First Property Share Discussion Threads

[m_kerr] 24/12/2020 20:40

i agree that habib seems to have the midas touch, and has a record of seeing trends to profit from in the property market. going back years, they have always had a substantial cash balance, so in my view, i dont think they will invest more than £10-12m in equity, which if not co-investing only allows them to buy £30-40m of property. i dont take it as a given that third parties will pile in to make co-investments. i expect them to proceed with caution, and that's not necessarily a bad thing as it's better to sit on cash than enter into average deals.

[stevegrass777] 23/12/2020 23:30

Ben habib and the others seem to have very good timing and always seem to make good deals, if you look at the last building that was sold just before covid effected the market properly, that move leaves fpo in a great position to buy assets on the cheap.
Also plenty of other great moves along the way.
Fpo's market cap is depressed at the moment,and we are awaiting for the money from the last sale to be deployed so I would guess that the market cap will increase once a decent rent paying investment comes along.
It's just been a bad year for lots of companies including property companies, but fpo is better positioned than most and that's down to good management.

[m_kerr] 23/12/2020 19:30

what are people's thoughts on remuneration? CEO got £1.6m in 2019 and £1.2m this year. and there's plenty of chunky bonuses all round when they make excess profits. this for a £41m market cap company. and the largest shareholders are either his friends, or very long term shareholders (basically since inception). so basically they control the company and so there wont be any downward pressure on his pay (but is there ever??). corporate governance is an issue here as none of the directors are independent.

[stevegrass777] 30/11/2020 17:32

Also aj mucklow was a fantastically run reit and has been swollowed up buy London metric, thay had a piece in one of its annual reports that stated if you invested when it floated on the stock market in 76 or there about £2000 it would be worth £2m or something like that, (this is just off memory so not exact word for word.
But just trying to show reit's can do well over the long term if run well.

[skyship] 30/11/2020 17:24

Just put CP+ in the BB Box; or click this link:

[m_kerr] 30/11/2020 17:12

usual little bounce following simon thompson's update.

sky ship - over the long term, the share price needs to be close to net assets, as ultimately a shareholder can only sell out at NAV. the discounts of British land and others are down to structural problems. large illiquid portfolios are highly prized in a rising market, not so in a falling one where a substantial discount is appropriate. i think first prop are very well placed as they have a small portfolio with cash being more than their directly owned equity, and the ability to move where they see value rather than being tied down to a country, or type of asset. but for me the real opportunity is if the investment community recognise it as an asset manager. and for that to happen they need to grow that side of the business, and then the market cap needs to be much higher, more like £100m+, so that institutions can purchase stock.

and thanks for the welcome, yes i'm relatively new to investing but have been doing so for about 5 years. i'm not sure how to get to the CP+ thread though?

[standish11] 30/11/2020 13:24

Conclusion of Simon Thompson’s update today:-

Trading on a modest PE ratio of 9 and offering a near 5 per cent dividend yield, expect the hefty discount to book value to narrow as the cash pile is deployed. Buy.

[skyship] 29/11/2020 13:42

m_kerr - a bit of a sweeping generalisation there; though also a lot of truth in it. Your references are of course to the blue chip propcos (BLND, LAND etc) which had to seriously downsize and launch massively diluting rights issues back in 2009.

There were others who have done very well and massively outperformed - SGRO & CLI being two such.

Judging by your profile saying you arrived here at ADVFN as recently as just last year; perhaps you are new to the investment game. If so, lucky you - a lifetime ahead and much to learn. Coming as one with over 50yrs experience; might I suggest you don't discard the REIT sector. Follow us on the CP+ thread and keep an open mind.

Good luck...

[m_kerr] 29/11/2020 11:52

you need to have a closer look at the accounts. none of the interests in associates are in the UK, which are the material ones. they have £3.2m of equity exposure to the UK under the investments category. so not quite nil, but it currently represents about 4.9% of Fprop's assets as there's about £64.9m of cash and equity held by the group in total. but in terms of that 4.9%, in gross asset terms the UK may be a fraction of that due to the high leverage of the group properties in poland and romania.

[cflather2000] 28/11/2020 23:25

FPO's ex cash nav is made of of uk property more than any other country, I believe, through the funds

[m_kerr] 28/11/2020 22:29

reading some of these comments proves my point that this isn't a well understood company. why should it be valued in line with a UK reit when it doesnt own any UK property? not to mention it isn't a REIT. and REITs are not just about discount to NAV. most UK reits have been capital destruction machines over time. investing at the top of the cycle and selling at the bottom. chasing unsustainable yield. having to sell off what few good assets they have, leaving them with the rubbish. most have large illiquid portfolios that there simply isn't a market for at the moment, or at least at a price somewhere near book value.

[eezymunny] 28/11/2020 14:08

Isn´t what remains of their property on a LTV of 70% or something? Equity on that could be wiped out...and that would leave the fund mgt biz worthless too.

I like FPO but a bit risky here for me. Give me 25p por favor...

[stevegrass777] 28/11/2020 12:38

The difference is in that 37p a big percentage of it's nav is in cash couple that with being able to gear it up via the fund management side of things they are better positioned to buy property on the cheap.
Mainly property companies are at wide discounts because of fear that the property market will tank, those fully invested will feel the full force of this if it happens, those cashed up and with a big ability to gear up will take full advantage of cheaper prices.
So fpo isn't quite in the same boat as some

[skyship] 28/11/2020 11:45

Problem with the share price @ 37p is that at a 32% discount and a 4.5% yield, FPO actually look fully priced against so many UK REITs - BREI & SREI in particular. Then if you want a UK/Europe mix CLI far better value on a 39% discount.

[jpmorgan] 27/11/2020 10:37

Thought results were positive and as expected in terms of financial numbers (NAV and cash resources), and hopes for the future, but noted the view on reduction on reduction in rental income in the short term and the need to reinvest relatively soon. FPO certainly has a stable setup to leverage upon, and the financial resources to take advantage of these opportunities and as always the potential is there, and is on my monitor list. Still holding back till can see the direction/appetite for non-uk property looks to change in market.

[stevegrass777] 27/11/2020 09:44

Yes with the NAV performance it's hard to explain fpo as a lifestyle company, it's just the share price has lagged nav.

[blobby] 27/11/2020 09:32

Disagree... they are too active and successful for that description.

[fanshaw] 26/11/2020 14:50

Another Lifestyle Company.

[wobblywilbur] 26/11/2020 09:07

A holder over many years and will be good to see the current 'cycle' play out. share price way under current NAV and whilst we may have to be patient I see significant growth in the medium term.

[stevegrass777] 26/11/2020 08:48

Exactly catsick, these are very compatant property investors and are cashed up going into a distressed market.
Very undervalued

[catsick] 26/11/2020 07:41

These guys are smart, ran very leveraged but with non recourse debt in a hot market and now are cashed up when there are bargains to be had, massively out perform the reits and now can grow aum by 300m by deploying cash in a buyers market

[m_kerr] 25/11/2020 17:52

i think one of the main reasons there's a lack of interest in the shares is because it's not a REIT. most income investors only look at REITs. because FPROP change their approach based on market conditions, this unpredictability puts a lot of people off. all their direct investments are in eastern europe which again most conservative UK income investors will not be interested in. all of this doesnt affect intrinsic value, but it does make you wonder if this lack of interest limits a revaluation to NAV. at least in the short term, i'd like the shares to fall as i've yet to make my purchase! i'll be reading tomorrows results with interest though.

[leopoldalcox] 23/11/2020 16:28

That's fair JPM. I've built a position over the last couple of weeks. Looks too cheap for me

[jpmorgan] 23/11/2020 14:03

There us a lot of positives when looking at the company in terms of financials and potential to grow with a few small steps on asset management side. Over 10 years the CEO/Company have been able to ride the property cycle relatively well.

On balance, I have decided to avoid this one primarily as it is heavily focused around the CEO in terms of control/approach with high fixed costs in terms of his renumeration in good times and bad. Will likely do well with proceeds of big office sale allowing a buffer coming through, but not one to chase for me, but will review upcoming results/commenatary to see if the facts/investment balance change.

[m_kerr] 19/11/2020 18:13

there's a lot i like about this company. a few concerns i have include the very short lease length of less than two years, which is especially concerning given that most of their directly owned assets are in poland where there is a higher office vacancy rate than most EU countries. i'm aware it seems to be standard practice in poland to have short leases but as an investor i want leases secured for the next 5 years at least. from what i've read, landlords are having to offer incentives to get tenants to sign new leases. firms are also hesitant to commit to leases given covid uncertainty and work from home. i also wonder how willing third party investors will be to give them more fund mandates, or extensions given the uncertainty.