Ct Property Share Discussion Threads

[skyship] 11/7/2022 07:47

nexus - also thnx for your CBRE update. So at this current crazy level we're now on a 40% discount! 2nd only to CLI in the sector.

[skyship] 11/7/2022 07:44

strath - thnx for that. Yes, you're right - the 31 Mar'22 Trading Update shows 7.2% of an increased c£400m prop val'n. Stated as £29m.

[spectoacc] 11/7/2022 06:55

Good spot @strathroyal - tho let's see if they can offload it.

@nickrl - disagree with: "...All of which impacts NRI and thus the cash for dividends" - there's only really EPIC in that boat. If you flog assets and buy back shares (SLI, BCPT, hopefully BREI) the outcome is good. Only downside in CTPT's case is whether it ultimately becomes too small, in which case it needs to merge.

I'd be more concerned if they flogged it to then go chasing more Industrial, when they can buy their own shares at such a discount (with perhaps VIP a willing seller).

[strathroyal] 10/7/2022 21:39

Skyship - not that this makes a deal of difference but isn't the current valuation £29M per the last trading update?

[nexusltd] 10/7/2022 21:17

Applying the CBRE Q2 stats to CTPT’s March 2022 portfolio mix.
- Capital growth, end June NAV estimate: 132.3p + Net Revenue before quarter dividend 1.2p
- Discount on 79.2p closing 09 July offer a) Capital growth only: 40.1%, b) All: included: 40.7%,
- Yield 5.1%

[nickrl] 10/7/2022 13:48

strath good detective work as didn't know it was up for sale. So if BCPT wanted it then CTPT would surely deal with it off market not waste time and money on marketing. Thing is Mayfair is well sought after destination for Middle East folk who have plenty of [our] cash from oil revenues to splosh around so a premium is highly likely.

However, too many REITs are selling off assets and finding nothing to replace them with all of which impacts NRI and thus the cash for dividends. Despite Berkleys low yield its still generates 6% of NRI and this will pretty well leave the current 4p dividend only just covered as other than paying off the RCF the interest will still be due on the 90m loan. This sale will also impact NAV by c7p although it will be post next NAV update.

So whilst im not a buyback fan given the current discount its makes eminent sense to recycle a good portion of teh sales proceeds here if share price doesn't recover.

[strathroyal] 10/7/2022 11:27

Would appear to be the right asset to sell (low yield, out of favour office sector), and as I've said previously, BCPT have struggled to find suitable assets to spend their cash on so hopefully a good chunk of the proceeds used for a buyback. Alternatively, I wouldn't be surprised if BCPT actually bid for these.

[skyship] 10/7/2022 09:11

Strath - thnx for that. Certainly is ours - that's our trophy asset in Mayfair.

Dec'21 valuation of £27.75m - 7.2% of £385.8m.

So, we're looking for a premium of £3m over that valuation; and could well secure more as one can imagine considerable interest, especially from Middle-East investors.

£30m+ would provide good firepower for some serious buybacks.

[strathroyal] 09/7/2022 22:58

Isn't this a CTPT property?

hxxps://www.rx.london/news/rx-london-launches-14-berkeley-street-london-w1/

[alan pt] 08/7/2022 16:23

Just picked up a small top-up for 79.49 = 38% discount 5% yield

edit - closely followed by a few more at 79.15 - someone really wants to sell these - still VIP?

[essentialinvestor] 08/7/2022 15:55

None of you guys (or ladies) like GPE or CapCo ?.

[alan pt] 08/7/2022 15:33

Worth keeping a closer eye on LTV's perhaps? Across the ones that I watch it is currently looking pretty safe - in the 20's or even in the teens (UKCM, SERE if you net out the Paris sale)

That's except for EPIC which was up in the mid-high 30's but is now (accident or planning?) sitting on cash after disposals

But NRR does provide a recent lesson in how it can all go very wrong, very quickly

[spectoacc] 08/7/2022 08:24

If commercial property has been in a bubble - arguably so for Industrial, with historic yield compression - rather than this having been Covid rebound, then NAV can go down a fair way.

But barring a humungous recession - also possible - income is going to be safer than it was during Covid, and debt is simply not a problem for nearly all the small REITs (no 2008 repeat).

All the recent sales we've seen have been at decent premiums, eg EPIC this week. If property is a bubble, it has yet to finish inflating. So NAV going higher, and interest rates don't seem likely to change from being hugely negative (say 3% top, vs current 11.7% RPI). And if the sheer weight of public & private debt means 3% is the new 8%, then low yields are a permanent feature.

"It's different this time" - not different, just Japan.

128p NAV, next NAV likely over 130p. If starts falling after that, still very difficult to make a case for CTPT being expensive. No one thinks interest rates are going/can go back to previous norms. IMO they're as likely to be coming back down again within 18 months.

That leaves the recession argument, & the economy is undoubtedly in the sh*t atm thanks mainly to the squeezed consumer. But barring long-term stagflation, you've either got recession and falling interest rates, or rising interest rates and stronger economy (as employment figs suggest).

And if it's stagflation, ie continuing high inflation, there's a lot worse places to be than in real assets.

I think VIP are fools.

[skyship] 07/7/2022 16:47

A rather stupid move by VIP - sell 530k and knock down the value of your own holding.

Must be more to that than meets the eye; but darned if I can see it!

[nickrl] 07/7/2022 12:47

Specto minor amount i guess its whether its presages a longer term strategy to sell down.

Anyhow the other clown has sort of gone!!

[spectoacc] 07/7/2022 12:31

Sold yesterday it seems - what clowns. Be 50p if they dump the rest ;)

[nickrl] 07/7/2022 11:08

VIP have trimmed back 0.22%

[strathroyal] 06/7/2022 18:55

SpectoAcc - Agree BCPT buyback has been successful but those shares sit in treasury rather than being cancelled so must be a likelihood that they will be re-issued.

[spectoacc] 06/7/2022 18:41

VIP's purchase hasn't looked so clever, & surely a move by BCPT would have happened before the cost of the name-change. There's always a lot of big talk on consolidation of the small REITs (PCTN previously, RLE today), but fact is the snouts in the trough suits them all too well - why merge and lose jobs.

If I were PE I'd be taking a close look - offer say 10% under last NAV, which would likely be a 15% discount to current NAV, then either gear the cashflows or more likely sell off piecemeal. But it's not happened before, and probably won't now.

BCPT's buyback been largely successful, but preferred it when they were buying at £1 rather than the £1.15 they paid on Monday. Still more accretive than going out and punting on something (particularly with 5% stamp duty).

I'm very much in the HODL camp - deep value has become deeper value, with the divi paying us to wait. But a recession seems nailed on and times will get tougher, albeit I think that's now more than in the price.

70p in a worst-case scenario? Who knows, but value is value.

[strathroyal] 06/7/2022 18:07

Takeover talk has also disappeared as, despite the general malaise in REITs, no one has launched a bid. I notice that BCPT (stable mate, whose deputy manager is moving to CTPT as manager) has struggled to recycle a large amount of its cash holding (held for almost a year) and has c£90M in cash despite buying back over 80m shares in just over a year. Their shares have held up quite well so why not put CTPT out of its misery?

Additionally I see VIP, been increasing it's stake, has it's AGM on Friday.

[spectoacc] 06/7/2022 16:30

Next NAVs will be interesting on all of them - and outlooks, if any. One of the worst NAV performers has held up the best - AIRE.

[alan pt] 06/7/2022 16:28

Yes, the discount on EBOX has been getting silly (ASLI has held up noticeably better, interestingly)

I could blame the fact that EBOX was quite a high profile retail investor trust, but then that argument doesn't explain CTPT, which is so far off the retail radar it could be using stealth technology!

[spectoacc] 06/7/2022 16:09

Interesting comparing the recent performances of the various smaller REITs - CTPT towards the bottom, but could be worse, it could be EBOX :)

Some have held up really quite well. Makes me think it's much more sentiment than anything else.