First Property Share Discussion Threads

[liarspoker] 12/11/2009 11:57

That's funny Des. Share and share alike eh. :O

Keep holding onto NAR. I've been shopping it around so hopefully something may happen there sooner than people think.

[deswalker] 12/11/2009 11:37

Hi Liars,

You're not going to believe it but I was the 10k buy in NAR a day or two back. I know I dismissed it out of hand in an earlier discussion but finally got round to doing a proper analysis and just had to pick up a few. It is a dilemma for the main man just how he liquidates his holding in the most tax efficient manner (both CGT and IHT) and IMO this includes a possible move to AIM to avoid IHT on a transfer of his shares to his next-of-kin.

There's loads of uncertainty about timeframe (could be a decade or more) but IMO not very much about the eventual outcome which has got to be a sale just above NAV.

I reckon the main guy would sell tomorrow if he could do so without incurring any CGT for himself now or IHT for his estate when he dies. He must be thinking of mitigating IHT hence a move to AIM would seem like a no-brainer to me.

It's hard to imagine a sale while he's still alive as then he's stuck with the cash with no easy way of avoiding IHT. Not one to bet the house on but I decided to tuck 10k away for the long term and see what happens. I'd hold into any delisting too but don't see that on the horizon, more likely a move to AIM.

In the meantime it ought to wash its face through divis, buybacks and capital repayments every now and then (not too frequently as to alert the FSA that they are divis by proxy).

Re FPO, it's about the divis really. I've been puzzling how to compare this (my only property play) which generates cash, pays divis but stands at a small premium to NTAV with all the other PropCos at big discounts to NTAV but doing all they can to pay interest on their debts. All I can say is that I hate debt even more than paying a premium to NTAV hence my reason to be here.

Rgds,

Des

[investinggarden] 12/11/2009 11:32

Picking AIM's property performers

[liarspoker] 12/11/2009 10:53

I know - very quiet thread which is a good sign imo.

I was led here by Des Walker so I picked up a few. Should lead to a nice return in the next year or two or three. :O)

[mathisvale] 08/11/2009 13:01

Jeez, there has been no interest here since late Aug. This is one co. that should provide steady growth in capital and income. Perhaps the next results on Nov 30 will stimulate some interest

[dorset64] 26/8/2009 14:25

Just gone x divi but not sure why else.

[ydderf] 26/8/2009 14:24

why is this so weak recently?

[flyingswan] 15/7/2009 11:13

UK set to beat the US in commercial property recovery Tuesday 14th Jul 2009

Whilst across the pond the distressed commercial property market continues to cast a troubling shadow over the US economy, our own commercial property worries seem to be abating.

In fact, analysts have now stated that UK is in the best position for recovery, compared to most of Europe and the States.

Recent figures from the Investment Property Databank have shown that although commercial property values have plummeted by 44% since the peak of the market in June 2007, prices decreased by just 1.6% in May 2009, making the smallest drop in the last year.

John Richards, the chief executive of major property company Hammerson, has also confirmed that the decline of rental rates is easing and that values will soon stabilise.

However, the situation remains grim in the US, where the severe shortage of credit is pushing up the rate of property defaults. The number of commercial properties in default, foreclosure or bankruptcy is now valued at over $108 billion – making it almost double the amount at the start of the year...

[flyingswan] 08/7/2009 13:07

REAL ESTATEJULY 8, 2009.London Office Deals Pick Up
Union Investment Buys Building; Foreigners Are Active
By WILLIAM BOSTON | SPECIAL TO THE WSJ

In another sign that the London commercial-property market may have turned the corner, Germany's Union Investment Real Estate AG agreed to purchase a prime office building in the City financial district for £141.5 million ($230.5 million).

The eight-story office building -- 10 Gresham St., located near St. Paul's Cathedral and the Bank of England -- was developed by Standard Life Investments, the investment arm of British insurer Standard Life PLC. With 260,000 square feet of leasable space, it was completed in 2003. Its tenants include Lloyds Banking Group, private-equity investor J.C. Flowers & Co. and property consultant Jones Lang LaSalle. The glass office building is located near St. Paul's Cathedral and the Bank of England.

."After the sharp correction in prices, London offers good opportunities for investors with equity who target core property assets," said Karl-Joseph Hermanns-Engel, a board member of Union Investment. Standard Life declined to comment.

The acquisition, one of several deals in the past few weeks, is bolstering the view that London's commercial-property markets have stabilized and prices have likely hit bottom. The volume of investment in commercial property in the West End, City and Docklands areas of London more than doubled in the second quarter to £1.4 billion from £679 million in the first quarter, according to property consultant Cushman & Wakefield. This marks the first time in two years that investment in Central London commercial property rose....

[dorset64] 06/7/2009 14:03

well done FS, some good articles there, especially the piece about a possible return to the UK. what better time to buy property in the UK than when everyone else is selling and no others can get their hands on cash. Only those with cash in hand will benefit this time around, and FPO fits the bill nicely.

[flyingswan] 06/7/2009 09:26

I think this article may explain the reason for the boost of Confidence in IPI and FPO and the commercial Property Market in General. IMHO

Saudi fund eyes £700m UK real estate deal
Posted by Stacy-Marie Ishmael on Jul 06 04:52.

An investment manager part-owned by the Saudi royal family is planning to invest a chunk of its assets in UK and US commercial property, according to Prince Faisal bin Salman bin Abdulaziz, its chairman.For Jadwa Investment, commercial real estate was, with natural resources, the most appealing investment opportunity, Prince Faisal told the FT in an interview. The fund is targeting a £700m ($1.1bn) commercial property transaction in the UK in collaboration with European property investor CIT. Property specialists said only one transaction of that scale was under way: a portfolio being sold by insurance group Aviva, for which CIT is bidding.

[flyingswan] 02/7/2009 15:41

LONDON -- Industry experts say the United Kingdom's commercial-property market, which is key to its economic growth, is starting to recover.

But that recovery is nuanced: While prime real-estate values are stabilizing, property companies are facing declining rents, difficulties obtaining financing and the prospect of growing unemployment, which means most companies will keep struggling next year.

The global recession hit commercial real-estate companies hard, with capital values falling 43.6% from their peak in June 2007 to the end of May, according to research firm Investment Property Databank.

But IPD said that decline has started to slow, with capital values falling ...

[flyingswan] 16/6/2009 10:32

Interview: UK properties ripe for plucking
By John Harrington

Date: Monday 15 Jun 2009

Compulsive deal maker Ben Habib, chief executive officer of property fund manager First Property, has overcome his scepticism about the state of the UK economy and is contemplating a return to the commercial property market in Britain.

'Institutional interest in the UK commercial property market is returning, which is tremendous for us,' Habib said.

Traditionally the company has focused on investing in property in Central and Eastern Europe, with Poland being a favoured market for the group.

'Poland has a low debt level and a well educated, young workforce,' Habib told Digital Look when explaining why he likes the medium term prospects for the country. 'Unfortunately for us, with the flight of international capital from eastern Europe the Polish market looks to be pretty dead this year, so we are looking at the UK.'

'The question for us is at what point in time will international capital return [to Poland]? The performance of the [Polish] Zloty is key; it needs to strengthen a bit. If it goes to four to the euro, that will be tremendous, but if it moves out to five, that would signal a hard time,' Habib said.

First Property, which has £10m of its own cash to invest in the UK, plus £40m of cash from the fund it manages on behalf of the Universities Superannuation Scheme (USS), reckons the time is right to move back to the UK, where there are a lot of distressed sellers.

'We've steered clear of the UK in recent years. Anyone who had survived 1991 knew [in late 2004] it was looking toppy, but now yields are high, and rents are pretty solid. Rents may fall but the high yields provide a cushion,' Habib said.

First Property is an opportunistic investor and foresees the window of opportunity for profitable investment in the UK may not be open for long. Habib reckons that a lot of private equity groups are sitting on cash and are getting ready to pull the trigger on UK property deals, though in keeping with its investment philosophy it will be looking for a big 'cushion' on a UK deal.

Despite confessing that 'I need to do deals to be happy,' Habib said that the company performs very thorough due diligence before making an investment, and has the willpower to walk away from any deal where the financials do not fit in with the company's preferred investment criteria.

'First, the property has to yield enough rent for us to repay the interest with ease. Second, the rent has to be sustainable. We check the rents versus similar buildings in the same location. We look for low capital value per square foot, we never pay market value – we take soundings from third parties to ascertain what the market value is thought to be – and, having said all that, we try to be flexible enough to ignore the other rules if we have good reason to do so,' Habib said, explaining the company's investment philosophy.

'One thing we do before buying a property that no one else seems to do is to talk to existing tenants. We ask them about the rents and although you would expect them simply to say that rents are too high, in fact they are usually very open. I think they are surprised to be asked, to be honest,' Habib said.

In common with its sector peers, the company had a difficult 2008, with revenue and pre-tax profit in the year to 31 March 2009 both falling. Revenue fell to £11.2m in the year to 31 March 2009 from £15.6m the year before, while pre-tax profit slipped to £3.9m from £6.3m. However, the decline was entirely due to a much lower performance fee payment.

'Strip out the performance fee element and revenue and profit both increased,' Habib observed.

'We've been rated number one performer by IPD [International Property Databank] in the [CEE] region for the three years to end-2008, and we've increased assets under management, unlike many other funds.' Habib added.

Though the current year and next year figure to be tough also, the company's £10m cash pile gives it confidence it can see out the economic downturn.

'Excluding the facilities management part of the business, the overheads for the group are £2m a year. We could lose all our income and survive for five years,' Habib concluded.

[flyingswan] 09/6/2009 08:53

The Property Sector appears to be recovering. What we see here in the UK could also be happening Worldwide and will help companies like INVESCO Property INcome IPI and First Property Group FPO, become again profitable. IMHO:

From today's ShareCast:
About 6% of estate agents across the UK said that property values had risen in May, while 42% said that prices fell, according to figures from the Royal Insitution of Chartered Surveyors (RICS). The resulting seasonally adjusted balance of -44 is up from -58 in April, suggesting that the pace at which prices are falling is easing. May's reading was the highest since November 2007, the Times reports.

The FT adds that London's housing market is set for a quicker recovery than the rest of the UK, according to the latest survey by the Royal Institution for Chartered Surveyors.Estate agents expect house prices in the capital to rise for the first time in nearly two years, the research shows.

[flyingswan] 06/6/2009 09:13

First Property is about to return home
Created: 5 June 2009 Written by: Nigel Bolitho
First Property (FP) exited the UK property market before it peaked two years ago. It moved to Poland where it has made a mint of money for its major client, the University Superannuation Scheme (USS) - and is now heading home. At the moment, FP manages over £310m of Polish and (two) Romanian commercial properties - £290m for USS and the rest of high net worth individual. The USS mandate allows the remaining £40m of university money to be invested in the UK. In addition, FP is likely to use its swelling cash balances to seed new UK property funds that may soon be available to institutional investors... See link for full article:

BUY - Although FP's profits may stagnate this year and next, it could attract a lot of UK institutional support as it was correct about the UK commercial property and, by and large, they were not. As the company steadily increases its dividend, we continue to rate the shares a buy for income.

[flyingswan] 04/6/2009 09:40

It is nice to see lots of £1,000 buys going through. As it shows that lots of people can feel the Property Market improving and gaining in confidence on this sector. IMHO

[deswalker] 03/6/2009 10:10

Thanks FlyingSwan. Good interview with some useful answers to pretty poor questions.

[flyingswan] 03/6/2009 09:05

Nice interview with the CEO of First Property:

[kimboy2] 02/6/2009 20:47

If the price just reflects the management fees for the AUM, which I think it probably does, then it underestimates the company.

For a start FPO is valued at £16m and has £10m cash.

It also has an unmortgaged property in Warsaw it bought for £2.3m yielding 11.3%.

It has also invested £1.5m in October in the Blue Tower in Warsaw which, with gearing, is yielding 28%.

That makes cash and tangible assets of £13.8m.

Then there is FPS, of which FPO owns 70%, producing an operating profit of £700k.

IMV that makes them cheap, and that is before any perforamnce fees from the AUM which will surely arrive again at some stage.

[deswalker] 02/6/2009 20:31

I don't agree with that. Strip out performance fees and associated costs to get an underlying picture and it's still way too cheap.

[adieadie] 02/6/2009 20:05

it's not undervalued. The price refects the earnings they will make from ongoing fund mangement. The big payouts come when they investments they manage outperform or they get a new lump of cash to invest... If new cash doesnt appear, their earnings will be limited.

I would say it's potentially overpriced even... Sorry.

[britishb] 02/6/2009 08:15

Given the huge cash pile and profit visibility from funds under management it still looks monstrously undervalued here....