Quadrise Share Discussion Threads

[davidosh] 18/10/2011 16:06

Just out of interest...When in 2011 did any of the directors actually buy any shares as opposed to options being granted ? At these depths it is something you would expect to see especially as the Board were paid pretty handsomely. I could only find Adrian Wyatt as a seller of 140k !! Seems very odd to me

[scburbs] 18/10/2011 08:02

Greenwich Peninsula resi development has always had good prospects due to the proximity to Canary Wharf, accessibility to central London and the great location on the Thames bend (meaning two sides have unrestricted river views). However, based on comments from Bellway (below) the last development appears to have performed really strongly (although these price growth numbers do not represent like for like). Clearly QED do need to get on with this and take advantage of the strong market, particularly whilst their are significant off plan buyers around - be they far eastern or peripheral Europeans seeking a safe haven (as these buyers materially reduce cost/risk and accelerate recirculation of capital). It would be interesting to know how much profit they made out of the deal with Bellway and how the risk/reward was split.

"The Thames Gateway division, following the completion of some high rise apartment blocks in the east end of London and Greenwich Peninsula, has seen average selling prices increase since last year by almost 40% to £212,694. Developments such as these benefit from a more diverse marketing strategy with buyers from the Far East, in particular, being prepared to buy off-plan at an early stage in the construction process."

[horndean eagle] 17/10/2011 15:00

Aberdare - Laxey may have been mopping up stock sub 40p to start with but they went a bit nuts when it was closer to 60p. They will be heavily underwater.

scburbs - They have been quite poor at pushing Greenwich onwards. There was very strong demand there. I think Bellway had one of the plots and they had to pay QED an overage payment of £1m I think. They should really have been cracking on with those sales when market conditions were quite buoyant. The fact that they never sums up QED appalling record on timing the market.

[aberdare] 17/10/2011 11:39

Horndean Forgive me if i am wrong Laxey did not start buying until the price was 36 pence when it went down from the last dip so they are not looking at to much loss. I still think we will see at least double this price maybe not to far in the future lets hope.

rgds

[scburbs] 17/10/2011 11:24

Not sure that comparison is particularly relevant! The main exposure has been commercial property and development land values. The key questions are the quality of what they have now (assets/development plans and management team), the robustness of the asset values (and their sensitivity to delays) and the flexibility of the capital structure to deliver the planned development.

Personally I have been waiting for the Wembley LDO JV to help support the overall Wembley book value. However, it does seem to have been rather slow coming. The promised faster progress on Greenwich residential would also be good to see.

Overall the strategy has seemed sensible (other than buying AuM in non-core skill areas and the sale of Corsham St) and both Wembley and Greenwich have coherent next steps, but they need to start delivering on them.

[horndean eagle] 17/10/2011 10:03

Laxey like many of us here I imagine looking incredibly stupid for having invested in QED. Was looking at QED chart over the last 10 years. The shares have fallen 50%. When you consider how London house prices have performed over that period it is quite shocking. Just buying a dockland flat would probably have returned over 250% during that time. It really is a case of sheer incompetence and greed on behalf of the management. Would be happy for a mercy killing here.

[red army] 17/10/2011 09:08

Are we saying that Laxey are incredibly stupid for buying over 13% of the company??????

[scburbs] 17/10/2011 08:43

Although with such a clear supply/demand imbalance in London I was discussing some potential projects with my friend Everyman and he certainly would consider a JV together with his dog.

If everyone has the same idea at once (Wembley has its student piece, Greenwich has Ravensbourne etc.) then the imbalance may correct more quickly than expected, dampening rental growth prospects on existing stock.

[scburbs] 17/10/2011 08:19

Fireplace, sorry not seen anything recently on the Lancasters.

Davidosh, Corsham St was a 600+ bed student accommodation forward funding deal that QED paid an initial £15m with a further c.£85m due this year/next year.

They increased the value in their books to £49.5m and then sold for £15m (50% sale to iQ - there is a potential overage if site performs well)! This was essentially a distressed sale as they would have been struggling to fund £85m themselves. The value of London student accommodation has if anything gone up since the £49.5m valuation as rental growth is strong (this is presumably really a value of c.£134.5m on the completed building plus any NPV adjustments). I wonder if it would have been more profitable to complete Corsham St on their own and then sell rather than invest a similar amount of capital in Dashwood and Albermarle, the latter is a particularly odd deal looking like a purchase of AuM which QED should not be doing IMV.

Here is what Unite said recently on the profitability of London student accommodation developments. QED may be in the right market, but giving up 50% of a major scheme at cost (albeit with a small potential overage) isn't great. This means the NAV accretion and other benefits that Unite refers to in August (see below) will not be fully realised by QED, although at least they will be realised by the 50% owned iQ, the main beneficiary being Welcome Trust (the 50% partner in iQ). However, the iQ fund should be a strong performer given its high London weighting.

"Reservations for the forthcoming academic year are very strong and we are on track to deliver our target development pipeline of 4,000 beds in London over the next couple of years, which will be significantly accretive to both earnings and NAV.

...

London focus: London continues to have a significant supply shortfall that will persist well beyond the current pipeline of projects currently in development. As the largest and most experienced operator, UNITE is ideally placed to deliver continued growth in the capital.

...

The London market continues to benefit from a huge supply/demand imbalance, with universities providing only 20,000 beds for a total of 280,000 students. Private companies currently provide approximately 25,000 student beds in addition, with a development pipeline of a further 13,000 new beds likely to be completed by 2014. Even with the additional beds in this pipeline, the level of supply in London will still be roughly half of the rest of the UK with 2.8 students per available bed space compared to 1.5 per bed space across the remainder of the country.

Demand for university places in London continues to grow, particularly from overseas, with no material impact from more stringent immigration controls and international students still attracted by the reputation of London itself and its high-profile universities. These students will feel no impact from the policy announcements in the White Paper and most of the universities with whom UNITE works are forecasting continued increases in international student numbers.

...

Transaction activity in the student accommodation sector has continued to increase steadily throughout 2011 with yields proving stable in the provinces and showing signs of compression in London, where investor demand is strongest. Much of the demand appears to be driven by increasing awareness of the positive rental growth profile of the sector, which compares favourably to many other real estate classes.

...

Looking forward, we expect yields in London to show signs of modest compression, driven by strong investor demand, limited investment stock and clear rental growth prospects."

[davidosh] 14/10/2011 10:52

The London student accommodation market has remained very strong throughout (with robust demand from overseas students and a significant supply shortage), with the sole exception of the day that QED sold 50% of Corsham St!

scburbs....Can you just remind me what happened at Corsham St ? I have lost my notes on that one.

Incidentally this is what JP Morgan Chase had to say about yesterdays deal. (The £3m profit figure they suggest means that the book value at end March must have been uplifted by about £1.5m from the Feb purchase price. If true a £3m profit is pretty impressive over just 8 months especially if it includes the cost of funding.)


'Quintain sells £34m London student accommodation unit. Quintain announced the sale of student accommodation unit Dashwood House at Elephant & Castle for £34m. The sale was made ahead of the Mar-11 site value of £14.7m plus subsequent construction capex of £17.8m (total £32.5m). Quintain made around £3m in profit on the project over the past 12m, and chose to sell now because the asset is 100% let, so with limited further value to add, and in current markets, Quintain thought it better to repatriate the cash and pay down debt - and we agree.'

[fireplace22] 14/10/2011 10:24

scurbs, You seem to have an ear to the ground re property companies, do you have any idea how the Northacre Lancasters build / sales are progressing? TIA.

[scburbs] 14/10/2011 10:18

Rockspring on the buy side. London market still looks strong for iQ (who I thought would be the likely buyer of Dashwood, but probably safer for QED's balance sheet to 100% realise in the current climate). The London student accommodation market has remained very strong throughout (with robust demand from overseas students and a significant supply shortage), with the sole exception of the day that QED sold 50% of Corsham St!

"Rockspring Property Investment Managers has announced the acquisition of Dashwood Studios, a significant student accommodation scheme recently completed by Quintain Estates and Development plc, on behalf of a pension fund client.

...

Robert Gilchrist, Chief Executive of Rockspring, commented: "While the demand for high quality student accommodation is steadily increasing, the availability of high-quality purpose built student accommodation in London remains extremely low. In addition, the highly cash generative nature of the asset class is increasingly compelling to investors seeking the potential for long-term capital and income growth."

Source: FTI Consulting/

[napoleon 14th] 13/10/2011 08:46

Fair dinkum imo.
Didn't sustain a B/O @ 40p tho'......

[skyship] 13/10/2011 08:41

For chart views on QED see Post Nos 15317 & 15320 on the £1 thread:

[cockneyrebel] 13/10/2011 08:26

4.4% in 6 months that is redartbmud, 8% per annum and among the costs will be staff fees. They've kept people in work too more than might have happened in this climate.

CR

[horndean eagle] 13/10/2011 08:24

QED do have a pretty disastrous record in actually creating shareholder value. You do wonder why they actually take on new projects. They should really just get on with making disposals at Greenwich and Wembley to try and instil a little more confidence in the NAV. It amazes me how they haven't made more progress at Wembley by selling it on the coat tails of the stadium. Im sure bunging in a few ticketing perks down the road would have generated a lot of interest from Far East buyers.

[skyship] 13/10/2011 08:14

red - looks to me to be £1.5m in excess of 31st Mar'11 valuation. Total profit depends upon original acquisition cost; but it is the position relative to the last valuation that is more important.

[scburbs] 13/10/2011 08:13

Dashwood Studios has always been flying below the radar a little with QED not announcing the acquisition in Feb 2011, albeit it appears in the accounts descriptions from the March 2011 results. Has anyone seen any disclosure as to how much they actual paid?

Nonetheless for a company trading at such a large discount exiting at a 4.6% premium to book plus construction spend is a great result on an asset they didn't hold for very long. I suspect this was a distressed acquisition (i.e. vendor couldn't fund the development), so hopefully QED actually made a bigger cash profit (i.e. they may have written it up between February and March as a development project with funding secured is more valuable than one without). Unfortunately the acquisition cost does not seem to have been disclosed anywhere so difficult to know for sure.

[fireplace22] 13/10/2011 08:13

My take on it is that we're currently valued at half of NAV so a sale at close to NAV is good relative to the current share price

[redartbmud] 13/10/2011 08:07

Sorry, I find the statement confusing. Have they only made £1.5 millions on £34 millions expenditure or is it something different? That is 4.4% if true.

[tom111] 13/10/2011 07:34

Must be worth 3p on the share price this morning at least breaking out from 40p where weve been for ever

[skyship] 13/10/2011 07:28

Good disposal news - see Header. Cash influx a useful step in the degearing programme:

13 October 2011

Quintain Realises GBP34m from Student Accommodation Asset

Quintain announces the disposal of its recently completed student accommodation scheme, Dashwood Studios, to a discretionary single client account of Rockspring Property Investment Managers.

The sale price of GBP34m compares with the 31 March 2011 site valuation of GBP14.7m and subsequent construction expenditure of GBP17.8m.

[owenski] 12/10/2011 16:35

I take it as a good sign that Std life are dumping, they normally offload at the bottom and buy at the top.

Probably needs the catalyst of the next trading update to move these imo.

[targatarga] 12/10/2011 16:27

feels like were trapped indefinately at 40p. imho

[skyship] 12/10/2011 10:20

This 39p/40p level looks to be an important pivotal point for QED, so if Laxey continue to hoover up Standard Life stock and Taube don't turn into the next tap, then we could see a sharp rise back to the 47p/50p level once we break through that falling 15day SMA.