Sdic Power Discussion Threads

[scburbs] 30/3/2010 09:46

It isn't my view, I am merely utilising the commentary of Conwert and others.

"conwert expects an ongoing stable development for the residential property
markets in Austria and Germany in the year 2010. Due to low level of new
construction with strong demand for residential space, especially in good
locations, prices and rents are expected to continue to increase. In addition,
demand for high-quality residential properties as inflation-safe investments
remains high."

[scburbs] 30/3/2010 09:44

Is it? Statements like "No more boom and bust" being made at a time of high growth. That is my idea of a contradiction in terms!

Robust (meaning sustainable/long term) slow and steady growth makes German residential property the Ronseal of the property world. The underlying fundamentals (i.e. low interest rates) mean this can be achieved without a shift to ownership (a shift to ownership would create a boom market not slow and steady growth). By ownership I mean owner occupier not investor.

[lagosboy] 30/3/2010 09:39

schrubs

robust slow growth is a contradiction in terms.

This market has remained static for the last 17 years, there are no signs of the German populus moving away in droves from renters to owners.

I think SDIC suffers from company specific issues such as owning a lot of poor quality run down properties in comparison to its peers & poor management team.

As they say, you can only paper over the cracks for so long.

The lack of any bid interest despite the huge discount to NAV would seem to support this.

[scburbs] 30/3/2010 09:39

Some appropriate seasoning might be a necessary to accompany this fact, but assuming they aren't being to cheeky with the definition of available it does show significant progress on underlying vacancy.

"On an available basis, vacancy was 7.7% as at 30 June 2009."

"On an available basis, the Company's vacancy rate was 5.6% as at 31 December 2009."

[scburbs] 30/3/2010 09:36

Of the €22.46m sales, the average profit over the June 2009 valuation is 6.75% illustrating the fact that a wider disposal programme is a good idea.

[scburbs] 30/3/2010 09:31

The longer interest rates remain low the more German savers will buy German property. The world is unlikely to be able to persuade them that they should spend rather than save. However, when they can only get 1% or so in the bank the attractions of an unleveraged 6.5% from residential property starts to look very significant.

Market fundamentals look very strong (this doesn't mean boom, it means robust slow growth) and this could be the NAV floor for SDIC (fiduciary duty breaching discounted recap excepted).

[alunmorris] 30/3/2010 08:35

"Expansion of dedicated property management function, by GOAL service GmbH, giving greater control and better results"

So after a disastrous investment performance GOAL offer something else to make our money back. Is GOAL some kind of boiler room?

[scburbs] 30/3/2010 08:24

Kibes,

I think Northern Rock had rather more problems with their massive short term money market borrowings than their long term securitisations.

For SDIC the securitised debt is fine, the problem is the amortising debt that isn't securitised. For this reason they need to kick on with the disposal programme.

[scburbs] 30/3/2010 08:19

A solid set of results which are broadly in line with what might have been expected prior to the recent trashing of the share price. They appear to be slightly underperforming against their peers, but not sufficiently to account for the yawning valuation gap.

Internatising the manager on a share for share basis (with the discount on the manager reflecting the discount on the shares, i.e. issuing the shares at effect at NAV) would make sense. The disposal programme needs to increase regardless of the swap position.

The idea of a recap is crazy until they show progress on valuations (illustrating value of refurb), rental increases and vacancy falls (or in other words until the share price re-rates).

[kibes] 30/3/2010 08:15

Yes I don't like the hint about recapitalising either. And I don't like the fact that the debts are all held in SPVs and have been securitised. An inability to roll over securitised debt was what brought down Northern Rock and market interest in taking on that kind of debt is practically nil I believe. Glad I am out of this.

[kibes] 30/3/2010 02:33

I am now out of this at 0.17 euro. Don't like the smell of it and want to book the tax loss this year to offset gains elsewhere. Will watch and maybe buy in again if there is any indication of anybody actually in control of what is going on.

[lagosboy] 29/3/2010 14:54

Kibes

Horrible, I hate it when the MM's drop the bid over 20%, like today, it is usually to fill a large order, so again the small guy gets killed by the big guy's.

The MM's, of course are meant to have an order or good reason to to do this, price manipultion to profit their own account is not allowed....hmmmmm

[scburbs] 29/3/2010 13:51

Conwert Immobilien also released results last week. They also have a very high vacancy rate that is now falling sharply and they are cutting costs. Strong like for like rental income growth (3%) is being reported. Valuations across the year were broadly flat. Expectations for 2010 are for growing rents and prices. All in all a very positive set of results.

I continue to get the feeling that either SDIC will prove to be massively undervalued or the level of competence of their management is ..... All factors seem to be on their side, stable market with slowly increasing prices, rising rents and falling vacancies. For a company on such a distressed valuation the fundamentals of its market look great, so either the valuation is wrong or there is some other problem (i.e. poor management or too expensive management). I am still hoping that the valuation is wrong!

"At the same time, vacancies were reduced from 20% in the previous year to 17%."

"Moreover, vacancies will be reduced further (from 16.9% to 11% - 12%) through the constant development of the property portfolio, new high-quality residential space will be created and average rents will be raised."

"The cost/revenue relation was reduced from 16% in the previous year to less than 12%."

"The organic growth of rental income is also documented by a 3% increase on the basis of an unchanged property portfolio (like-for-like)."

"conwert expects an ongoing stable development for the residential property
markets in Austria and Germany in the year 2010. Due to low level of new
construction with strong demand for residential space, especially in good
locations, prices and rents are expected to continue to increase. In addition,
demand for high-quality residential properties as inflation-safe investments
remains high."

"The revaluation result turned from a slightly negative result (EUR -
2.3 million in 2008) into a positive one in 2009 (EUR 1.6 million)."

[kibes] 29/3/2010 12:13

lagosboy - I just have the shares, not a leveraged position. I did once have a small spreadbet on this but it was an absolute killer, the spread went to something like 0.1/0.3 and I was knocked out. Fortunately the spreadbet company agreed it was unfair and reinstated my position, however it is extremely risky to trade very illiquid shares like this on margin. As you say the MMs work together to wipe out small punters, guaranteed stop losses will generally turn out to be guaranteed losses!

[lagosboy] 29/3/2010 12:02

Agreed kibes, but if you have stops in place and insufficient margin you have little choice & that is what the MM's play on.

They get a large order and then pull the bid to try and fill it.

Everything works against the small punter trading on leverage, best suited to vanilla buying.

[kibes] 29/3/2010 11:56

scburbs - no I am looking for at least 0.17 euro but have held on for the moment. Never a good idea to sell when the spread is so large.

[rightnice] 29/3/2010 09:32

What a spread. MMs trying to trigger those stop lossess ahead of the results.

[scburbs] 29/3/2010 09:29

Website financial calender has been updated and results are now scheduled for 1 April (still an approximate date).

[lagosboy] 29/3/2010 08:58

Morning all, lovely start to the week.....looks as though I was a bit too eager, perhaps sub 10 cents was more on the mark.

Getting the feeling though that something is going to come to a head here, I would look for mangement changes.

[scburbs] 29/3/2010 08:51

Morning Kibes, Did you sell at 13c?

[davidosh] 28/3/2010 18:35

I ran a very large property management company in London for several years and we never had more than 5% of our stock vacant at any given time except for heavy turnover points such as late June when students vacated or just after Christmas when most relationship break ups seem to occur. Germany is a mature market and the average rental period must be far longer than in the UK where many buy a property after a couple of years renting.

All things taken into account I am staggered at the vacancy levels at SDIC and it suggests something is not right ie. property in wrong locations or poor quality or bad marketing/management of stock.

If Deutsche-Wohnen can get vacancy levels down to low single digits what has prevented SDIC doing the same ?

I have tried eleven times to get to speak to Nigel Caine at Speymill to ask this and a number of other questions about the business model but he hides under his desk every time my name is given to him by the numerous young ladies he has working in his office. Not very satisfactory communication with shareholders but then again he is employed by Speymill Group so he probably feels he does not need to return calls or ever take one from a SDIC holder.

Just for the record I am not interested in the current financial information but merely the past information which is in the public domain so he cannot claim it is a closed period and so does not talk to anyone.

Personally the current set up is not satisfactory in my view and it is the major holders that need to look at it and act without delay. The results and banking issues will only be the start.

[scburbs] 28/3/2010 15:50

Deutsche Wohnen results out on Friday. Strong rental growth (3.1% portfolio, 4.4% Berlin) and vacancy falling sharply (down to 4.15%).

[lagosboy] 27/3/2010 12:19

PP

All confused-your response to Winfjammer

'SDIC is the better option IMO, as a (very) long term investment (I'm in this as an alternative to direct purchase of German property, hence am taking a 10 yr+ investing view with SDIC shares).'

followed up by

I'm not inclined to trust this lot at the moment, based on their lamentable track record, inappropriate egos, & excessive fees.

You are truly the most self seving, condescending (sounds a bit hysterical, but you're entitled to your view- sure Kibes will be very grateful for your confirmation that he is entitled to a view)and vulgar poster that I have ever come across.

Clearly the combination of er indoors, the booze and your own ego has made you delusional.


May I suggest that you start a new thread for the latest PP Action & Mellon Hate Group and let us now when you have sorted things out... or is Mr Mellon meant to be doing that?