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At times like this, I'm always reminded of what Buffet says about farms....
If you buy a farm, you don't call the real estate broker up everyday and ask him for a valuation.
I'm sure there's a good chance a large number of us own a property, so just for fun, try it with your local estate agent and see who get's fed up first LOL
Property, last time I checked, unless you are a developer you don't buy it for the short term. ;)
Quite. People often forget that while 1hr expensive delivery slots are available in London, same is not to be said of small towns.
Sitting in waiting for the amazon man for hours on end for essential items is hardly ideal.
Hi Mr Solo, as you know I agree and I'm in the same boat.
Everything tells me that "regionai' and "local" will be the real long term echo of the pandemic and that, alongside the very good management, plays into the hands of holders of NNR. Even the housing market is shouting that people want to live in smaller communities, there's real up swing in the price of property in places with less than 11k inhabitatnts, and it was the community focused retail that first pulled me towards this crowd. It's going to take a very long time for Amazon to offer me an alternative to popping out for a bottle of milk whic gives me an excuse for fish and chips and pint in the pub next door.
Morning All,
My average for NRR is way up there so I'll expect to be underwater for many years. However, I did add a small number at 46p a few weeks ago so feeling better about that.
Retail is a rapidly changing world for sure but bricks and mortar is not dead imo. Firstly, there is growing pressure on the government to (rightly) level the taxation playing field for the non bricks and mortar. Secondly, a lot of jobs depend on retail and there is a valid interest in "saving the high street". Thirdly, there is going to be plenty of re-purposing of retail and office space into e.g. residential. This will put people nearer to the retail. And lastly (for now!) is that NRR seems to have more assets in the affluent centres which are less likely to be affected in downturns. I hope I am right about that!
But the reason I am prepared to stick with NRR really is the track record of management. It's a faith thing I guess and perhaps I shouldn't have any given the share price over the last two years! But I am hoping things aren't as bad as they seem. Get the LTV under control with disposals. Collect as much rent as possible. Reinstate the divi at affordable/ REIT compliant levels!
At 45p 50p 55p 60p 65p 70p 75p etc a lot is discounted, Yes.
Was thinking about the 2 TR1's and the KKR inspired market
rotation into the sector all having created quite a bit of demand
leading to a rise from 43p to 60p. Suppy & demand are the drivers of
price in the market. I am a buyer sub 53p
I can really illustrate this, but I've been buying the debt of Punch (83% of par) & Stonegate (96% of par) - I think Stonegate has declined a little this month, but I don't have a figure - that sort of suggest the debt market isn't so pessimistic. Granted there's Leins and security in it for them, but I think there's slighly different view on the future of pubs, and to some extent the stock market, than news paper headlines would lead you to believe.
If I'm right, the pubs are priced in, in the most pessimistic way.
Hi Edwina, besides the comment on NRR's sales discount - with the ever possible fat tail - I've been reading about the general commercial market over the last few days. I follow Modus (from RiC's) Savilles etc and starting to form the view that sale discounts aren't as bad as expected and the market is starting to move again. AltFi also has some interseting comments the other day from LendInvest (which I also own), so might it be possible when we get a rebound it's going to quite vigerous? If the real economy is discounting by 3% could the stock market discounting at 40% be very wrong indeed.
My apologies, a 50p move is circa 14% valuation movement. Still talking only a 4-5% move in the markets perceived valuation.
Hi Mike, I did say I didn't think I'd be saying it, but I do take a very long term view, so I'd expect to be holding these for at least a decade. But, you are quite right, you should always take advantage of any weakness. I'll leave it to readers discrection if I meant adding "now" or when I see an opportunity again There's always an opportunity. As private investors we should never be in a rush, it's a big advanage we have.
"Rishi Sunak will outline the next stage of the Job Support Scheme to help firms that "may have to close in the coming weeks or months", the Treasury says."
Do you not think Pub closures are priced in now? Bare in mind a 50p jump in share price equates to around a 10% change in valuations. So the move from 45p to 55p is around a 3% change in the perceived valuation of the property portfolio, hardly a big jump by my metrics.
Devon I would have said that a move from 43p to 60p within the space of a couple
of weeks means they are overbought! I am waiting for the pubs to be locked down
and for the current surge to level out before buying more.
You get the feeling this has been very over sold. I'm not complaining, even if it's been a pain, but there appears to be this inherent dislike of all things retail and that offers an opportunity for contrarians. I didn't think I'd be saying this, but I'm considering adding. To this, New Day and the Very Group. It's only rivalled in my attentions by regional commercial property and it's attatched 40% discount to NAV. If NNR's 3% discounts are indicative, and there's no a fat tail of discount pain in their last reach sales, then bargains abound....when have we heard that before! LOL Still it's worth a deep mull.
I would expect / hope a support package for pubs if forced closures.
The good item was 90% of Sept 2019 EBIDTA.. which means despite all the restrictions they are trading reasonably - unlike central london pubs etc who are shut or down 90% on turnover etc.
Update today looks promising; every chance here of a rally back above 60p albeit the pubs being closed again might see the volatility back
They even said reduce LTV in the RNS so we know where the cash is going.
It might be a zero sum game, however if realisable at that level would imply a net cash pile left equivalent of 201p * 95% per share = being 95% of last published NAV = 191p. Who wouldnt take that in a close out?
Not saying it will happen at all.. and clearly pubs at the moment wouldnt fetch 95% of carrying value at the moment. However selling assets at a book loss to clear off the now excessive debts is hardly madness.
Last published LTV is 47% we are expecting a decline in asset value, without sales could easily hit 60%. That really is squeeky bum time.
Asset sales are a zero sum game...yes they reduce LTV but they also reduce net income and by definition dividends...selling those assets at a discount implies a reluctant sale..unless they use the proceeds to buy back 60 million shares...I doubt they will do that .
Not as good as at first sight! Only bought Lisburn in December.Hardly a real arms length deal.Into the JV which New River now has £38m equity in.Disposal figures confusing.They had £30m in June,so Lisburn not included.Possibly in the August £52.5m? If so,they have lost £12m or 40% of the other under offers.This is a transaction engineered to get the gearing down at the 30 Sep reporting date.Their target of £80-£100m is nothing like enough of assets are written down again by even 10%.More big disposals required.
another disposal....increasing cash and at a fair discount. The 100 million raise looks to be on target. not great for those who bought this stock at 250p but 50p is not so bad