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Strudel, thank you for your kind comments. Actually I have a pretty diversified portfolio, but having spent over 40 years at the coal-face in commercial property in the UK, Europe & North America, this is the one business in which I feel really qualified to venture opinions.
You should do well with your housebuilder. The market & the press seem to delight in jumping to negative conclusions over housebuilders, but my attitude is simple; People always need somewhere to live. Incidents like the Brexit Referendum are utterly irrelevant. I loaded up on Persimmon & Berkeley in July of '16, because I liked the managements, & almost doubled my money over the next couple of years. I knew something about both companies having studied them since about 2010 & was awaiting an opportunity when the market mispriced them. it duly happened. In I dived.
The housing market has to come back. Viz. My step-daughter has had a second child. Their accommodation in London is too small. Her man is an experienced accountant and she has years in the film industry, so neither will become unemployed & they need a larger home. Brexit, Covid, Armageddon & the possible second-coming of JC (That's Christ, not Corbyn) doesn't alter their circumstances. They're in the market to buy, at around seven figures, just as soon as the current Covid crisis calms down. And there are hundreds of thousands like her, which means that well-run house builders will go back to making good money. Although this time it might take 3 to 5 years to see top of the market SP's, depending on how Covid turns out long-term.
That's apart from "Sin". My Dad taught me that you'll never go broke with sin, provided whoever is selling the sinners booze, fags & the ability to gamble, is a reasonably competent business manager. Consequently, I opened positions in Flutter, GVC and William Hill last summer because my knowledge of the US suggested that the legalising of online & betting-shop-style gambling, would result in a massive new market over 3 to 5 years, which has hitherto been very profitably run by organised crime. And none of this was priced into the plc's because most people here have no idea how much the Yanks like to gamble on the NFL & NBA. It's possible that that their US operations might one day outweigh their UK businesses.
This punt is also a great example of things coming out of left-field to upset apple-carts. (I love mixing metaphors) No sooner had they all, very quietly, declared great results in February, than Covid trashed the share prices. Now I have no idea which of these three will prove the most successful, because I don't know the nuts & bolts of gambling. But I am prepared to believe that one of the three will hit the jackpot. Meantime Flutter is up 50% and the other two are washing their faces, having been 25% to 33% profitable before CV19. I think there's still an opportunity taking a 5 year view. But, and it's a big BUT, I have been wrong many tim
GeW...A
How well analysed. The after hours RNS, I missed cos I had an appointment with a cooling reservoir after a very hot day trapped indoors at the work's laptop, was the icing on the cake. Hearing the below market sell price was the entire jar of preserved cherries stuck on top.
I have just joined your fan club - unluckily your posting history would imply you are largely interested in commercial property..... This is my only property holding other than one domestic house builder. Both seemingly now LTHs ( that's code for "below my buy price") as, unlike others, I don't need the cash to bail my goolies out from the jaws of the mangle.....
This weekend Samuel Tak Lee has sold his 26% of SHB to Capital & Counties for just £5.40 per share, so providing business schools with a perfect illustration of how to be so keen, as a buyer, on getting a cheap bargain that you end up screwing yourself royally.
This is brilliant company, usually trading at a premium to NAV, with a lock on Carnaby Street and the areas around Chinatown, specialising in restaurants and fast-fashion. with 15 acres of holdings in London W1. It's a one-off. There's nothing else quite like it on the LSE, so control is going to cost anyone a pretty penny and, probably, a substantial premium.
It's not a business that should be too affected by online shopping, but Covid will hit restaurants hard, particularly while they're closed and transitioning back to open, via safe-distancing rules. But will those restaurants ever come back? My bet is that over the next two to three years, they will recover and so will SHB. The West End locations are simply too good to go cold forever.
Meanwhile ST Lee has presumably got his goolies in the mangle with the bankers back in Hong Kong, thanks to his hometown shopping centres being shuttered and rioting locals fighting the heavy-handed Emperor Xi. He has been forced to sell at a 90p discount to the SP. Which is all rather sad, when you think that he could have sold, at a good profit, at over £10 a share in early 2018, and at over £9.50 anytime between mid-17 and mid-18, plus from October '19 to early January this year.
Instead he faffed around with ****eyed tender offers to buy stock at a discount to market prices, niggly little legal actions against the BOD and a stubborn refusal to pay the price required to win control.
Hubris has once again met Nemesis. Bye-bye Mr. Lee, leaving us with the question - Will CapCo now mount an offer for the remaining 74%? Do they have the fire-power now they've sold the Earl's Court site after 40 years of failure to develop it? Are the PI's and institutions willing to sell substantial quantities of stock for less than £10 a share? I remain a long-term holder. This will be very interesting.
For anyone who hasn’t been around Chinatown etc. recently, this is not your usual “high street” shopping - you can literally barely move. This is 24hours buzz - and Shaftesbury remind us that Crossrail is still to come. Also there is supposedly talk of the major Chinese shareholder wanting to gain full control. I am a bit biased here, because their portfolio includes a Chinese restaurant I’ve been going to for over 30 years. I haven’t got any shares yet, but they should definitely be considered strongly - they have a low debt level, and it is priced at 3.2%. Pre Brexit jitters may bring this down further - so maybe a watch, rather than a buy at the moment.
Just returned to this and see it has fallen into interesting territory. Will now watch for a buying dip, perhaps with a £7**?
of London retail and how Brexit will hit. Keeping on sidelines but the quality is there if SP falls too far.
rns today, 'robust trading' and 'high footfall' are buzz phrases I warm to. Continued acquisitions, 260 ml raised for more of the same and, surprise, surprise, a rare but very profitable disposal or two. Rough day on the markets, seems to be holding up ok....whaddya reckon Mr Lee? GL all.
I reckon SHB have a great business model 16 acres of prime(ish) real estate in a massively tourist area, I guess China has a little impact, however we are talking about Central London and it's not just the Chinese who visit. plus with some of their premises not being overly expensive flagship locations, up and coming would be retailers and coffee shops, can come and go, and I don't see any let up of people wanting to start their own business and SHB are well placed to deliver the space, a buy and hold for me sitting nicely in my ISA, plus dividends up every year for the last 5 years. Just my thoughts DYOR
Does anyone have any theories about the fall in share price? Is it connected to a fall-off in the tourist trade, particularly Chinese visitors? I had a prowl round Shaftesbury's areas of operation last Autumn. Carnaby Street impressively transformed from the seedy dump of some years ago, with plenty of people about, and busy shops, cafes and restaurants. Unless I am deluding myself, I think SHB has a good long-term business model, but should be pleased to hear any contradictory evidence.
set of results, £8 is fair value. II's pushed that up v quickly. back to slowly slowly now.
highs hit everyday, no sign of froth or letup in sight. let's see what the market thinks when SHB hit the psychological £8.
why I hang in here; darned Soho blue chip tempts with a tiny profit then drops like a bag of bricks. All singing, dancing rns last week had me dreaming 7 quid and all of London's West End in the bag, but back she goes. 'Interesting' is all I manage at the mo. GL if anyone out there...
Meanwhile, the estimated rental value (ERV) of the group's other schemes amounts to £2.3m, equal to 2.8% of its wholly-owned commercial ERV. The ERV of wholly-owned commercial space available to let amounted to just £2.0m by January 31st (2.4% of the total commercial ERV), of which £1.2m was under offer. "This low level of available space reflects a particularly busy period for enquiries and letting activity since September," the firm said. However, the number of vacant shops is expected to increase in the early months of 2013 but the company said that this was in line with seasonal patterns of activity. At Friday's annual general meeting, John Manser will step down as Chairman (as previously announced) and will be replaced by current Deputy Chairman Jonathan Lane.
Central London-focused FTSE 250 real estate group Shaftesbury said it has seen continuing good demand and letting activity across its West-End villages in the first half, while vacant space is now at an 'exceptionally low level'. In a trading update covering the period between October 1st to date, the firm said that it has "sustained interest from retailers, particularly from Europe and America, seeking shops in our centrally-located villages. Similarly there are many interesting new restaurant concepts seeking space in the West End." Shaftesbury is currently undertaking two major schemes around the Carnaby Street area, just east of Regent Street, which will cost £18m and, when fully let, will produce an additional £2.0m of rental income every year.
Shaftesbury: UBS takes target price from 530p to 580p staying with its neutral rating.
Seymour Pierce maintained its "buy" recommendation on real estate investment trust Shaftesbury (SHB) with a target price of 573p. The broker noted that the refurbishment of the firm's Shaftesbury Estate, with restaurants and new roads, has helped revenues to more than double. Seymour Pierce is impressed with the firm's plans to carry out similar work at its Lazenby House and Fouberts Place sites and sees potential for further revenue growth as a result. The broker is also of the persuasion that the investment spotlight brought about by the Olympics will boost the fundamentals of the company for some time to come
"EPRA diluted net asset value (NAV) per share stood at £4.98 at September 30th 2012, an increase of 35p or 7.6% over the year. The increase before distributions to shareholders amounted to 46.7p or 10.1%." Looking ahead, Chairman John Manser added: "Since the summer the West End has become even busier and we are seeing unusually high levels of interest from retailers, restaurant operators and other businesses seeking to come to our areas. "It is clear that the UK and other western economies will continue to face structural challenges for some considerable time. Uncertainty regarding the timing and pace of recovery is causing subdued business and consumer confidence. However, with its unique status as a leading global city, London attracts businesses, visitors and those who wish to live here from across the world, underwriting the long-term prospects for continuing prosperity in the West End. "I am confident that, with our proven strategy and long experience of this exceptional location, our portfolio will continue to deliver attractive long-term returns for our shareholders."
London property group Shaftesbury has posted a fall in pre-tax profit, largely as a result of a decline in investment property valuation movements, an increase in finance costs, and the change in fair value of derivative financial instruments. As such, pre-tax profit totalled £94.8m, compared to £115.7m the previous year. However, EPRA (European Public Real Estate Association) adjusted pre-tax profit climbed 6.8%, or £2.0m, to £31.2m over the year, on net property income of £71.0m (2011: £66.6m). Like-for-like estimated renetal value (ERV) growth of 6.0% was seen throughout the 12 months, while vacancy levels continued to be low. The final dividend will by 6.05p (2011: 5.75p), giving a total payment of 12.0p per share, compared to 11.25p the previous year. The company said it saw some short-term disruption, particularly to West End visitor numbers, but assured there has been no discernible effect on its business. In a statement the company said: "Our portfolio, which has been valued at £1,828.2m, delivered a capital value return of 5.5%, through a combination of rising current income, growth in ERVs and yield improvement of 14 basis points. This is in contrast to our benchmark, the IPD Monthly Index, which reported a fall in capital values of 3.1%.
Shaftesbury: Exane BNP Paribas downgrades to underperform, target cut from 540p to 520p.
Seymour Pierce reiterated its "buy" recommendation for Shaftesbury (SHB), with a 573p target price. The broker noted that the refurbishment of the firm's Shaftesbury estate with new roads and restaurants has resulted in rent revenues more than doubling. Seymour Pierce added that the group is undertaking similar refurbishments at its Lazenby House and Fouberts Place sites. The broker expects the company to report a net asset value of 489p as at 30th September and believes that the share price premium is justified by its strong business model and consistent performance.
Finance At 30 June 2012 we had drawn £420 million from our £575 million of committed bank facilities, leaving £155 million available for drawing as required. Taking into account the long term interest rate hedging in place on £360 million of this debt, which is fixed at an average rate of 4.87%, the average all-in cost of our bank debt at 30 June 2012 was 5.19%. Including our £61 million 8.5% Debenture stock and our 50% share of the £120 million term loan in the Longmartin joint venture (fixed at a rate of 4.43%), the Group's overall average cost of debt at 30 June 2012 was 5.43%. The marginal cost of new drawings from our unhedged committed facilities remains below 2%. With long term interest rates falling further since 31 March 2012, the non-cash mark-to-market deficit attributable to our interest rate swaps has risen over the quarter by £18.5 million to £123.4 million at 30 June 2012.
Current trading Following the Queen's Diamond Jubilee celebrations in early June, the London 2012 Olympics are now underway. The unprecedented scale and complexity of these major events present substantial challenges in an already busy city. The Olympics in particular will promote London and its many attractions to a global audience. However, in the short term, there is uncertainty regarding the extent of disruption to usual patterns of life and activity, and the impact on visitor numbers and trading in the West End. We are continuing to experience good demand in our locations from businesses which recognise the exceptional and enduring features of the West End and are investing for the long term. Consequently levels of occupancy across our villages remain high and on completion our refurbishments let quickly.
Interim Management Statement For the period 1 April 2012 to 26 July 2012 SHAFTESBURY REPORTS CONTINUING GOOD DEMAND ACROSS ITS WEST END VILLAGES; TWO ADDITIONAL NON-EXECUTIVE DIRECTORS APPOINTED Shaftesbury PLC is a Real Estate Investment Trust, which invests exclusively in London's West End. Our wholly owned portfolio, which extends to 121/2 acres of freeholds, now includes 330 shops and 217 restaurants, bars and cafes, which together account for 71% of its current income. The 410,000 sq. ft. of offices and 403 apartments in the wholly owned portfolio provide 18% and 11% respectively of its current income. In addition, we have a 50% interest in the Longmartin joint venture with The Mercers' Company, which has a long leasehold interest in St Martin's Courtyard in Covent Garden. Extending to 1.9 acres, it includes 23 shops, eight restaurants, 102,000 sq. ft. of offices and 75 apartments.
http://www.investegate.co.uk/Article.aspx?id=201207260700055045I
The firm also announced that Chairman John Manser would retire next year after the company's AGM. He will be succeeded by Jonathan Lane, currently the firm's executive Deputy Chairman.