Cls Share Discussion Threads

[hindsight] 22/11/2021 15:23

Added a few, either these too low or others like RGL too high

[essentialinvestor] 21/11/2021 15:31

I added a small amount on Friday, sold out of GPOR on the opening bounce.

Was a little surprised that markets only really took fright on Friday as
COVID data in multi European countries had been worsening for weeks.


Infections beginning in tick up in the US again - might be worth
keeping an eye on from a general equity market perspective.

[skyship] 21/11/2021 14:35

Now down nearly 19% from its triple top over the Summer. This move contrary to the rises across the whole sector!

Chart continues to look dire as the share price drifts down to a 37.4$ discount. Both the strong £ and the "office only" strategy working against this one.

But surely there has to be a bounce soon - perhaps when it gets down to the 61.8% FIB support @ c204p:


free stock charts from uk.advfn.com

[essentialinvestor] 12/11/2021 19:46

Thanks Nick.

Given COVID case rapidly increasing in Germany over the last few days
thought CLI might be lower down.

[nickrl] 12/11/2021 17:52

EI im sure thats realistic if not an underestimate but guess it depends what standards they have to achieve. They are saying they will need to spend £58m on the current estate to make it net zero by 2030 but presumably any tenant with reduced energy bills will pay more for rent.

Separately I saw an item that said German office workers are equally as reticent as British ones about returning to the office but how is this going to play out in rental tone isn't clear at all and suspect it will take another 12-18mths before any clear trend is established. So was tempted yesterday but that buy button didn't get clicked but with rent locked in for years at avg of 2.21% am struggling to see what im missing.

[essentialinvestor] 11/11/2021 13:59

Nick, you may be able to give an insight of this.

I've read a few articles recently saying about 30% of UK commercial office space
may not meet the environmental standards which will come on to effect in 2030?.

Is this valid and something that needs to be kept in mind re office REITS?.

[nickrl] 10/11/2021 20:12

There Germany vacancy rate has deteriorated from 4.5 to 10.2% over the last 9 months and FX have been impacting translation but even so divi is well covered.

Discount is looking rather appealing here along with UK part converting to a REIT. Market has a downer on it but its office quality is as good as likes of DLN which commands far higher premia over CLS.

Edit: Germany vacancy rate increased by 4% after they bought a portfolio of buildings with high voids.

[essentialinvestor] 10/11/2021 15:44

Article 16 would give an opportunity in domestic cyclicals,
not wishing for that eventuality obvs.

[skyship] 10/11/2021 15:35

EI - also scalped my last trade - watching closely.

Bought a few more SREI @ 50.3p as their upcoming Interims will make them the highest discount among their peers.

[essentialinvestor] 10/11/2021 15:16

Back in for a small amount, scalped the last lot.


Current risk - we invoke, if that's the correct term, Article 16.

SKY might know more about that one with his contacts!.

[hindsight] 10/11/2021 15:12

Maybe of interest, market clearly thinks otherwise


More value in CLS shares, says Liberum
Shares in CLS Holdings (CLI) do not reflect the value embedded in the commercial property investment company, says Liberum.
Analyst Chris Spearing retained his ‘buy’ recommendation and target price of 290p on the stock, which closed up 1.3% at 223p on Tuesday.
He said a capital market’s day last week outlined management’s strategy to become the ‘leading office space specialist’.
‘A key takeaway was the visibility of a more than 25% rental uplift in the medium term,’ said Spearing.
‘This will come through letting up vacancy, reversion and refurbishment developments.’
A decision to change the company into a real estate investment trust, which is expected before the end of the year, could also add 0.5% to 1% to the yield.
‘The shares stand at a 28% discount to EPRA net disposal value, which in our view does not reflect the embedded value and earnings upside from improving market conditions over the next year,’ said Spearing.

[hindsight] 04/11/2021 10:35

EI completely agree. Nickrl euro is a 50/50 bet for me when starts with an 8. One can hedge if a strong view on a weaker Euro and get paid some carry on the trade. Main issue here for me is Office market compounded by the 40% LTV. Would much prefer a lower LTV as at 40% LTV, a 20% office fall wipes out the discount, at 20% LTV it would require 25% fall. I do not know at which price point offices are brought for resi conversion ie what is the downside % on that ?

[essentialinvestor] 04/11/2021 09:36

CLI created huge value by regularly cancelling chunks of their share capital
over may years, before belatedly switching to dividend payments.

Arguably they should have stayed with that value creation strategy.

If you want some income, then just sell a small % of a holding.

Some investors appear to struggle with this very easy concept for some reason.


nick, that's not aimed at you btw, just a general observation.

[nickrl] 04/11/2021 09:30

Pound has strengthened a fair bit this year against Euro will impact translation of German profits I guess although less than 5% overall by my reckoning. Divi still too low and they don't seem keen to move it up.

[its the oxman] 04/11/2021 09:03

Also added 221p, trading statement seems positive and fairly confident of improvement.

[essentialinvestor] 03/11/2021 18:44

Bought a small amount, would hope the current discount to NAV and exposure
to a strong German office market offers some margin of safety.


Perhaps uncertainty over the office as a workspace going forward has weighed
on the price?, however CLI has significant exposure to government
agencies and departments. The National Crime Agency in the UK is not going to
work from home, from memory they are one of CLI's UK tenants. Luck to holders.

[skyship] 03/11/2021 15:59

Ah. Indeed; they've traded down from the 260p level - hit that 3times from May-August.

So we've had a 15% fall when almost all other propcos have been moving ahead.

Hence decided to buy back in for a few today.

[essentialinvestor] 03/11/2021 15:51

Had taken this off a watchlist and last time I looked CLI was
trading over £2.50 a share, just expressing surprise at the current level.

Is it expectations of the interest rate cycle having turned?.

Newsflow looks more than OK on a quick read through of recent announcements.

[skyship] 03/11/2021 15:32

EI - what have you just seen exactly?

CWA - done it many, many times. If the MM is still offering then surely that is what matters. A bloody cheek to try and charge 2p more if I tried to complete my purchase in the one deal.

[essentialinvestor] 03/11/2021 14:56

Crumbs just seen this, what has happened?.

[cwa1] 03/11/2021 14:53

Careful SKY, you may get a phone call from your broker about breach of market etiquette(BOME)!

I did a similar thing and got a right ticking off from my broker. They'd had received a complaint from the market maker they told me. My broker explained it "wasn't the done thing" not to show your full hand at the outset and was a BOME to do it that way. Also, I must never do it again on pain of death!

I explained that I wasn't really TOO worried about bothering market makers as I'd been doing it most of life so far...but they said it DID bother them(my broker), as they needed the MM as a counterparty and had to follow their rules whether I liked it or not.

They cancelled 3 out of my 4 trades, unfortunately. I should add the share price had gone UP significantly since my trades.

I asked what would happen if I did the same and the share price had gone down...he was strangely reticent to assure me that the MM would STILL want to cancel my trades under those circs :-(

[skyship] 03/11/2021 11:50

CWA - joined you with 10k this morning, paying 218.9p bought in 4 lots of 2.5k. Would have had to pay 221 if bought in one lot! With today's ultra-low comm rates for online transactions, not much of a penalty.

[cwa1] 03/11/2021 09:38

I'm afraid I can't help you with the first part SKY, above my pay grade sadly! However, got to hope that the yield would increase if there was a complete or partial conversion to a REIT...

Offices? Yes, agreed. A thorny issue but the update seemed upbeat on the face of it to me at least. And they seemed confident that vacancies will be reduced in the not too distant future. Over confident/rose tinteds on?

Yes, that is one heck of a hefty discount that allows for, perhaps?, the most cynical interpretation of the company's current status?

[hindsight] 03/11/2021 09:30

Problem here for me is the LTV. In the unknown outcome of offices its high. Naturally this is a two way benefit but sentiment is pricing for down. Latest information I have is developers are getting 2 days minimum a week in the office contracts. Would imagine they are one of the better able to WFH
Edit I do hold from the dark days but not adding