your comments but discount to NAV will ultimately be the driver if and when underlying markets improve.