Shaftesbury Share Discussion Threads

[nickrl] 05/2/2021 21:22

EI i'll have a spread bet if it gets to 600p its getting ahead of itself imv.

[essentialinvestor] 05/2/2021 15:04

Ouch!- should have gone with my gut call on this, profit missed, never mind.

Hopefully other opportunities in the future.

[homarus] 05/2/2021 15:01

Level of immigration interest from Hong Kong will help the Chinatown portfolio

[its the oxman] 05/2/2021 14:27

What's up. Rally on hopes the shoppers will return soon?

[hindsight] 05/2/2021 08:53

konradpuss, thank you for the reply. I like the fact that last valuation Dec 2020 puts them on a 38% discount with a low 22% LTV. They have some income so can pay small divis, at least beat bank account (Edit 10 year gilts are 0.3%). Personally would top slice some SHB @ 600p and put into BCPT. As I understand it standard rent free use to be 6 months ? so its 18 months more but if that gets quality corporates for 13 years then it makes them attractive long term Ps Agree on London Mayor, London needs half full, rather than half empty glass leader going forward

[nickrl] 04/2/2021 22:02

Im no fan of Khan but his hand has been forced over congestion charging by UK govt. Like you my view is SHB on fundamentals is overvalued but it has the prop of CAPC either taking it out or a merger of equals. In the meantime it has enough cash to keep it going so its basically a punt on normality returning.

[essentialinvestor] 04/2/2021 20:35

konrad, appreciate the view as always.

[konradpuss] 04/2/2021 20:14

Essential, I would do this. If you think things will recover to rents previously paid by Shaftesbury tenants prior to Covid in say three years then buy the shares.

I am firmly of a belief that things are not going back to the way they were.

More people home working and the suburbs becoming sort of hub centres.

Also look what this terrible Major of London is doing - congestion charge seven days a week etc. etc.

There will be a price to buy Shaftesbury at and currently I think that is well below where they trade today.

[konradpuss] 04/2/2021 20:06

hindsight, they own quite a bit of retail and offices. Not bad locations, infact some prime kit. As I told Essential previously, the stand out is their Winchester student block. Stand out meaning it will not be valued down by much.

O.K. they are trading at a 30% discount to NAV, however that might well end up being justified due to the fall in values.

I am told some big office occupiers are getting two years rent free for signing a fifteen year lease currently.

[essentialinvestor] 04/2/2021 18:53

Getting bery tempted here as a 3 year recovery play.

[hindsight] 04/2/2021 10:41

Nickrl, Konradpuss, EI and others here, do you have any view on BCPT ? thank you in advance

[nickrl] 03/2/2021 22:10

hindsight id say there key assumptions aren't far from how its turning out not bad prescience by whoever wrote it. Where it may fall short is whether this Autumn we find ourselves back in a more restricted environment again and constraints on international travel will be with us for years. Yes the rest of the world will get vaccinated in due course but the amount of capacity that's been ripped out of aviation will both drive up prices for travel as well as reducing volume for many years.

[hindsight] 03/2/2021 15:12

Seems we all agree on the long term, just need to get across the valley of death

Below is what they were working on from the rights issue document

12.2 Reasonable worst case assumptions relating to the Covid-19 pandemic
In preparing its reasonable worst case scenario, the Company has made assumptions regarding the need for more severe Covid-19 containment measures adversely affecting footfall and trading in the West End, occupancy in the Group’s property portfolio and a slower recovery than assumed in the Company’s base case scenario. The reasonable worst case therefore includes certain Covid-19 related sensitivities, as set out in the following key assumptions:
• continuing Government social distancing measures with a gradual return of West End footfall and improvement in trading conditions from July 2021;
• a decline in total rent collection to 25% of contracted rent from 1 October 2020 to 30 June 2021, rising to 35% and 45% in the quarters ending 30 September 2021 and 31 December 2021 respectively;
• EPRA vacancy at 20% of ERV throughout the period from 1 October 2020 to 31 December 2021;
• an increase in irrecoverable property costs of £4.0 million for the period from 1 October 2020 to 30 September 2021;
• ERV decline (on all new letting events) in the year ending 30 September 2021 of 20%, with a
further decline of 10% in the year ending on 30 September 2022; and
• a decrease in the valuation of the Group’s wholly-owned portfolio and the Longmartin Joint Venture properties of 25% from 15 September 2020 to the end of the 12 month period following the date of this document.

[konradpuss] 03/2/2021 10:00

Essential, working in the industry is probably a disadvantage!

What really worries me is 'the cost of reopening' some of these businesses Shaftesbury have as tenants.

Many will not re-open. Then there will be more vacant units.

In the long run I am optimistic of their portfolio, you just have to get to the long run.

I do think rents will go down by 40% in respect of the retail/A3/A4/A5/office content of their portfolio. That, if I am right will lead to another cash call.

[essentialinvestor] 03/2/2021 09:38

I pictured a 3/4 year recovery here and not seen anything to change
that view, that can change obvs!.

Looking for NAV to trough around Q2/3 this year - but that is very much a guessestimate and only if SHB do Not require another equity raise.


konrad works in the industry, I dont, it should be said.

[hindsight] 03/2/2021 09:00

Hospitalisations are an accurate reflection of infections but are historic, think what matters is how well vaccines work on various covid and what happens when covid hits the vaccine wall, then what if any natural selection mutation comes out. From Oxford data seems uk will be able to open up but not to international travel

[nickrl] 03/2/2021 00:04

Dartboard I called hospitalisations wrong by a week but was looking at UK wide it looks like your using England numbers. Actually since I penned that things have mode down at pace (to use a favourite govt phrase!)and its possible we may see things improving earlier in Spring than expected albeit its all very fluid.

[dartboard1] 02/2/2021 14:00

Nickrl, where are you getting your data from? I see a peak in hospitalisation around mid Jan and a drop off since. Daily Admissions to hospital 12 Jan 4,134. And 30 Jan 2,193. Total beds occupied by a covid patient 18 Jan 34,336. 1 Feb 28,539. Not nitpicking, just want to get the story out that it's turning a corner. Agree that international travel will take longer to recover, but not sure London will be the destination of choice for staycations... still, this is one to hold for two years I believe

[boonkoh] 02/2/2021 13:06

Capital & Co just released new NAV, took a 13% hit from NAV value from mid 2020.Read across to Shaftesbury.

[nickrl] 20/1/2021 11:17

EI hospitalisation rates is clearly driving govt policy here and imv that won't reach a peak for a few more weeks. Even then govt will want a significant reduction to rebuild a buffer before it relaxes much. They are also clearly running a strategy to at least minimise the possibility of imported mutations now and much of the Western world is in the same space. So I see international tourism being significantly reduced in 21 and SHB are leveraged to that footfall driving there tenants income and thus SHB NRI. There is the potential that there will be substitution from staycations and day visitors but that needs the current rules being relaxed back to at least as they were last summer. I believe this will happen in part from current measures and vaccinations but more so from natural suppression of the respiratory. With SHB leveraging themselves to t/o rents they aint going to have a good 2021 so your buying into the future here. They have the cash in hand to get through this now and of course there remains the possibility of CAPCC launching a bid or more sensibly trying for a merger but share price will tread water at current levels.

[essentialinvestor] 20/1/2021 10:44

It's a valid point.

My better half had the Pfizer vaccine yesterday,
in group one due to occupation. I'm in group 6.

A significant step forward would be vaccination mitigating the
more serious cases, those that require hospitalisation.
And also hopefully significantly preventing long COVID -
Made the same point previously elsewhere.

[hindsight] 20/1/2021 10:29

EI, you appear to be a man of few words
Looking forward, am wondering how uk will try to stop vaccine shift mutations entering, thats if not home grown and its effect on travel.

[nickrl] 06/1/2021 21:33

Konradpuss plenty as turnover rents are Bickells new strategy to justify his pay cheque. He was quoted as saying the traditional leasing model is broken I would also suggest the way he is remunerated is as well his salary is linked back to company profitability at basic salary level as well.

Should get a trading update later this month and may have a stab at a spread bet nearer the time if it still at current levels as it clearly buoyed up by vaccine momentum currently.

[konradpuss] 06/1/2021 19:31

I was just pondering how many new leases to extisting tenants have been put in place with 'turn over' rents?

I wonder if the CEO has considered giving up his big fat salary this year. Not a chance.