Kennedy Wilson Share Discussion Threads

[mad foetus] 19/4/2016 12:42

Good call, it does seem to rotate more than you might expect and I may do the same next time.

[hpcg] 19/4/2016 12:34

This rotation I did sell some at 1148 and buy back at 1087. I'll keep a closer eye on the chart than I did before as it does look like I can gradually reduce my basis.

[mad foetus] 19/4/2016 12:19

Well, more cheap debt issued: one assumes they have lots of assets they are looking at presently. Looking forward to the update in a couple of weeks, looks a very well run business but the sector is flagging at the moment and it will be interesting to see where their geographical focus is. Still, if yield remains at 48p, that is pretty good.

[hpcg] 04/3/2016 13:26

Wow, I'm amazed about that. A FTSE250 ETF was the first one I ever bought, and I rather assumed a mid cap instrument would have substantial proportional use.

[mad foetus] 04/3/2016 10:39

I don't know about EPRA, but I've spoken to brokers about indices and the only ones that matter in the UK are the All-share and the FTSE 100. There simply aren't enough 250 trackers for the leap from the all-share to 250 to make any meaningful difference, apparantly.

[hpcg] 04/3/2016 10:31

I never know how much index inclusion matters, but the RNS today can't hurt. Very strange chart for a property company all over with the recent fall and rise difficult to explain.

[mad foetus] 04/3/2016 10:18

well, that's been a nice bounce. Not sure why it ever fell so far. The correction in January was very odd - lots of solid stuff backed by real assets got heavily sold off along with more frothy things.

[skyship] 27/2/2016 14:23

Citymohawk - if you see this, pls could you add the NEWS to the HEADER

I admit KWE revealed a pretty impressive set of numbers yesterday:

[djderry] 26/2/2016 21:46

Almost 10% of my overall portfolio in these,really solid progress.

[mad foetus] 26/2/2016 08:44

Pretty sound set of results, happy to continue to hold. NAV up 14% yoy, showing the value they can add to the portfolio, which is doubly impressive when you consider that it has only been running for a couple of years, so hasn't even had a cycle of acquire - improve - dispose or re-let.

[hpcg] 26/2/2016 08:14

Dividend up from 38p to 48p, or if one wishes to be more conservative quarterly from 10p to 12p. NAV, either adjusted or IFRS at close to 1200p. I think the ship is on course made by earlier projections.

[skyship] 24/2/2016 11:45

...& forgot to return!

The 2nd favourite is UAI @ 204p ahead of the Finals at the end of April. Likely to reveal an NAV of 300p, so a 32% discount. May also hold last year's dividend rate (inc. the 8p Special) which would provide a 6.5% Yield. Possibly massively oversold due to the BlackRock sales; sales being picked up by other fund managers, esp. MITON.

[skyship] 18/2/2016 12:40

mick - certainly continue to ignore your broker's "advice"!

Personally I'm not a fan of KWE, as I intimated in 112 above.

My two favourite propco plays are:

Local shopping REIT - LSR - see the end of this post:



(called away, will return with the 2nd....)

[mick] 18/2/2016 10:46

SKYSHIP - correction average purchase price for KWE was £10.40.

[mick] 18/2/2016 10:44

Thanks SKYSHIP for taking the time to provide such a helpful and informative post.

Since I took control of my own pension fund I am increasingly interested in the commercial property sector both for yield and also more recently the opening up of a material discounts to NAVS.

Am still being cautious given the volatility of markets, brexit etc. Ideally I would like to wait for a further market correction before investing.

I have taken a stake in KWE at an average price of £`0.40 - am attracted by the 4% yield and discount to NAV. Am curious to see what the NAV will be at the next results on 26th Feb.

My broker is advising me to invest in their own unit linked unlisted fund but I am not attracted by buying at NAV and lack of liquidity.

As you say, a lot to learn but certainly the commercial property sector looks very interesting.

Again many thanks.

[skyship] 18/2/2016 09:44

Mick – perhaps a bit of learning to be done; but IMO you have discovered one of the very best sectors for profitable plays over the long-term, medium-term and short-term – perhaps second only to Private Equity – see the PE thread for that sector.

In the property sector long-term is not a “Buy & Forget” strategy. IMO you have to treat the Cycle between Boom & Bust as the long-term play. The sector as a whole has frequent cycles, usually mirroring the interest rate cycle. The best property players (Nick Landau, Daniel O’Neill etcetcetc) manage to catch the cycle, selling into strength before a downturn, then emerge cashed up for the next rise. For a picture of the cycles, look at the long-term chart of blue-chip bellwether British Land (BLND).

I am not a property man per se, though I regret mightily that I never worked in the sector. I am however a listed propco investor who has had a modicum of success buying mainly the tertiary players when trading on absurdly high discounts. My fatal weakness however has been to inevitably sell too soon!

The key stats and factors to monitor with individual companies are:

# Loan-to-Value (LTV) rate, ie level of gearing
# Financing costs & swaps liabilities (most propcos historically hedged their debt)
# Net Asset Value (NAV) Discount or Premium
# Portfolio Geographical spread
# Portfolio Sector spread – Offices, Retail, Industrial, Leisure
# Tenant quality
# Weighted Average Unexpired Lease Term (WAULT)
# Yield & Dividend cover
# Management

Happily all these facets are described in considerable detail in the usual corporate announcements.

Have fun; and when you have queries, post on most propco sites or on the Commercial Property thread (link below). You will find there are many helpful and far more knowledgeable investors than I.

[mick] 15/2/2016 16:58

Thanks SKYSHIP for your helpful and informative post. I note the 25% discount to NAV for BLND - I wonder at that level of discount is that a good buying opportunity?? I must say I don't have much experience with property shares - am more used to speculative energy stocks.

Again many thanks for your post.

[skyship] 13/2/2016 14:34

hpcg/mick. KWE just playing catch up after the sector blue chip / bellwether stock BLND had fallen 20%+ to a 25% NAV discount! Same happened to NRR last week - extremely predictable that one. KWE could perhaps now at 998p be trading on a 15% discount; so still by no means cheap, especially as they've been buying plenty at the top of the cycle.
==========================================

UK property trusts suffer steepest fall in five years.

Judith Evans, FT Property Correspondent

Investment in UK commercial property declined 19 per cent in the second half of 2015 from a year earlier, according to new data that confirm suspicions of a slowdown in the market.

Some £32.7bn was invested into the sector in the six months to the end of December, down from £40.5bn in the same period of the previous year, figures from the information provider CoStar Group show.

The commercial property gold rush might be over, said Richard Yorke, director of market analytics at CoStar, adding that investment was especially slow in the fourth quarter.

The year as a whole was the second strongest on record, with £67.5bn of investment, 5 per cent down from the previous year's high.

But a changed atmosphere among investors became evident when the sale of Heron Tower, in the City of London, to the Chinese insurer Anbang fell through in September, while another major asset, Devonshire Square, was put up for sale but then removed from the market. A series of other properties on the market for about £100m were subsequently withdrawn.

There were a few deals that did not happen late last year because investors were unrealistic about pricing, which in general was quite racy, said Mr Yorke. “We may have reached the top in terms of pricing.

(£32.7bn Invested in commercial property in the six months to end Dec'15)

But he said volatility in China, falling oil prices affecting levels of Middle Eastern investment, and jitters about a potential UK exit from the EU had also cut into investment levels.

Investors may pause ahead of the referendum on the UK's membership of the EU, which is expected this year, as they did ahead of the 2014 referendum on Scottish independence from the UK, he added.

Sir George Iacobescu, chairman of Canary Wharf group, said investors were also wary of the currency risk posed by the EU vote.

(£40.5bn Invested in commercial property in the six months to end Dec'14)

The hiatus that you see today is in part because of Brexit, he said. People are thinking twice because if the currency goes down you will suddenly see your investment fall in value.

The impact of falling oil prices was seen last year in the levels of Middle Eastern money flowing into the market. The Qatar Investment Authority bought Canary Wharf with Canadian investors Brookfield in a £2.6bn deal in January 2015, but with that deal excluded, Middle Eastern investment dropped to £1.6bn, its lowest level since 2012.

Investors shifted their focus to the regions: some £3.2bn flowed into the big six UK cities outside London, the highest level since the 2008 financial crisis.

We may have reached the top in terms of pricing" - Richard Yorke, director of market analytics at CoStar

They are now turning to the question of what will happen in the market if pricing has indeed passed its peak. Mr Yorke said the UK property market's size and liquidity would continue to attract investors.

Most observers expect yields have bottomed out and probably will start to drift up at the beginning of 2017, but don't expect a big correction, Mr Yorke said.

[mick] 13/2/2016 14:13

Yes hpcg - I'm thinking a forced seller as well.

So hopefully a good buying opportunity. Certainly the Irish market remains very strong so can't envisage problems with their Irish portfolio. Not familiar enough with their UK / Continental portfolio.

[hpcg] 13/2/2016 13:33

Either something is badly wrong - or someone is liquidating with forced urgency. No volume spike, though it is slightly higher than normal, so I think the latter is more likely.

[mick] 12/2/2016 18:49

It will be interesting to see what the NAV is on 26th Feb - my feeling this is a good buying opportunity to buy KWE but perhaps I'm missing someething! We'll see soon enough!

[citymohawk] 12/2/2016 17:33

The whole sector has a bearish view by hedge funds. For whatever bizzare reason that is!

[mick] 12/2/2016 16:54

Still can't figure out what's causing the continuing weakness in KWE share price - will be in two weeks on 26th Feb. Looks like there is an institution selling down.

[mad foetus] 05/2/2016 09:47

I'm in same boat hpcg: I bought first at 1035, then at 1050, again at the last dip at 1120 and thought that would be it. Should really think of buying more. I'm always surprised by the dips.

The results will be interesting: it is 2 years since launch, now fully invested and geared up and at launch it announced an aim of 15% pa returns.

[hpcg] 05/2/2016 09:43

Hit my average so I have added another slice. Looking at the chart I clearly should be trading it but it never really occurs to me to sell.