Ground Rents Share Price (GRIO)

Someone bailed this morning. Any news?

The liquidation should result in the sale of £120m of property assets (see Savills valuation), against which there is debt of circa £20m. There should also be cash accumulating from rental income. The current market cap is £40m, which looks a good buy if you are going to get £100m back in the next few years; as long as there are no building remediation horrors. The Annual Report indicates that this risk is reducing.

By my quick calculations a good outcome would see £1 a share returned over next two years. A bad outcome, with some significant remediation issues, would see 80 pence a share returned over the next five years.

Looks like a good bet to me.

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There's also the question about whether leasehold reform will damage premiums for lease extension where the ground rent is deemed to be too large.
That said, I agree that the current price takes a lot of this into account.

GRIO is now trading at about a 33% discount to its adjusted NAV (based on the presumption that GRIO will have to meet all of its remediation costs and won't be able to recover any of its costs from tenants through higher rents over time). One has to wonder whether now is the Darkest Hour and whether it's time to buy again or run for the hills.