Taliesin Pty Share Discussion Threads

[edwardt] 12/4/2017 10:08

anyone done any work on potential uplift if portfolio moves totally into realisation mode? I know simplistic but given 40% ltv and difference between 2700sym and 4000sqm as evidenced by small sales, my simple maths gives circa 90% return to equity. obviously not likely to happen over night but does show in this instance why the 11% premium to nav is possibly justified imo.... thoughts welcome. only problem is the chunky performance fee that will knock probably 20% off this but I for one will not begrudge them this if it does happen over the next 3 or 4 years...

[edwardt] 11/4/2017 17:23

indeed. premium to nav is therefore spurious imo.

[jeff h] 11/4/2017 14:00

Thanks dave.

With more residential sales having being made and with more in the pipeline another capital return quite likely I would have thought.

[davebowler] 11/4/2017 09:58

Liberum re Taliesin -see last sentence;
Taliesin Property Fund (Mkt Cap £189m)
25% NAV return underlines strength of Berlin residential market

Event
Taliesin Property Fund's generated a NAV return of 25% in 2016. The key driver of returns was a 16.6% like-for-like portfolio valuation increase in the year.

The average value per sqm of the portfolio is now €2,700 per sqm (20.5% above December 2015). The valuation uplift reflects a combination of tightening yields, rental growth (+4.4% in 2016) and the privatisation potential of the portfolio. The company's first privatisation project completed in the year achieving average prices of €3,750 per sqm. Recent sale prices on the company's second privatisation project were in excess of €4,000 per sqm.

€34m of debt was refinanced during 2016 at significantly lower interest rates and the company expects to refinance a similar level of debt in 2017. The proceeds from the asset sales and debt refinancing enabled a capital return to shareholders of €2 per share.

Taliesin's LTV at 31 December 2016 was 42.2% (2015: 45.9%).

Liberum view
Taliesin's positive results were achieved on the back of a strong portfolio uplift and we believe there is further growth to come in the Berlin residential market. This is supported by market dynamics with new construction unable to keep pace with population growth. Berlin's population has risen by 8% over the past 10 years and is conservatively forecast to rise by another 7.5% by 2030. Completions are approximately 50% of the required 20,000 units pa. Residential values are still below replacement cost (which is rising on the back of increasing land costs).

Taliesin trades on an 11.9% premium to NAV compared to 2.3% for Phoenix Spree Deutschland. Phoenix Spree is our favoured play in this space given the current share rating and the valuation of their respective portfolios. We estimate Phoenix Spree's Berlin assets are valued at c.€2,400 per sqm compared to €2,700 per sqm for Taliesin

[jeff h] 13/1/2017 13:03

All sounds good:-

[davebowler] 12/8/2016 09:35

Liberum;
Positive read-across from Taliesin and Deutsche Wohnen

Event
Taliesin Property Fund and Deutsche Wohnen have both released positive results for the period to June 2016. As a reminder, Taliesin is Phoenix Spree's closest peer and Deutsche Wohnen is a €10bn market cap German residential property company with 73% of its assets in Berlin.

Taliesin's EPRA NAV rose 11.7% to €34.73 per share following a 9.5% increase in its portfolio value in H1 2016 after adjusting for disposals in the period. The portfolio value at 30 June 2016 was €289.2m with an average value per sqm of €2,440 (December 2015: €2,240 per sqm).

Highlights of Deutsche Wohnen's interim results included a 9% increase in EPRA NAV. Other key takeaways include:

The company's Berlin assets rose by 7% on a price per sqm basis to €1,457. The Berlin portfolio is now valued at a 20.3x multiple of in-place rents (4.9% yield) which represents a c.30bps yield shift over the half-year (December 2015: 19.2x or 5.2% yield).
The current value per sqm of the portfolio represents only c.50% of replacement costs which are steadily rising. At current levels of construction cost, the only profitable new developments are in the higher end of the market and for privatisation.
Like-for like rental growth of 4.6% for the Berlin assets in the 12 months to June 2016 which is the best-performing region in the portfolio. Significant upside potential remains with market rents 23% above in-place rents.
Shortage of residential supply expected to continue until shortfall of 170,000 units expected until 2020.
Liberum view
Taliesin and Deutsche Wohnen have reported strong results for H1 2016 with both companies reporting the continuation of a number of positive trends which have been driving the Berlin residential market. Berlin's economy continues to perform well with employment rising by a further 2.7% (double the overall rate in Germany). The majority of portfolios offer huge reversionary potential following a significant increase in market rents as a result of constrained housing supply which is running well below demand levels

We expect Phoenix Spree will also report strong numbers for the period to June 2016 given the quality of its portfolio and there is potential for the company to materially outperform our 10% NAV total return forecast for FY2016. The average carrying value of Phoenix Spree's portfolio at December 2015 was €1,979 per sqm (12% below Taliesin's equivalent figure for the period). We believe Taliesin has reflected more of the portfolio privatisation potential in its valuation than Phoenix Spree.

We believe the Berlin residential market offers one of the most compelling long-term investment propositions in combination with downside protection provided by current values (versus replacement cost). If we conservatively assume a 5% NAV growth rate for Phoenix Spree in H1 2016, the shares would trade on a 4.5% discount to NAV compared to a 1% discount for Taliesin and a 40% premium for the larger German-listed residential companies.

[jeff h] 11/8/2016 15:12

A nice set of Interims and a nice Return of Capital as well.

[davebowler] 20/7/2016 09:58

Liberum;
Taliesin Property Fund
9.5% valuation increase in H1 2016

Event
Taliesin Property Fund has reported a 9.5% increase in its portfolio value for H1 2016 after adjusting for disposals in the period. The portfolio value at 30 June 2016 was €289.2m and the average value per sqm was €2,440 (December 2015: €2,240 per sqm).

Liberum view
Taliesin's Berlin-focused portfolio is benefiting from a number of trends in the residential market which should continue to drive further gains over the medium-term. Residential values are still below replacement cost (which is rising on the back of increasing land costs) and the majority of portfolios offer reversionary potential following a significant increase in market rents as a result of constrained housing supply which is running well below demand levels.

We believe the Berlin residential market offers one of the most compelling long-term investment propositions and our favoured play in this sector is Phoenix Spree Deutschland. The average carrying value of Phoenix Spree's portfolio at December 2015 was €1,979 per sqm (12% below Taliesin's equivalent figure for the period) and we believe the company will comfortably exceed our 10% NAV total return forecast for the year. Furthermore, Phoenix Spree has a more shareholder-friendly fee structure with an 8% performance fee hurdle compared to a hurdle of Euribor plus 1% for Taliesin. Phoenix Spree trades on a 4.0% premium to NAV compared to a 11.8% premium for Taliesin and a 30% premium for the larger German-listed residential companies.

[davebowler] 11/7/2016 10:17

Liberum on PSDL;
Phoenix Spree currently trades in line with NAV which is significantly wider than its closest peer (Taliesin property Fund 11.8% premium to June NAV) and the average for the larger German listed residential companies (26.3% premium). We believe the current share rating represents a compelling opportunity to gain exposure to a portfolio experiencing strong growth dynamics with the outlook for future returns supported by the high level of reversion in the portfolio and favourable demographic drivers.

[davebowler] 29/4/2016 09:47

Liberum-
Phoenix Spree Deutschland (BUY)
Impressive 2015 results

Event
Phoenix Spree generated a NAV total return of 12% in 2015. This growth was underpinned by an 8% (our calculation) like-for-like revaluation uplift in the portfolio with the key drivers of value creation (rental growth, yield shift and asset management initiatives) all contributing to the increase.

The portfolio valuation of €282.8m at 31 December 2015 reflects an increase of 15.3% over the year. After adjusting for acquisitions and disposals, the increase over the year was 10.6%. We estimate a like-for-like revaluation movement of 8.1% for the year after making further adjustments for capex and a total like-for-like revaluation increase of 45% since 2010.


The fully occupied gross yield on the portfolio has tightened by 40bps in 2015 to 5.7% (2014: 6.1%) although this is not strictly like-for-like and part of the yield movement is due to acquisitions. The portfolio value per sqm is now €1,635 (€1,979 in Berlin) which is well below replacement cost.

Like-for-like rental growth of 4.8% was driven by an excellent year for new lettings. New leases were signed at an average 21.2% premium to in-place rents. New lettings achieved an average of €8.9 per sqm (9.8% above 2014’s lettings). Nuremberg and Furth experienced the strongest growth in rent per sqm (+8.9%) followed by Berlin (+6.5%).

In Berlin, the typical value per sqm of apartment blocks lags the price of apartments that have been split up and sold as single apartments. Phoenix Spree launched its first condominium sales project in 2015 to capitalise on this arbitrage opportunity. The first phase completed with 20 units sold generating an aggregate sales value of €4.9m which represented an average value per sqm of €3,912 (compared to the carrying value of the Berlin portfolio of €1,979 per sqm at 31 December 2015).

The balance sheet is in a strong position (net LTV of 42.8% at 31 December 2015) and is well-placed to fund future acquisitions following the £38m placing in early 2016.

Liberum view
Phoenix Spree is currently trading on a 1.3% premium to the December 2015 NAV which is still significantly lower than its closest peer (Taliesin Property Fund 16.4% premium to December NAV) and the average for the larger German listed residential companies (18% premium). Furthermore, the average carrying value of Phoenix Spree's Berlin portfolio of €1,979 per sqm is 12% below Taliesin's carrying value.

We believe the current share rating represents a compelling opportunity to gain exposure to a portfolio experiencing strong growth dynamics with the outlook for future returns supported by the high level of reversion in the portfolio and favourable demographic drivers. This is further underpinned by carrying values which are c.25% below replacement cost. We reiterate our BUY recommendation.

[davebowler] 25/4/2016 11:59

Both TPF and PSDL are at an all time high.

[davebowler] 15/4/2016 13:31

Westhouse-
Taliesin Property Fund results
The Adjusted NAV per share rose 42.9% in 2015 to end the year at €31.44, as at 31
December 2015. As at 31 December 2014 the NAV per share stood at €22, reflecting the
€2 per share return of capital to shareholders during 2015.
The property portfolio is valued at €267.7M, an increase of 27.9% after adjusting for
property disposals and capital expenditure.
This increase in value is a result of general market trends including a continued rise in
rents and better reflects the privatisation potential of the portfolio given the price per
square metre achieved so far for privatised units. TPF’s first privatisation project is
almost completely sold at an average price of €3,750 psqm. The portfolio was valued at
€2,240 psqm, as at 31 December 2015, by Jones Lang LaSalle (JLL).
TPF successfully refinanced maturing senior loans in 2015 at lower interest rates and
higher principal amounts and expects this process to continue in 2016. The Chairman,
Nigel Le Quesne, highlighted that there has been a marked improvement in the real
estate financing market, both in terms of loan-to-value on buildings and to interest costs.
The dramatic decline in the prevailing interest rates has transformed the market for
borrowers such as TPF. As at the end of 2015, approximately 40% of the total sovereign
debt in the Euro area offered negative yields. He expects TPF to continue to return
capital to shareholders via proceeds of privatisation sales and refinancing and also
highlights the attraction of high quality yielding assets, such as the properties of TPF, for
yield hungry buyers.
We believe that TPF continues to offer investors the opportunity to buy a seasoned
portfolio of well selected Berlin properties with considerable further upside potential.

................................................................................
But PSDL still cheaper in NAV terms imho.

[grabster] 30/3/2016 11:38

That ticker referred to as PDSL should be PSDL ?

[davebowler] 30/3/2016 09:55

Liberum on PSDL-
Phoenix Spree Deutschland (BUY)
Positive read-across from Deutsche Wohnen's 2015 results

Event
Deutsche Wohnen's 2015 annual report (December period end) was released on Friday and the strong set of results has a positive read-across for Phoenix Spree. As a reminder, Deutsche Wohnen is an €8.8bn market cap German residential property company with 70% of its assets in Berlin.

Highlights of the results included a 29% increase in EPRA NAV and a 24% EPS rise. Other key takeaways include:

The main contribution to the growth in the year came from the company's Berlin assets. The Berlin portfolio is now valued at a 19.2x multiple of in-place rents (5.2% yield). Interestingly, Deutsche Wohnen also commented that this valuation is supported by portfolio transactions which traded at rent multiples in excess of 20x (sub 5% yield). The company also disposed of a Berlin city-border portfolio of c.900 units for an implied multiple of 23x (c.4.3% yield) in Q4 2015.
The improvement in prices for privatised residential units continued with an 18% uplift achieved on disposals in 2015.
Like-for like rental growth of 4.1% for the Berlin assets during 2015 which is the best-performing region in the portfolio. Significant upside potential remains with market rents 19% above in-place rents. Management have noted limited impact on re-letting rents from the rental cap regulations which have been in place since June 2015.
The current value per sqm of the portfolio represents only c.50% of replacement costs which are steadily rising.
Favourable demographics with a 5% population increase expected in Berlin by 2020 where the occupational market is already tight (1.9% vacancy) and new supply is well below demand.
Guidance for a c.11% NAV uplift and 30% dividend increase in 2016.

Liberum view
Deutsche Wohnen's results demonstrate a number of trends in the German residential market that should continue to benefit Phoenix Spree's portfolio. Phoenix Spree has already delivered a strong valuation update for 2015 (Download our previous comment here) and we expect the company will continue to generate double-digit NAV returns going forward. This is supported by the high level of reversion in the portfolio, market dynamics, favourable demographic drivers and strong balance sheet. We believe PDSL is one of the most attractive investment opportunities across the alternative funds space at the current share rating (5% discount to NAV vs. 24% premium for larger German peers and 15% premium for the company's closes peer Taliesin).

[m.t.glass] 02/3/2016 08:02

Breaking to a new high?

[davebowler] 15/2/2016 14:12

From Jeff H on PSDL thread-
Some interesting bits of info in the prospectus:-

"....one of the Portfolio apartment units in Berlin was renovated for a cost of approximately €33,000 resulting in a rental uplift of approximately €6,000 per annum which represents a return of the refurbishment expenditure in just over five years. Taking into account the value uplift from re-letting, and factoring in the cost of the refurbishment, the Property Advisor estimates that the renovation increased the value of the unit by around €78,000, representing a return on investment of 235 per cent."

...and this about splitting apartment blocks into individual units for sale:-

"In 2015, the Company commenced the sale of units in two partitioned properties in Central Berlin. As at the Latest Practicable Date, 20 out of the 47 units or 1,331 square metres of the total 2,983 square metres acquired had either completed or sale contracts had been exchanged. The average price per square metre achieved for single apartments was €3,912 and for all units (including commercial) the average was €3,643. This compares favourably with the most recent valuation of the Company’s Berlin rental portfolio of €1,863 per square metre, the difference further highlighting the arbitrage possible between a rental and condominium building. In 2016, it is expected that the condominium sale process will begin in at least two further properties in Berlin."

...all very much like the experiences of Taliesin Property Fund (TPF).

[edwardt] 25/1/2016 11:37

maybe or they could recognise this is way ahead of the pack on sales process and development projects and splitting the leases - for me berlin property seems like a good bet - you will marvel at what you can buy for your money out there!

[skyship] 22/1/2016 14:21

A rather strange definition of estimated NAV...Over E.30 could be E.35; could be E.40; could be E.100!!!

"Based on the Company's unaudited management accounts as at 31 December 2015 and the year end property portfolio valuation referred to above, the adjusted NAV per share of the Company is estimated to be in excess of EUR30 per share as at 31 December 2015. This represents an increase of more than 36 per cent. over the adjusted NAV per share of EUR22 (reflecting the EUR2 per share return of capital during 2015) as at 31 December 2014"

DB - yes, the share price looks to be up with events; but perhaps people are confusing the £Sterling denominated share price and the Euro denominated NAV!

[davebowler] 22/1/2016 11:01

This is on a 10% premium to 31 Dec NAV compared to PSDL's small discount.

[jeff h] 15/1/2016 13:41

Yes I hold that as well.

I note David Stevenson mentioning TPF in (I think) Money Week and giving the opinion he would not be surprised if a fund bought it similar to JRIC that I also held.

[davebowler] 15/1/2016 13:23

PSDL's report now out -looks good.

[jeff h] 12/1/2016 22:11

Rising strongly over the last few days...Dec 2015 NAV out soon.