Hammerson Share Discussion Threads

[williamcooper104] 20/5/2020 20:40

Yep - some form of low base rent with a turnover top up - but with the turnover taking account of on-line fulfilment

[edinandy] 20/5/2020 15:42

I think this misses the main issues. A number of retailers can't CVA and actually make plenty of money. Rents will remain steady for good units and assets. The biggest problem we have is too many shops and trades bills are too high. We need to establish consumer confidence and expenditure before rents can be truly be rebased.

[nickrl] 20/5/2020 15:39

Williamcooper spot on which is why all propcos would be wise to engage tenants now rather than have terms imposed via CVA's. Furthermore BPF need to get a consensus agreed across the sector and govt need to be clear with lenders whats expected over loans in terms of modifying them to reflect there situation over rental income given the liquidity BoE are providing.

Finally i would suggest govt will extend protection to tenants to at least the end of the new furlough period i.e. end of October and expect that tenants/landlords to be undertaking these discussions. Only when there is reliable forward visibility of where rents will settle will there be any possibility of accurately pricing property and thus value of companies.

[williamcooper104] 20/5/2020 14:36

Yep upward only but average lease lengths are no where near what they once where There will be some over-rented Next stores that hang around; but most other retailers will CVA their way out of onerous leases

[trcml] 20/5/2020 14:34

"I think it's hard to put any figure on rentals when most can't be opened…". You might think that but it's not. I am not going to explain in detail except to say that the answer is to be found in business tenancy law and valuation know-how.

[researchcentre123] 20/5/2020 13:42

I think it's hard to put any figure on rentals when most can't be opened - how much is a hotel room worth when anyone who rents it isn't allowed to visit? Do you take that value of zero and calculate the hotel shld be free? Of course not, as coronavirus will not always be there. A discounted cashflow basis of valuation has to allow for a year or 2 of lower rent - and then significantly higher rent as recovery and inflation kicks in. In reality property has been a good store of value, surviving the black death, wars, hyperinflation etc.. in fact as the Germans many years ago attempted to print their way out of recession, it was the property owners who got rich, especially when they had some debt. So in conclusion, asset price will have come down but not that much - and certainly not 10 times as you might think on the ratio of net assets to share price

[trcml] 20/5/2020 13:37

Even if ERVs are down by as much as you suggest, ERV only applies on expiry/reversion, not rent review. Rent review upward only ensures the passing rent is the minimum for the term (unless the base rent is a lower initial rent). Only a variation to the existing lease as regards rent would affect the passing rent. I agree however that if premises are overrented then yield would rise. But we do not know how many are, let alone the remaining term for each unit, only the certain term for parts or all of the portfolio. Also, we do not know what capital contributions nd other inducements HMSO is employing to maintain rent levels generally.

[williamcooper104] 20/5/2020 12:15

As a starter for 10 - retail ERVs are down long term around 40-50 percent Yields are and will be supported by QE but any investor will still want a higher risk premium for retail property So a 40-60 percent discount on GAV is not unreasonable Even with that level of discount, alternative use value is still, for many of HMSOs assets likely to be lower (as in alternative use after full costs of redevelopment and risk margins needed for development - eg alternative use residual value land price)

[williamcooper104] 20/5/2020 12:12

If you have a long time value then there's value in hmso option value Which is why liquidity/debt maturities is key

[researchcentre123] 20/5/2020 10:42

I think it's certainly an underpriced option, and unlike options, it has assets other than the time value. I see forced selling highly unlikely. Every business in the UK has loans they can tap into from the govt at the moment. In the last recession, provided a company was rated as hammerson rated companies were able to tap into the quantitative easing money. I'd be surprised if something similar doesnt happen here. We are really way beyond the days of forced repossessions, and anyway, they can pay the interest for now.

[hpcg] 20/5/2020 09:32

That's what I said. The share is now priced as an option. In some circumstances it is a zero, in others worth double. Or whatever, depends on what you feed in to Black-Scholes not least the risk free rate and time horizon. R.e selling, there is such a thing as forced selling. In the case of houses as unemployment rolls through there will be many that have to sell, in addition to the continuous drip of estate sells. Rents will plummet as household size collapses. Similar themes in retail property though there is an even bigger imbalance in distressed sellers to an absence of buyers. As you say, the HMSO share price does discount a lot of bad things, but not all bad things.

[researchcentre123] 20/5/2020 08:49

Hpcg it's all about price. We know shopping is affected - but does that merit such a write down? We know house prices will be down in today's world - but do we write them down 20% and wait or sell them for 20% what they were worth 3 months ago?I know what I think

[hpcg] 20/5/2020 08:30

White123 r.e. 916. The situation in the stockmarket is the exact opposite of what you describe. The overwhelming balance of funds is long only, there are hardly any shorts. Institutional buying, FOMO and me too is the source of momentum in the market that propels almost every company to a share price from which is only delivers negative value.

What is driving HMSO volatility is optionality. The future is uncertain, no one on this board, investors as a whole, or company management knows how things will pan out. However it does seen likely that for reasons of unemployment, working from home and altered shopping habits spending at retail destinations will be significantly lower year on year even when stores are fully open. Any DCF is assumption based, and some assumptions result in no return for equity and some do.

[s34icknote] 20/5/2020 08:27

Expecting a light house rns ?3.6 million buy two days ago ?Sicknote

[s34icknote] 20/5/2020 08:26

Some profit taking !And some nice 250 k buys !Sicknote

[s34icknote] 19/5/2020 20:15

1.50 would be 50 percent fall from January !Sicknote

[tomboyb] 19/5/2020 18:52

Could be a decent medium term hold here -

[ny boy] 19/5/2020 18:48

Off to the races once we start closing above 100p

[s34icknote] 19/5/2020 16:53

Closed on a high ,Sicknote

[ny boy] 19/5/2020 16:18

Going up, whilst other stocks pull back, always a good sign imo

[researchcentre123] 19/5/2020 15:52

Well maybe Lighthouse will take them over or change the nanagement. They've got the skills and with a proper plan they'd get my vote

[williamcooper104] 19/5/2020 15:15

It's very simple There may well be a golden future for (some of) HMSOs assets But there's the small matter of getting to that future and a £200m bond payment due rather soon So it's a calculation that hmso will need to do a rights issue and that that issue will be deeply discounted - deeply discounted rights issue is far better than distressed property sales IMO Or given HMSOs managements stellar track record of epic shareholder value destruction there's every chance that we see a proper car crash

[researchcentre123] 19/5/2020 15:12

Perhaps Lighthouse can unlock the value in these shares faster. I can't see a diamond mining family being the passive type of investor

[sr2day] 19/5/2020 15:07

ranji,have you bought yet.they will be 72p tomorrow.