Public Services Properties Share Discussion Threads

[c1d] 19/10/2012 10:05

I read an article in the FT earlier this week which said that there are indications of a house price boom in Germany thanks to low interest rates making borrowing cheaper and Germans and foreigners viewing German residential property as a good investment.
The article did not talk about commercial property/care homes but if there is a spillover from the residential sector it might mean that PSPI gets interest at a good price for the German properties.
Not saying this is behind the share price rise but maybe every little glimmer of positive news helps a bit.

[loverat] 18/10/2012 12:35

Seems like there is more interest now - whether that is due to the lies on various sites or other factors. Still - factor in all the negativity and concerns etc and this is still bombed out and due a rise.

[jonno1] 18/10/2012 11:43

someone seems to be interested

[loverat] 17/10/2012 18:09

The poster on LSE is well known for making up rumours of takeovers etc. He makes a living out of it. You may remember he visited these threads once before so the above will most certainly be false.

However, as the management are looking at the sale of assets, something may be in the pipeline or/and it could be that it is dawning on people as to how far this has fallen. Anyway, I hope anyone who bought today on the strength of those rumours makes a few bob. There seems to be a renewed momentum here whatever has caused it.

[loverat] 13/10/2012 13:38

Some increased buying last week but still should really be alot more to start off a decent recovery.

Directors here said that the last review was to address the gap between NAV and the share price (then £1.30 and 65p approx) Well, they managed to do the reverse (now 65p and 10p) and in the process completely destroy any confidence in the company and the directors. If I was a director here I would be embarrassed.

Agree - over to them to show the lead and buy the shares.

[bisiboy] 13/10/2012 13:24

i would like to see some director buying i will not be adding to my holding until then.
yet another part of the train crash which is AIM.

[loverat] 10/10/2012 07:13

My comment: Yes - probably agree no one should have invested in PSPI at the previous much higher levels. However, the steer well clear argument was more powerful at 66p than it is at 10p. The only difference now is that the harsh reality is out in the open. The dividend is gone but it is time now to move on and judge the risk/reward in the context that the market cap is now £10 million GBP rather than 70 million GBP.

[kimboy2] 09/10/2012 18:54

Not many property companies will be value shares if 50% LTV is too much.

[greedfear] 09/10/2012 18:40

Comment: it's an old article.

[scburbs] 05/10/2012 12:18

Kenny, Germany NAV is c. £26m (£46m gross - liabilities 43% of assets) (see note 14) or c. 25p per share.

I had put a 10p target price for buying, but I am not particularly itching to buy at the moment. I will wait to see the MK results due later in the month.

The problem with PSPI's German valuation movements is that they look more like they are being managed down rather than being reflective of what the property market is doing in Germany. This makes them harder to rely on, although they are still at a level where a refi should be achievable (assuming the banks valuers don't wildly disagree!).

[kenny] 05/10/2012 10:10

scrubs, to save me working it out, what is the gross value and related debt of the german care homes? Is it enough to leave a worthwhile sum of net assets, after taking account of the large fees they are paying for ongoing re-structing advice?

[loverat] 04/10/2012 17:56

Yes - the share price still very weak and currently the sentiment here is rock botttom and those who bought reasonable stakes hoping for a bounce now realising it will not materialise - at least in the timescale they anticipated. I think the share price has to go down a bit more to a new low before we see any upside.

[greedfear] 04/10/2012 16:02

Someone even sold @9.07 today. Must be desperate.
It's all low volume but nevertheless constant selling pressure keeps pushing the share price south.

[greedfear] 03/10/2012 19:10

To be honest, it's starting to get a little frustrating. I would add at this level if I could but alas I'm fully invested and other investments I have are behaving likewise (south, south, south).

[loverat] 03/10/2012 16:40

That's the 10p level almost achieved.

That 70,000 sale must have been quite painful for someone.

You would think with no dividend and no indication of when there might be a return of cash to shareholders, that these directors would buy some shares. Considering their aim was to close the gap (from share price 65p to previous NAV £1.30) and seek value for shareholders you have to wonder whether shareholder destruction is now their intention. Buying some shares would at least show some interest and willing.

Anyway I will continue to hold a small amount and might add if there is any turnaround here.

[scburbs] 03/10/2012 08:34

Kenny, I wouldn't allocate any equity value to the US (I am less sure on their unsaleability as I don't have any insight on alternative uses). In my view the only serious debate surrounds the value in Germany (average yield 7.8% - interest cover before central costs would be high on a normal loan). Whether they are set to make an operating profit would also be interesting, although the fixed cost base may mean this is not material. I am not currently a holder.

"The valuation of the investment properties in Germany was conducted by Colliers CRE, UK. Based on both the duration of the leases and the future cash flows and after due consideration of transaction activity in the market, Colliers CRE concluded that capitalisation rates of 7.15% to 9.50% were appropriate under the market conditions prevailing at 30 June 2012 (30 June 2011 - 6.35% to 7.59% and 31 December 2011 - 6.86% to 7.82%), resulting in an average capitalisation rate of 7.81% (30 June 2011 - 6.70% and 31 December 2011 - 7.22%)."

[greedfear] 02/10/2012 16:46

Nursing homes multiples between 11-13 annual rent, top homes yielding 6.5-7.5%

CBRE sees €12.5bn German nursing home investment gap

06 October 2011, 10:20 PM

Germany needs 1,400 additional nursing homes by 2030, corresponding to a €6.4bn investment, while a further €6.1bn is needed for refurbishment of existing homes especially in west Germany, according to realtor CBRE.
By 2030, 1.2m people will live in nursing homes, up 70% on 2009, with the greatest increases in Baden-Württemberg, Bavaria, Lower Saxony and North Rhine-Westphalia. "The rising demand, due to demographic change, massive population migration to economically strong regions and a decreasing willingness to stay mobile on the part of the elderly, poses a considerable challenge for the industry," said CBRE Head of Research Germany Jan Linsin. Despite the overall trend, demand for places will fall in some regions due to migration and skills shortage.
Investment in nursing homes increased in 2010 to total volume of €295m, with most investors being closed or specialised funds. Assets run by creditworthy operators are seen as secure investments due to a stable cash flow. "Nursing home multiples are between 11 and 13 times annual rent," said CBRE's Hartwig von Garrel. "Crucial factors for a maximisation of the multiple are location (federal state and city), condition of the building, occupancy rate as well as the operator's refinancing ability, management experience and reputation. Top assets currently realise 6.5%-7.5% net initial yield. Investment volumes for single assets usually range from €7m-€20m."
Financing these assets in times of equity shortage due to Basel III can be a challenge as banks are currently concentrating on core business and regular customers. "We estimate that there are only half a dozen banks which are financing these products," said Linsin. "Equity demand has risen and will seldom fall below 40% with margins reaching 200 bp. We see a trend towards equity-strong investors, some of which are financing solely with their own resources." pie

[greedfear] 02/10/2012 16:39

German Nursing Homes: yield 6.5-7.5%

By Oliver Suess
maart 21, 2012 8:30 AM EDT
The German unit of Swiss Life Holding AG (SLHN), Switzerland's biggest life insurer, plans to buy more nursing homes in Germany to help boost investment returns.
"We started to buy nursing homes in 2004 and will continue to do so as we are very happy with this asset class," Stephan Illsinger, chief investment officer of Swiss Life's German unit, said in an interview in Munich. "As soon as there's more clarity on capital requirements under Solvency II, I wouldn't have a problem to double our commitments to this area."
Swiss Life's German unit has invested about 100 million euros ($133 million), or 10 percent of its property holdings, in 14 nursing homes in Germany and is focused on non-urban areas near bigger cities. Most of the properties are being managed by BeneVit Holding. The number of nursing homes in Germany has grown to 11,634 in 2009 from 8,859 in 1999, according to statistics by the Federal Ministry of Health.
"We expect returns of about 7 percent from our investments in nursing homes, which exceeds the average return from other conservative asset classes including higher-rated government bonds and residential and commercial real estate," Illsinger said.
About 1,400 care facilities with a capacity of at least 100 beds in an investment volume of 12.5 billion euros need to be built in Germany through 2030 to meet growing demand from patients, according to research by real-estate broker CB Richard Ellis Group Inc.
The investment market for nursing homes in Germany had a volume of about 295 million euros in 2010, with most of it being made by specialized real-estate funds from companies including Axa Investment Managers Germany, RREEF Real Estate and Immac Holding, according to CBRE, which expects initial net yields of 6.5 percent to 7.5 percent for such investments.
"The advantage of direct investments in nursing homes over investments via specialized funds is that we remain in control of the objects and the quality standards," Illsinger said.
Swiss Life, led by Chief Executive Officer Bruno Pfister, said last month it expects market conditions to remain "challenging" after second-half profit declined by 30 percent. The Zurich-based company plans to make more savings after reducing annual costs by 404 million Swiss francs ($444 million) since 2009 and cutting 520 jobs in Switzerland.
Swiss Life's German unit represents about 10 percent of the insurer's annual premium income. Germany is the company's third- biggest market after Switzerland and France. Operating profit in Germany adjusted for major one-time items and currency effects declined 36 percent to 58 million euros last year.
"Going forward, we could also imagine teaming up with other insurers in our investments in nursing homes, but we haven't held talks on that yet," Illsinger said.