Article in today's FT giving a view on the London office market,
in a nutshell- the impact of COVID and companies deciding they need less
space has yet to hit the sector.
It may already be reflected (to an extent) in share prices imv, just not
in fundamentals. The sector still vulnerable to setbacks on risk off sentiment imv.
And there remains the big unknown - when will HMG call a hault to the moritorium?. |
nick, excellent summary.
I'm happy to hold giving my portfolio some exposure to the sector. |
Hi Nick, thanks for the view. Not holding atm. |
Not going bust but can't see how its get any better from here. There being reasonable landlords to tenants with reduction in service charge income and rent free periods but its all coming at a cost. Also good to see rental collection transparency and whilst june qtr not so good its mainly a retail issue so small impact. Impact of all these agreements is carrying through into trade receivables up £15m and although small beer when your recognising income for 2021 will this end up being impaired though. Net impact is dividend wasn't covered but as rent kicks in at Charlotte St should substantially close the gap. Adverse though is 24% of income is up for breaks/expires in 2021 and in current environment has to be seen as high risk - 24% of H1 breaks/expires now vacant already as an indicator.
With paltry yield needs to be below 2500 for me. |
Both John Burns & Simon Silver retired/retiring from Derwent London. They were the pioneers and drive behind the Company! Who knows how this will play out now, certainly uncertain times ahead. |
Hi Phil, what's you make of these results?. |
The property development company increased its interim dividend, despite reporting a sharp swing to a loss on a revaluation deficit, while announcing the planned departure of its co-founder Simon Silver, an executive director and co-founder of the company. His retirement is effective February 2021, but he will support Derwent as a consultant until the end of 2022.
Alliance News |
One day, the virus will subside. It could be eradicated. But even then, life will not simply return to the way it was before Covid-19. Spurred on by the coronavirus crisis, architects have been rethinking the buildings we inhabit. |
 Preview for next tuesday
Derwent London H1 results
AJ Bell investment director Russ Mould said given Derwent London’s broad spread of tenants across the media industry, professional services, retail head offices and retail and leisure sites it serves as a “good litmus test” for how commercial property landlords are navigating the Covid crisis.
The Reit, which counts the UK government, Burberry, Ticketmaster and Sony Pictures among its largest clients, revealed it had received 81% of the rent due on its £5.5bn collection of properties in Q1 and 70% of payments in Q2 where 9% more was due to come, 9% were on payment plans, 4% had been waived and 8% was outstanding.
Derwent has grown its NAV per share every year since 2008, Mould notes, and has a “stunning track record of dividend growth” but both runs could come to an end in 2020 thanks to the global pandemic.
However he added Derwent London still has a robust balance sheet, ending 2019 with £982m of net debt for a loan-to-value ratio of 16.9%. |
7th aug Deutsche 'hold' tp 3250p cut from 3780p
Is anyone going to return to London ? It's a ghost town. |
'Working from home is terrible news for landlords'
.....Real-estate providers like Derwent London — known for stylish buildings including the White Collar Factory in Shoreditch, which boasts a rooftop running track — may be better placed. |
Sold the small amount bought last week, if available lower on a bad day
will be back in. |
The govt is going to have to bring out new legislation to boost offices and thus city centre use. How about giving every employee working from home the right to claim £50 to £75 per day that their employer tells them to work from home? That would cover home usage, heating, water, electricity and broadband costs. Make employers think twice before exploiting workers and saving costs on office space. |
Phil, that 2021 view looks a little optimistic, depending on location etc.
An approx 14% fall is not crash territory, more like a mild(ish) correction.
Derwent trading on an approx 25% discount to NAV atm. |
£230billion commercial property crash: Treasury watchdog sounds the alarm as millions work from home |
Finally bought a small amount @ 2768. |
Hi Phil, finds support @ around 2785/95, I've missed multiple
trading opportunities here, with the share price bouncing from around that level. Obvs that pattern will beak at some point. |
16th july Jefferies buy tp 4010p up from 3958p |
Travelex Founder Takes Bet On London Office Market Recovery
(Bloomberg) -- Lloyd Dorfman, the founder of Travelex Ltd, has bought an office building in London in a sign of his “great faith” in the capital’s office market, according to a report in The Times. The currency exchange entrepreneur has bought Soho Place, an office block and theater near London’s Tottenham Court Road Station, for 40 million pounds ($50 million) that’s being developed by Derwent |
9th july
The Times (Tempus share tips):
BUY Derwent London. |
Hi Phil, looks reasonable(ish), medium term a lot depends how vacancy rates develop.
Atm the share price appears to find some support in the 27.90 type area.
Just the recent pattern, which can quickly change!. |
June Quarter
· To date we have received 75% of the quarter's office rents and 70% of the portfolio's overall rent
· After adjusting for rents deferred or waived (see table below), we have now received 93% of the office rents and 90% of rents due
· Rent free periods have been granted on 4% of total rents, mainly in the retail and hospitality sectors
· As part of the ongoing support for our occupiers, we have waived 25% of service charges for both the March and June quarters. The cost to the Group is estimated at c.£4m
March Quarter update
· Since we last reported on 8 April 2020, the rents agreed to be paid later within the March quarter have been received in full. Consequently, we have now received 81% of March rents (98% of rents due), with another 11% subject to agreed payment plans
· The Group has now received 86% of the March office rents (99% of office rents due), with another 11% subject to payment plans |
Afternoon EI.
There's always going to be certain businesses that require that fashionable address :-) |
It's an interesting one Phil. Would guess the main factor atm is a
recession reducing demand. Longer term, for the prime office space which Derwent
develop, there should be demand?. |
Less office space needed in the future as homeworking becomes the norm ? |
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