Palace Capital Share Discussion Threads

[makinbuks] 06/2/2023 15:37

Lot of paperwork for £2m. Using the existing approved scheme is fast, cheap and simple. Though I agree B share distribution is best for the shareholder

[spectoacc] 06/2/2023 15:34

Perhaps some early repayment penalties - think I'd go B-share over buybacks, ie tender at NAV.

[makinbuks] 06/2/2023 15:30

Its the only sensible thing to do while we trade at a discount, providing you trust the NAV and the lenders are happy to see shareholders paid out before them

[nickrl] 06/2/2023 13:47

like the last buyback didn't do anything for share price but i guess its a way of recycling the surplus cash from Hudson

[makinbuks] 06/2/2023 11:13

They don't expect the price to progress much then!

[nickrl] 06/2/2023 10:13

1m buyback programme launched not to exceed £2m

[konradpuss] 04/2/2023 21:56

Sorry to say Peter G. is over at First Property. He has not bought more here of late.

As a friend of mine says "follow the money:.

[baner] 03/2/2023 13:26

PC NAV dec 2022 should be 300p +/-. however, the "implicit yield" is a very high 10% and much higher than their peers. according also the room for dividends is larger than with most REITs.

[m_kerr] 01/2/2023 18:49

UK commercial property REIT portfolio fell almost 18% from end Sep to end Dec in their latest results. industrial fell 22%, offices 12%. south east particularly hard hit due to the very low yields there.

for 'rest of uk', which would probably describe palace capital better, industrial fell 17%, offices 10% and retail 12%.

[baner] 01/2/2023 08:51

Kerr

I believe you are absolutely right. There is a low and decreasing gearing in PC and the property income is nearer to 10% of the Enterprise Value - this is likely to be one of the best numbers in the sector.

[m_kerr] 31/1/2023 13:32

i think this is one of the better value reits out there given the discount, relatively low leverage and yield. it seems likely they'll do what circle property have done, and sell their portfolio off bit by bit. they could achieve that over a 3-5 year period, in the mean time paying out a roughly 7% dividend yield.

konrad - agree. tenant bargaining power due to the ongoing downsizing due to remote work will ensure that landlords have to foot most of the bill. PC seem aware of that, and they have reduced exposure to the E, F, G properties over the last year though. about 56% of their portfolio was A-C at FY22, and that's probably if anything risen since.

[konradpuss] 27/1/2023 07:06

banner, I am suggesting many investors and the market generally has not priced in structural obsolescence which in part reflects the EPC ratings. In respect of offices there is a slow train crash going on. You have a major shift down since COVID in demand to the best in less quantities and less commitment being offered by occupiers, to serviced or small suites with short leases and big BREAM excellent kit. LSH are the only agents to trumpet this. The big boys (JLL etc.) will not as this would upset their big clients.

If you look back to my posts here, when Sinclair bought that last 'safe' office investment I called this all out then.

Slow train crash I tell you as all leases do not end this a.m. I speak from first hand experience owning some of this stuff which luckily has an alternative residential use. Some office property will prove very costly and difficult to repurpose and will not be economically viable especially that in doggy locations. I am also unfortunately a valuation surveyor - non practicing thank God.

[baner] 26/1/2023 21:37

conrad

r u suggesting the Valuers are not aware of the EPC issues when they present their numbers on the PC portfolio? i believe that is a very naive idea, if so!

the York flats are selling OK and as they are unencumbered there is a LOT of free cash coming out from these - which no doubt will be used to buy back shares at a good discount to the NAV - and thus the pro forma NAV will increase again. meanwhile the cash flow is strong and will allow PC to pay out 15p+ as a divi going forward. eventually shareholders staying in should receive 350p+ as assets have been sold out.

[konradpuss] 26/1/2023 20:57

Camerongd, it is surprising that most folk do not want a mortgage from a non-institutional source.

It is very usual in the USA, I believe.

The York residential does not stop the company from selling all the other properties.

Now you might say, well values will improve for this stock. Not in my humble. I wonder what the EPC's look like on the buildings? Energy ratings will be a major hurdle for offices etc. that are not prime. The improvements required to make this sort of kit A or B on an EPC rating would not be cost effective.

Good old Neil - long gone now to some Mayfair watering hole.

[camerongd53] 26/1/2023 20:34

Suggestion

If PC owns the York flats without them being pledged for security, could they not sell them with a v good finance mortgage to purchasers (even a 0% Int mortgage) with the option of selling the portfolio of mortgages on the apartments at say a market interest rates in say 3 to 5 years.
This means the a sale at a good price and the expectation of full proceeds being received in future (3-5 Years) when a major distribution or liquidation of PC

This would tidy up the balance sheet for a future liquidation.

[baner] 06/1/2023 12:31

either way is good for shareholders - however the LTV is so low today that it should be clearly more attractive to buy back the shares at such a large discount to NAV.

[nickrl] 05/1/2023 10:47

@baner my take is they will cut debt with HQ sales and this is best move as there hedges are expiring imminently. I did ask them whether they were going to replace them and answer was "we will update the mkt in the usual way through RNS"

[baner] 05/1/2023 10:11

An interesting point is that if PC use the proceeds coming in from York to buy back shares at 60% of NAV, it becomes very attractive to consider a small discount on the flats in order to speed up buy back of the shares. The net effect on the NAV going forward will be clearly attractive.

[solarno lopez] 30/12/2022 15:29

No doubt but you miss the underlying point that people want to live in York.
Shortage of living accommodation lifts prices the old supply and demand issue

[konradpuss] 30/12/2022 14:29

I think this seems like all of York apart from the Hudson Quarter! Slash the prices and get the apartments sold.

[solarno lopez] 30/12/2022 14:15

According to The Times York has seen the fastest price growth in property prices this year with an increase of 23%

Must be positive for the PCA flats in the Hudson Quarter

[konradpuss] 22/12/2022 21:57

The telling fact is that Peter has not been buying.

So why has he not been averaging down?

Actions not words.

[spectoacc] 22/12/2022 20:44

@baner - you sound like a man who's long :)

Is c.29% LTV low, in a falling market?

[pdosullivan] 22/12/2022 13:58

It would be preferable to see another round of buybacks.

[konradpuss] 22/12/2022 10:57

Maybe time for a fire sale prior to asset values slipping further?