Well so far so good, The one, and only pub, has been sold today.[all the staff go as well at no cost].Profit of over 50% in just 2 and a bit years. Well done.!!!!!! Some of Comlands property has been on the books for 15 years or longer at cost price. £1.35 m profit from the pub =29p per share. |
Sold into today's spike for a quick buck. Having bought on a T10 and today being T5 it was just too tempting. Good luck tora. |
tora - I see you started the NTA board - what do you reckon of recent events here? (please reply on NTA not here) |
Wiganer, your small buy on fri has led to a lot of paper work. see todays RNS, from the Market maker.At 530p you should do very well ,good luck!! |
Still easier to sell online than it is to buy, as has been the case for several days. Now what does that suggest? |
Check out Northacre Property Development. NTA. FY results out today. Great prospects. |
The investment property databank [IPD] at the end of 2005, was showing an all property yield of 6%. This has come down in the last 8 months, to, could i say around 5.7%.Comland has some fab property, that should sell well under 5%,others a bit over.All in all a 5.7% yield might be spot on, in line with the market at this time. £10.00+ here we come. |
From the Daily Telegraph sat 19th Aug 06: In small caps, COMLAND COMMERCIAL shares soared 150p to £5.62 after the property group said it had received a possible bid approach."The group is a property trader,and therefore carries its properties at the lower of costs and nett realisable value.Any offer would have to reflect the underlying value of the group*s property assets".it said.Traders speculated it could attract a bid of between 700p-750p. Any bid at that level is, in my view far to low.At £7.00 a share it would be worth £32m + the debt of 52m =£84m pounds.This is a yield well over 7%,and is way above what is on offer on the open market. |
 Comland is a property trader, and therefore carries its properties at the lower of cost and nett realisable value.To you and i this means property bought many years ago, is in the books at that price.Now a bidder has shown up,looking to get hold of the company.In the next few days, other buyers may appear for a look in.The share price has gone up on the bid news, but in my view not to a level that any buyer would have to pay in a takeover..After the rise comland has a stockmarket value of 25m pounds. To this debt of 52m pounds has to be added = 77m pounds.Rents are 6.2m pounds giving a yield of 8.2% to the new buyer. This can not be correct in my view ,They would 5,000 buyers at that yield!!!.The going rate for commercial property is 4%- 6%. A yield a little over 5% might be nearer the mark.A big yield of 6.2% would add over £5.00 to todays share price !!.AT 5.2% yield you are looking to add on around £7.50.A very large tax bill would be due at some stage, however if the bidder converted to a REIT, this would fall from 15-20m pounds to just 2m pounds.The property is all in good areas in the south east , close to the M40, M4,M25.They have 11 sites in planning adding yet more value. |
Well the market makers ,have not got a clue, as how to value this company.Any buys and sells will only show up at the end of the day.To right, a bid would have to way over share price at start of today.Try £10.00-£16.00 a share!!!.Looks like the door has been opened, the world and his dog can now have a good sniff around. Should see at least six groups that might want it, and a smart buyer may get in quick with a knockout bid. If you can now buy at £6.50 per share, seems to me, money for old rope. |
Check QXL - Bid imminent |
Ditto from me. Well done tora. Couldn't resist a nibble on the news so bought a few at 530p. The spread had put me off initially, but it's looking a decent buy so far. |
torabora, can I be the first to congratulate you after reading today that COM has received a possible takeover offer our of the blue, I do hope this will be as profitable for you as you've hoped. |
A few good points,but even on the your very low valuation, nav will come in way over £8.00 per share.At a 6% yield, acc to you, the going rate at the start of the year, nav would hit around £10.00 per share.[Has fallen hard since and not gone up.] Have a look at Mercury park,100,000 sq ft of new office space, at around £25.00 a ft.A 5% yield on that gives a £50m value alone.[enough to pay back all the debt in one hit!!] They have sold an office in High Wycombe on a high yield,it had a short lease left on it, with no development scheme in place. The shops they have are in very good towns Marlow, High Wycombe, and so on.They will not suffer in a downturn,having no large exposure to any one big company.11 schemes are in planning, that will add value. No way, in my view, would a buyer get hold of Comland on a yield of much over 5%.Look at what they have ,it is not rubbish.Just get in the car and take a drive!!! At year 2000 ie six years ago, the shares were 50p.Showing an 8 fold rise to date, yet you can still buy at a massive discount to nav.Why when you can get one pound of property for 30p or less, in England, would you buy other prorerty shares at under a 5% discount to nav?ie 95 pence to buy a pound of property. They have been very smart to date, growing the company fast paying very little tax. The way to go now would be a buyout by the big boys, or come off aim, get a up to date valuation, and convert to a REIT.Any of the above would bring a big profit to all shareholders. Can you please tell me any other listed companies who hold all assets as stock i have not found them. |
UKNEONBOY - post #3.
The Treasury seems to have decided that AIM Property Companies can't become REITs. Whilst they may well recant, at present that's a given.
They've also put very strict limits on the number of shares allowed in a single holder, and in this respect COM loses, with over 50% in directors' hands.
In fact, I don't think I would want to be in this club: whatever the unlocked value, control is too tight for my liking. |
I'm not convinced it is reasonable to make a blanket claim that commercial property yields are in the 4-6% bracket now. If you register at propex.co.uk for example, you can view details of all sorts of commercial property in the SE of England, many with yields over 7%. The lower yields usually apply to larger buildings in prime locations, whereas the smaller developments in fringe towns which COM goes in for usually have rather higher yields. Note that their St Johns Court building in High Wycombe was sold on a 7.47% yield.
Also I might suggest you look at the IPD website - their annual index survey of UK property returns has been going 20+ years and they reckon at end-2005, the "all commercial property" yield was 6% and that the outlook for 2006 was for this to rise, reflecting higher interest rates. Again, the 6% average is made up of lower yields on large prime properties and higher yields on smaller properties outside prime locations.
The last set of figures didn't give an entirely clear picture, though they did say that "other operating income" of £6.3m was primarily rental income, but this could easily represent a capital value under £100m gross - for example, on a 7.1% average yield, the capital value would be £89.15m. They stated net debt at 31.3.06 as £51m, so I think it may be fairer to state NAV at about £38m. That still makes the shares cheap on asset grounds but not by the amount suggested above.
COM isn't the only quoted property company tightly controlled by its directors and this accounts in part for the general lack of interest in the shares, the wide spread between bid and offer prices, and the general lack of a liquid market. Nor is it the only such company to deliberately obscure NAV by classing most property as Current Assets in the balance sheet - and this can go on for donkeys years, so that the real NAV per share is never revealed. SO while I think COM is probably quite cheap, it could carry on being so for a long time. |
I understand your thought process, but I'm not necessarily convinced the value gap is as wide as you suggest. I do think it's decent value now, but am being greedy and hoping to get in cheaper.
Btw, I know you like property value plays- do you hold ART? |
Wiganer,yields on commercial property are now in the range of 4-6%. 10 years ago,10% was the norm.They only need to bring in 7m pounds at 5%.In effect,if you have £140m of property, with a yield of 5% in todays market,that is the cash amount a buyer would to pay to get hold of it.Comland has debt that has to come off of that,[of £54m or so.] so £140m -£54m = around £86m.Todays value is £18m with the shares at 412 pence each mid price. As above tax has to be sorted. Do you understand now? |
I am unclear how you arrive at 350% upside. If their properties are really undervalued to anything like that degree then how come they are only bringing in £7m a year in rental income? |
Well,the spread is large, but if you do the sums at £4.50 to buy, huge profit is still in the offing.That gives a 350% upside.[in what could be less than four months time ie Jan 1st.]When and if, the revaluation is done it will be to late to buy in, and some here may be pig sick!!!Myself, with all the sites posted up on the net, bidders must be looking, at, an, instant, clean, acquisition, [that shows growth over the up and comming years.]Looking back at the share price over last few months,around 12,000 shares have been sold, putting the stock down a pound. That is the way stock markets work, however we all know the commercial property market has gone through the roof, over last 5 years.In turn when buys start, £2.00 a day jumps may be the norm. |
The killer here, is the current massive bid/offer spread.
Having said that, I'm guessing it will turn itself into a REIT next year - then (and only then) do a full property portfolio revaluation
UKNEONBOY
:-( |
Yes,This share seems to offer about £16.00 of property for £4.00 a share.If we look at "The Future" [in the accounts]"We have seen the value of our portfolio increase signiticantly in the year." Fact is this does not show up in the accounts. Reason is that they hold property as stock, not at todays value but at the price paid ,often many years ago.I have to say,the web page for the company is great it tells you all the property they own and run.All in good areas around M25, M40, M4,NW of London.One could drive round them all in a day or two, to see what you are buying into.The yield they are getting is 10%[,twice the going rate,] which in effect doubles the value of the company on the open market. ie true value of stock if sold now might be 130m pounds not the 65m odd in the accounts. Yet more value will show up as and when they get planning on 11 yes 11 sites.A very large lump of tax would be due,but REITS could save the day here.2% of 130m pounds is a very nice gift from MR Brown[.A hell of a lot less than 30%cap gains.] Web page is www.comland .co.uk |
Results out - any views? |
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