Shaftesbury Share Discussion Threads

[nickrl] 21/8/2020 21:58

EI currently we are in the phoney war with HMG largesse propping up at lot of the economy but as furlough runs down and business have to find the cash things could start changing. CEO/FDs will running the ruler over there business plans for 2021 onwards and considering there options. Short term its retail/F&B that are making the running but it will slowly seep into the office/industrial sector imo.

In the medium term i see GPOR back below £5 but short term positive sentiment will keep it buoyed up and wish I had the confidence to buy on the dips across the sector.

[essentialinvestor] 21/8/2020 21:29

konrad, I suppose it's a case of what type of NAV discount allows for this.

You can buy Helical (with 15% Manchester) on a near 40% NAV discount,

that type of level starts to look attractive, although the share price can be volatile.

Hoped Great Portland would be available under £5.50, however unless wider equities

sell off, I'm no longer confident that will happen.

[konradpuss] 21/8/2020 20:32

Essential, I spoke to a 'city solicitor' this morning. He said he will not be ever going permanently back to his office in King William Street.

Now Toby is a very good CEO and Great Portland is mainly 'West End', however I think they should form a residential unit as offices in the City and West End will face some troubled times for the foreseeable future.

[essentialinvestor] 20/8/2020 16:46

GPOR raising debt to increase firepower. Tony is a very sharp CEO.

I'm guessing he spies opportunities presenting themselves over the next 12 months.


They are in a very different position to SHB as London office representatives about 70% of their holdings.

[konradpuss] 16/8/2020 16:09

Essential, I really take my metaphorical hat off to you.

This sector is far too risky for me until there is some solid transactional information in respect of 'the kit'.

O.K. we all know, and I am talking generally that rents will go down in the 'Shaftesbury' type property (not sure about the resi. upper parts mind). I think the interesting thing is yields. You have interest rates at historic lows. Once a 'new world' rent level has been found, I wonder what the market will do in respect of yield/capitalisation rates?

[essentialinvestor] 16/8/2020 16:04

I hoped to build a larger and longer term position in Great Portland
and looked for a move under £5.50, as that has not happened got rid of my
last small purchase on the recent move over £6. Kept it on a watchlist.

That's about all I can add to any sector discussion atm.

[essentialinvestor] 16/8/2020 15:29

A number of my friends work in healthcare and fwiw hospitals
are planning for an infux of UK COVID cases from mid September.

The REITS have offered trading opportunities over the last few weeks,
aided by an increase in volatility. I've traded SLI, SHB, SREI, BREI, BCPT and GPOR.
none of which I now hold. They have been small trades, SLI the latest, which I closed on Friday afternoon was 20,000 shares.

Most people might not have the time, let alone the inclination to trade this sector
and may be looking for longer term investment opportunities.

[konradpuss] 16/8/2020 15:29

I just wonder about central banks. When Keynesian stimulus was used accidentally by the arms manufacture for the second world war in the USA it worked well. As the years have gone on and central banks have generally amassed hugh amounts of debt it has not worked so well.

There will come a point when it will have almost zero effect. I have no idea when that will be, however as it says outside churches 'it's later than you think'!

[nickrl] 16/8/2020 15:14

hindsight im inclined to agree and given rapid response from BoE from outset I would say they haven't exhausted the firepower yet and are biding there time. AIUI they can extend duration on covid financing facilities as well if they wish so theres nothing to stop any company accessing that. Would have thought the more debt you've got the potentially less attractive you are to a suitor so ought to be better option than a RI but maybe im missing something.

[hindsight] 15/8/2020 22:20

7 are already in phase 3 which means using historic failure rates in phase 3 (pos 58%) then 4 will pass. There is also a large number in phase 1 and 2 that on previous pos will add to the 4. Question will be immune response (antibodies and/or tcells), non drift flu is 70% so seems reasonable guess. Other issues will be how long lasts, and risk vs risk , imagine be 50+ first of all. Yes agree excessive debt makes one hero or zero, but ever since Greenspan those taking debt at sensible levels have been bailed out by central banks.

[konradpuss] 15/8/2020 21:27

To make money you need an independent personal view otherwise you are just following the crowd. As Charlie Munger says you are not right because every one else says your right, it's down to the facts.

As to remaining open minded, I am, however I think you need to look at history in respect of vaccines.

[essentialinvestor] 15/8/2020 21:14

konrad, with respect sometimes it's better to remain open minded.

BCPT, which I mentioned here is Up over 10% since.

You are clearly coming at this from a vaccine sceptical perspective,
which is fine,

I'm interested in making money. When it comes to trading/investing I try to leave personal views aside.

[konradpuss] 15/8/2020 21:08

'Putin would only go on public record if confident' - that is like saying EBITDA is an honest reflection of a company's profits!

Please, Putin could not tell the truth to save his life.

[essentialinvestor] 15/8/2020 20:59

Nick, an unprecedented vaccine effort, nothing has even come close
to this global endeavour.
Remember also a lot of the work was previously completed on SARS.
The Russian vaccine looks largely based on their previous Ebola work.

And while I would be highly sceptical of Russia propaganda,
Putin would only go on public record if confident their vaccine was effective.
He risks global ridicule otherwise.

Worth also saying that no vaccine in existence gives 100% protection,
80-85% that would be extraordinary. It's the severe 20% of COVID infections that
are causing the global problem. Mitigate the majority of those and this no longer poses a more
serious threat than pneumonia.

[konradpuss] 15/8/2020 20:25

nickrl, interesting.

Valuers 'blow hot and cold like the wind'.

I think they will start to really hatchet the values as the evidence sinks home that there is no reversion and rental values will drop/are dropping dramatically although there is no real evidence as yet due to the lack of transactions.

Now as to yield, I think this is interesting.

How does a valuer value a prime retail unit in Soho that has gone on to a turnover rent or a retail unit that has a tenant that is solvent who has not paid rent however has taken advantage of the government not allowing court action/ possession proceedings until September.

My view is that if Shaftesbury had no debt every thing would be disappointing but just fine.

It's the debt that will really hurt Shaftesbury.

When you have a 'golden goose' why leverage - that is pure greed.

Debt is the real evil.

Back to the gold standard I say!

[nickrl] 15/8/2020 19:40

As i see it HMG is like a failed poker player in a Casino doubling down on any vaccine thats going in the vein hope one works. Omens aren't good given attempts on other vaccines but its fair to say the world is throwing everything at it so its highly possible.

Personally HMG need two Plan A's and getting confidence back is the key enabler. Its pretty clear that short of confining us all to our houses the virus will spread but whats becoming apparent is majority of people can deal with it, or don't even know they've had it, and the NHS has sufficient capacity. Im not saying its routine but the more the 'new normal' becomes embedded the more confident people should be.

In the case SHB rental income being down at least 50% is now baked in for at least two years and maybe permanently if international tourism doesn't recover beyond 2023. Can they withstand that - im not so sure as valuers will bash down NAV but maybe bankers will continue to waive covenant tests if the interest bill is paid.

[essentialinvestor] 15/8/2020 18:56

Just to clarify, I'm very cautious on markets atm. Mentioned this on other boards.

While convinced SHB will be a cracking recovery play at some point(guessing
that buy point will be in 2021) calling a likely low point is very difficult.

The CapCo IC write up was not exactly comprehensive, although would not necessarily disagree with the recommendation given the backdrop. They have a further £100 Million
on the way from the Earls Court transcation this year. That should provide some extra breathing space, once received.


In terms of a potential SHB fund raising, my own view (as previously mentioned) is they should have raised circa £250-350 Million. Can appreciate they are loathe to do this with the resulting NAV dilution.

[konradpuss] 15/8/2020 16:04

Essential, since General Franco expired Spain has gone down hill rapidly. You cannot beat a good old benevolent dictator, well O.K. perhaps not Saddam. The Euro did not help either. I will not be one of the 18 million.

I will stick to Sweden which seems to be doing rather well with the 'Tegnell' strategy which tempered common sense with science. With Climate Change it will soon have a climate like the South of France as well. Also their economy has been much less affected by the virus due to the no 'lock down' and I believe they did not stop any of the regular diagnosis and medical treatment of the likes of cancer etc. from when Covid 'broke' - unlike the U.K.

I see Cap. Co. got a sell recommendation in the I.C. this week - that might mean they are a buy! Not with my money mind.

[essentialinvestor] 15/8/2020 15:28

18 million Brits visit just Spain every year. A COVID vaccination requirement
for overseas travel will solve take up rates very quickly.


Next set of results for SHB around November time. Will the moritorium still be
in place by then?. It may possibly be tapered. Adds uncertainty to sector investment
until there is clarity on this.

[konradpuss] 15/8/2020 06:29

That is one reason I am glad I am not an employee.

Independence of thought and finance is a wonderful thing. That could have been said by Charlie Munger!

[essentialinvestor] 14/8/2020 22:48

Government aim is to have half a million people in the UK on COVID trials by October.

I volunteered 3 weeks ago for both the Oxford/Astra and Imperial College vaccine
trial, as did my partner. Besides a thank you e-mail from the National Institute for Health Reserch, neither of
us has been contacted. Guessing they have more than ample volunteers already;
so hopeful there is high take up next year.

Authorities can also encourage take up in many way. Vaccination passports for overseas travel etc. As reduced economic activity is both reducing the tax take and
vastly increasing borrowings, authorities will be highly motivated.
I would also expect pressure from the private sector on employees and given
increasing job insecurity...etc.

[konradpuss] 14/8/2020 21:47

Essential, I love an optimist!

Even if they find a vaccine, what percentage of the population will agree to take it?

I am sorry to say the chances of a vaccine in any case are low.

[essentialinvestor] 14/8/2020 21:36

Had a nice result on SLI this week, buying late Wednesday and selling in the afternoon, also XD
yesterday, just a small trade though.

Bought some CLS this morning.


UK government has now acquired approx 300 million does in total of different COVID vaccine
candidates, so hopefully this time 12 months brings a much better outlook.

[konradpuss] 14/8/2020 21:33

Essential, yes Shaftesbury could raise funds, however at what price?

I see that Schroders are letting most staff work from home going forward (at least according to The Guardian).

That does not bode well for companies with City Office exposure.

This will happen with most City and West End office occupiers.

Who wants to be 2 mm's (not 2m) from a person on the tube morning and night?

[nickrl] 13/8/2020 13:37

Konradpuss there was another seller reported on RNS this morning that VELOQX (JERSEY) LIMITED AS TRUSTEE OF THE VELOQX SETTLEMENT have gone from 5.48 to below 3% whether they were traded or placed or don't know but thats c7.5m shares.



Edit: Just realised this is probably Lees sale!!