Pactolus Hungarian Property Share Discussion Threads

[metaphysicalman] 24/12/2007 11:23

The share price has been pushed too low here. Trades over the past couple of months suggest some institutional selling. This appears to have slowed over the past couple of weeks. Looking at the positives:

- Great news about the loan facility - removes a lot of uncertainty.
- The Euro:Forint exchange rate has only deteriorated by 3% since 30 June, so shouldn't make too much of a dent on NAV
- Shares purchased recently by the Asset Manager - equivalent to Director buying
- Significant discount to NAV - possibly up to 50%.
- Rental yield announced in recent RNS consistent with previously announced average yields. Good news on uplifted rents (albeit flagged that future uplifts may not be so significant)
- Hungarian economy had tough time in 2007, but forecasters are predicting better for 2008.

Regards
MetaphysicalMan

[muttleyrules] 05/12/2007 10:46

Have looked at this one for a while ... the stratgey is very sensible ... buying only in the best districts in Budapest. Massive upside in the development/refurb and then steady rental income from high quality tenants. Hungary and Buda is seeing massive investment from blue chip corporates. The fact that management have bought stock is reassuring. 6.35% yield may be lower than other plays but the strategy here is very sound and the divi very safe in my opinion. This is a nice long-term story.

[slapdash] 02/12/2007 23:58

That is what annoys me..... I think overheads for the small amount of money raised mean that it is difficult to pay a dividend... yes they did one in the first year but that was out of capital gains from buying flats and then selling them on and not out of continual rental income as it should be... why the hell losses at the half year stage... what are they doing over there to rack up such apparently high management fees????

Look at DDC which is, as I understand paying dividends out of income... that yields in theory 10% so perhaps it is the better one to go for????

We shall see.... slapper

[trustman] 02/12/2007 09:26

What are the div prospects for this company?
When yields of 7-8% are available elsewhere, this one suffers by comparison......are management costs too high?
To be fair Midas purchases at this level suggest there is money to be made in the shares and I seem to recall that the div would rise after a couple of years settling in.
The recent profits on refurbed properties suggest that the real answer is to take over or liquidate the company....not really what Midas will want!

[p0lzeath] 29/11/2007 19:23

Might help stabilise the SP

[p0lzeath] 29/11/2007 19:23

Holding(s) in Company

Pactolus Hungarian Property plc ("the Company")

Holding in the Company

In compliance with the Transitional Provisions of the Disclosure and Transparency Rules, the Board of the Company was informed on 29 November 2007 that Midas Nominees Limited acquired 225,000 ordinary shares in the Company.

Following this purchase of shares, Midas Nominees Limited and related parties are now the beneficial owner of 1,812,212 shares in the Company, representing approximately 7.08 per cent of the issued share capital of the Company.

Midas Nominees Limited is a related party to the Company's Asset Manager, being Midas Investment Management Limited.

For further information, please contact:

Asset Manager:

Mark Sheppard (Midas Investment Management Ltd - 0044 161 242 2895)

Nominated Advisor:

Liam Murray (City Financial Associates Ltd - 0044 207 492 4777)

PACTOLUS HUNGARIAN PROPERTY PLC

[p0lzeath] 29/11/2007 19:00

I have a brilliant handle on Bp property. Don't trust the 20% pa increase stats as it's rubbish. Look at the real estate info on the sites I named. Inflation is 7% and property is just about keeping up with that in Bp.

Thought long and hard about PHU, had a big position in it earlier this year for the divi but was glad after thinking twice to get out breakeven. Has fallen since. You're better off looking at HSTN or DDC on their lows (now, actually, don't hold either myself) or wait for PHU to look silly cheap, low 30s coming up.

If you want to make money on Hungarian property and can wait 5-10 years, you should go out there and buy some village plots or 'weekend houses' in the outlying villages about 30 mins from Budapest. Still cheap as chips. Orbital motorway being built near to one very nice bit.

[slapdash] 29/11/2007 18:52

polzeath - big fall today.. the one thing t hat worries me is that I have no handle on Budapest property

when I went to these property investor shows all these countries say their property is up 20% a year or some other crazy figure... the countries have no reliable statistics..... I suppose even in the UK it is somewhat guesswork..

In any event I just don't know what Budapest property is doing.... any thoughts...

I suppose they could get hit by the credit crunch as most people have mortgages in Swiss francs as the interest rate in Budapest is so high... economic growth there I think has been weak but it could do better in the future... slap

[p0lzeath] 29/11/2007 13:54

Slap - oversupply and affordability are certainly issues, but a new Hungarian middle class is rising extremely quickly and they have to catch up on 40 years of rubbish housing.

Research:

Register free here and have a good nose through the real estate section www.portfolio.hu/en

Also good real estate articles online in Budapest Sun, Budapest Times and www.BBJ.hu

[slapdash] 29/11/2007 11:39

polzath... what I worry about is whether there may be oversupply in Eastern Europe...

after a world wide property boom developers could easily raise cash and so went for emerging markets where they could get hedge fund style fees..

however, could there be oversupply the same way there is in Leeds/Liverpoola nd Birmingham??? In those cities lots of people from London just bought off plan buy to lets at inflated prices....

It does seem odd when loads of Irish and UK guys fly out one day and then buy loads of property the next...

Surely with property you want two attributes..a place people want to live... and a place where there are loads of jobs... do westerners want to live in Budapest... I think not... and the guys from there are coming over to the UK... are there loads of jobs?? Maybe some but probably not an employment boom..

those are my concerns... loads of off-plan stuff being hawked to overseas investors... can the native Hungarians even afford these flats being built all over Budapest??

Salp

[slapdash] 29/11/2007 09:24

what makes you bullish on Budapest property???? They all seem to be over here working!!!! Slapper

[p0lzeath] 29/11/2007 09:10

Looking good for an entry point mid 30s

[slapdash] 29/11/2007 09:04

another great IC tip... how do they always manage to pick the top??? Slap

[slapdash] 26/11/2007 12:52

As i understand the issue is that Hungarian interest rates are so high... say about 15% and that is difficult for property there.. Slap

[p0lzeath] 26/11/2007 11:41

Also cf Hungarian inflation is currently about 6.7%

Ie real value of the investment has to take inflation into account.

[slapdash] 26/11/2007 11:35

If it is so cheap why did they make a loss at the interims... high property yields are all very well but for a small company they get eaten up by management overheads... so the promised 6% or whatever it was as Hungarian property has this yield falls to say 4% after their management costs...

[hectorp] 26/11/2007 08:51

Thanks polzeath,
I will wait to see if and when they completed that E9 M loan facility, since the September update...

[p0lzeath] 25/11/2007 19:11

Cheap as chips

[slapdash] 16/10/2007 19:27

I think emerging market property in Eastern Europe is a tad oversupplied... some price falls... and the citizens there are borrowing in other currencies which could all blow up if those currencies (mainly the swiss franc) start increasing their rates as they are starting to do..

with Eastern Europe there is also the depopulation factor... I think Bulgaria will have something like 25% less citizens in 50 years..

so not simpy a clear cut long call in my view... best way to benefit from Eastern Europe might be to buy property in the UK somewhere where all teh polish people go!!!!!

slapper

[slapdash] 12/10/2007 11:42

sure IC tipped this above 60p and are always positive on stuff they ahve tipped before.... but they get most stuff wrong...

Slaper

[stucom] 04/10/2007 09:53

POL....IC...THIS WEEK.....negotiating a short/med term finance facility to be used to increase number of apartments owned in budapest (54 @ end june,now 65,expected to hit 95 by march '08)apartments are old commie members turn of the century 2 bed gaffs.once refurbed,they be rented out to overseas 'blue chip'companies on 2-3 year leases,yielding 8% goes on about recent problems,but is 'fast becoming a centre for accounting and payroll outsourcing which should boost rental demand'...all apartments are in dist 5&6 (close to parliament building)they cover an area equivalent to the City of Westminster plus Kensington and Chelsea.
positives are PHU are cash +tive on a monthy basis,with current rent (i'd rather they got paid in euros!)climbing to almost 950k euros.2 villas purchased,which are to be split into 9 flats....
share news equates to...............
'like other property companies,concerns over inflated values has pushed PHU's share price down fron June high.in buda,prices have only rise modestly over last 12 months,but may change as more foreignservice centres are set up there.the Hungarian minister of Economy& Transport predicts the number will double to 80 over the next 3 years......
all down to belief i suppose.will the 'blue chips' come,will their economy remain stable,and can they push their growth targets..3 years to double.not sure how that will inpact on sp,timescale,as i've only come across this company,via looking at euro comps as a whole.......good luck,will watch.....stu