Member Info for james188

Front page article in The Evening Standard tonight about the spat between the Communities Secretary (at least, for the moment) and the Mayor over the number of new homes being built in London and the level of average house prices. Gesture politics and I suspect that both parties realise that the annual build target in the draft London Plan is not going to be achieved any time soon (let alone the much higher figures that Government officials are apparently pushing for - good luck with that). However, it might encourage the Mayor and his team to put more pressure on local planning authorities dragging their heels - not limited to LBTH) and TEF is a likely beneficiary.

Once the PRS market (in London) has developed a bit more and become an established separate asset class - which I personally believe will happen - I think that TEF will be distinguished from the other generalist builders that it is currently lumped in with. That should lead to a rerating. At the moment, the different risk profile is not sufficiently well understood or credited by the market and so the share price is depressed. How long the rerating will take is an interesting question.

Hello Sain. There was no mention of. Ew sites beyond the two in negotiation recently reported, but what was said was that there was not considered to be any shortage of opportunities, so I am pretty certain that there is other stuff under review. I forgot to ask about the significant JV site in East London that was first trailed some two years ago, but my assumption from the lack of recent comment is that the deal collapsed at the detailed negotiating stage. John was also philosophical on the various LBTH sites, which I talked to him about at some length. He did say that in his view institutions have not been put off investing in LBTH, notwithstanding the somewhat charged political atmosphere. As I think you have observed in the past, the difficulties in unlocking these complex sites constitutes a significant barrier to entry for other would be competitors.

Savin, Essentially, steady as she goes. There was some discussion about the fact that there are not really any listed companies that are direct comparable to TEF and that the share price sometimes gets clobbered when the likes of Crest issue announcements. I chatted to John afterwards (and separately to Jerome, who I think will prove to be a very good signing). On the PRS front, I understand that TEF has been deluged with approaches and so I have no doubt that they will sign up with at least one insti and probably more. Savillshave been appointed to help them assess and rank the various approaches. I would be amazed if Greystar were not one of the parties that they select as a long term partner. You will also have seen that Oxford Properties have now hooked up with Delancey. The model they are using is tried and tested, although not the only option.

Anyone else going tomorrow? I am planning to attend. I wonder if we will have extra company from the Balfron Tower/Chrisp Street lobbyists.

The development pipeline is down on what it was two years ago, at which time TEF stated that its vision was to double the size of the business over a five year period by increasing its output of homes to around 1500 each year. I also remember reading somewhere that TEF believed that it had the capacity to handle around 10,000 units under construction.
Two years on and the numbers are well short of that, so they are due at least one new big deal - and probably a few. Maybe we will be told a bit more in the trading update.

I totally agree that the LBTH councillors may well want the decision on Chrisp Street to be taken out of their hands. It is all too toxic and they are damned whatever they do. The same goes for Balfron Tower and Commercial Road. In any event, LBTH must be perilously close to be taken into special measures on planning decisions, because the administration has totally broken down. It is almost beyond belief. Very sadly, local residents will lose out through all of this (and I used to be one quite a few years ago and I know the area well). As a TEF shareholder, my view is that there are other London boroughs nearby that are more open to sensible development and I hope that TEF hunt elsewhere for new sites, where the risk profile is much better. For TEF, the speculative costs for the schemes that they have in LBTH must be sub optimal and some. The residents are being very poorly served, in my view.

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?