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Strictly, I fervently hope that LSE continue to offer the share chat sites, but nothing is forever. It reminds me of a couple of years ago when Motley Fool closed down their very popular chat sites, which led directly to the establishment of the lemon.fool.co.uk site, to which many of the Motley Fool contributors migrated. I use it because it has a very useful and active site for VCT investors. The quality of the contributions is on a par with the TEF Share Chat. It is pretty easy to register (free) and to set up specific boards. Whilst there are property boards already established on lemon fool, there is nothing that close to this Share Chat board so far as I am aware. Just a thought if ever the day comes.
Sain, adding to your theme on new entrants/JVs, I assume you picked up on the announcement one week ago that Starwood Capital and LendLease have taken on the proposed Silvertown Quays development - co-investing, but I guess that Starwood are primarily in this huge mixed use scheme for the PRS/affordable housing element? A lot has happened since the excellent overview of the sector that Hardman & Co published last year. I hope that they soon issue an update - and I hope even more that they will be able to include further activity by TEF! Not that long until the TEF AGM...
Strictly, I have tried to join your site a couple of times over the last year or so, but without success. Maybe that is because I am not an LSE premium member. I do invest significantly in property companies - and TEF in particular. My e-mail address is napa200667@yahoo.com. Regards.
TEF have been fairly quiet over the last year on BTR, whilst others continue to pile into this sector - e.g. BKG and possible Fizzy Living link-up, Greystar and Henderson JV in Croydon, WJG and recent M&G deal - to name but a few. Patience is a virtue and the pricing and timing needs to be right, but TEF has been talking about a major JV deal for over two years, so you would expect something to come to fruition fairly soon. An excellent company, but I still worry at the edges about the cash drag of the LBTH investments. Hard work.
Excellent results, with no unpleasant surprises. I added again, albeit slightly later in the day than ideal. I know of very few companies on any sector that deliver with this level of consistency and transparency. We only see the tip of the iceberg rather than the underlying levels of activity. Some heavy hints given that further major deals will be announced. I was particularly comforted by the comments concerning Greystar, where I wondered if things were getting rather tough. So, justLBTH to sort out. Not easy. The deals in that neck of the woods have clearly been a drag on performance this year. I would guess that TEF will prioritise other more friendly authorities when investing in future opportunities, although they have a lot of money and resource tied up in LBTH developments which they have to unlock.
Just announced that John Biggs has been elected. Probably positive news for TEF.
I think that this Octopus product is well below the radar for TEF, but positive in principle for the much smaller builders. Separately, I saw that the Octopus fund upped its holding in TEF yesterday. More generally, I guess that we are all on our prayer mats or whatever for the local election results tonight. I hope that we get a relatively settled regime at Tower Hamlets so that the complete mess that has been going on in planning decisions in recent months is resolved, but who knows how it will turn out. We will soon find out.
I think that the company is doing the exactly the right thing by putting out the message that it is business as usual and that recent planning delays are par for the course, but I wonder how much appetite they will have to acquire another major site anytime soon in LBTH, given recent experiences on several deals, Chrisp Street being the obvious running sore, but by no means the only scheme where achieving workable consents is proving to be really difficult and costly. The sooner the May elections are out of the way, the better, whoever gets in. Also very little said recently about what is happening at Balfron Tower, which was heavily shrouded in scaffolding when I was driving by that area late last week.
Interesting that TEF have decided to go through a formal marketing process to select a partner, rather than doing a deal with one of their informal shortlist of existing partners. I wonder if that means that TEF were not happy with the pricing they could achieve with those partners and so decided to cast the net more widely, or whether this signals the preferred approach of Jerome Geoghegan now that he is on board. Either way, I imagine that there will be a fair amount of interest, but it is quite some time since they last did a BTR sale - and they invariably take quite a time to negotiate even after heads of terms are agreed because they are relatively complex.
All very positive and I am a happy holder, but:- 1. Debt will increase materially in 2018 (Arden project net debt of �33.4m, up from �17.9m in FY2017); 2. We know very little (almost nothing) about the financial terms of the NIKE deal. In particular, we do not know whether NIKE are funding any part of the R&D costs and whether they have contractual commitments to buy the developed product; 3. ZTF apparently encountered cost overrun and time delay issues when they installed the first high pressure autoclave at Kentucky. I am sure that they learnt from the experience, but they have a much larger investment programme in 2018/19 to manage and hints that there may well be more to follow; 4. The ROCE figures are not that great - it is all about whether the major investment programme actually pays off; 5. MuCell is still fairly small and the figures seem to be driven by relatively few customers. I remain a fan, but it is yet not a slam-dunk.
I quite agree that UANC has done well to secure this site, but I also think that it is highly speculative and may take a decade or more to come to fruition - if it ever does. So, I doubt that UANC have much more than an option at this point. I believe that this site is in the location of the "City in the Vale" suggested by 5th Studio in their recent report to the National Infrastructure Commission, at the point where the proposed East West Rail (Varsity) line intersects with the proposed HS2 route. So, aside from planning, the deal is probably dependent on HS2 and probably East West Rail being built, with a new station in the vicinity. That is on top of highway upgrades (and so further Government investment) and planning. It reminds me a bit of how Ebbsfleet started when it was rolled into the HSI bill back in the mid 1990s. A long haul, but good that UANC have an early position for what I hope is not much cost at this stage. I was rather more cheered by the RNS on 28 February that UANC had been selected as master developer - in partnership with Wellcome Trust - for the Manydown strategic extension of Basingstoke, where the plan is to deliver around 3,500 new homes, with the possibility of that being extended, as the awarding Councils also have a further 1,230 acres of land for potential development (although that would doubtless be the subject of a further competition). Wellcome Trust is an excellent partner for UANC and whilst the scheme still needs planning permission, the signs all look good.
I think that it is a "kitchen sink" approach. The LBTH aim is to preserve maximum flexibility and protection against a likely appeal. I also feel for the officers, who have an impossible job and who who produced a massively detailed report. Usually, every instinct is to avoid a public inquiry, but this just might be the exception. Whatever they come up with, I fear that the applicants will always be asked to jump higher. Uncomfortable and painful though it will be, a line has to be drawn to bring an end to this process. I hope that this scheme will be highlighted to Government as part of the consultation process on freeing up planning announced earlier this week. It is a classic example as to why much needed schemes are being frustrated. I am not holding my breath for central intervention, but that is what is needed.
As I observed in a post a couple of weeks ago, TEF have a tricky decision to make. I believe that they could go to appeal now, either on the basis that the LBTH Strategic Development Committee "deferral" decision in February in reality amounted to a refusal or that LBTH is out of time to reach a decision (assuming that the applicants did not grant an extension of time to LBTH which is still relevant. Now that the SDC minutes have been published,there has been a subtle change of emphasis - no doubt on legal advice - to the press report that said that the applicants had been asked to come up with a better offer (a de facto refusal). Now, the minutes state that the application was deferred to enable LBTH planning officers (not the applicants) to prepare a supplementary report on issues including the level of affordable housing- no time limits set.It is now so political that you have to doubt that a negotiated compromise will be achieved. It would doubtless mean a public inquiry with significant cost and delay as mentioned by Steph, but better to bite the bullet and get the clock ticking?
This one is very tricky for TEF. Based on the limited reports so far in the public domain, I don't think that in reality the scheme was "put on hold" as the ES article suggests. Referring the scheme back to the applicants to come up with a better offer means that it was rejected - quite aside from whether the failure to reach a decision for this long constitutes a deemed refusal because the statutory time limits have been exceeded. TEF does a lot of business with LBTH, so will no doubt be weighing up what to do on a portfolio basis. TEF must have known that this sort of outcome was quite likely, so will have already decided in principle what the next step is. I agree with Steph that a face saving tweak that secures an approval is probably the preferred option, but there is an argument that it is all too difficult and that the councillors would secretly welcome an imposed decision where they can say that they held out as far as they could. It is a complete shambles and disservice to the residents.
The 16 page update report and the key detailed report from the Plannning Officer to the committee both unequivocally recommend approval of the scheme. The one good thing about such an exhaustive exercise is that it should make any appeal easier, relatively speaking. The fact that the affordable housing element is above and beyond what is required seems to have been lost in the wash. The officer’s report is very clear on this aspect. It is a very thorough report.
Sain, the local authority elections take place on May 3rd. This vote kicks the can down the (East India Dock) Road until after the elections. It looks as if the committee tried to use wording that did not amount to an outright refusal (which could be appealed and where specific reasons for refusal would have to be given). If so, I don’t think that they succeeded. The applicants now have a judgement call as to whether to go straight to appeal or to try to negotiate yet further changes. Given the politically charged atmosphere, there must be real doubts that the Council will approve any viable commercial scheme. More cost and delay whatever the decision. Also bad news for the families on the waiting list that the councillor refers to.
So, I understand that the LBTH planning meeting last night was a lively affair and that - despite pretty much everyone agreeing that the site needs to be redeveloped to provide much needed enhanced facilities - the councillors did not follow the advice of their planning officers and deferred/rejected the proposal, asking for further concessions. The costs on this one must be simply eye-watering. The final paper to the committee from the planning officer ran to over 100 pages and demonstrated the huge amount of time, effort and inevitably money that has been devoted by all the main stakeholders to try to secure an acceptable solution. Hugely depressing. The Mayor should get involved if his stated intentions to speed up housebuilding (including affordable housing) are to mean anything. It is just too difficult at the moment. I have never seen a scheme with as much complexity as Chrisp Street Market. It makes Canary Wharf seem straightforward by comparison.
WJG published its full year results this morning. There are several interesting areas for comparison to TEF - and not just the sky high rating of the shares (too frothy for my liking). The main chunk of their business is purpose built student accommodation (PBSA) and they forward sell pretty much all of that. More recently, they have expanded into build to rent and it looks as if they intend to grow that element fairly aggressively. However, in contrast to their PBSA strategy, apparently they intend to delay their disposal of schemes until late in the process. The CEO states that "..we will increasingly be able to demonstrate the revenue enhancement and cost savings achievable with specialist management ,[i.e. their small specialist property management arm] which in turn all increase the value of completed assets. We are therefore currently taking a prudent approach to forward sales, in anticipation of rising values in the build to rent market. Across the board, WJG achieved an operating margin of 14.1% It does not break this down between the three lines of business. It will be interesting to see how it fares and what margin it achieves over the next few years for this extra level of risk.
Yes; Telford exchanged unconditionally on Cambridge Heath and took the planning risk. That was no doubt a major factor in knocking out other bidders. The next year or so will be fascinating for the evolution of the BTR sector. Many of the top international players are circling, including the North American funds. As well as Greystar and very probably Oxford Properties, there was an article in the FT today that indicated that Brookfield had allocated a couple of towers at Canary Wharf for this type of development. The sector is in its infancy and hats off to Telford for spotting this early. Maybe my favourite share.
One question on the Walthamstow deal - does anyone know why U+I sold out, having secured planning consent as recently as this July? The RNS they issued referred to having achieved a return at the top end of what they expected, so perhaps they just decided to bank a good gain, but you would have thought that it is the sort of scheme that they would want to build out.