Property Stocks

[winner (n)]

LEK's update highlights the large discounts to NTA

Divie yields don't look too bad but if they were trading at NTA yields would be

GMT   2.5%
VHP   3.2%
PFI   3.3%
PCT   4.5%
ARG   4.1%
IPL   4.1%
SPG   5.2%
KPG   4.9%

Not that great when looking at it ths way

Must mean something .... wonder what?

[LaserEyeKiwi]

Weekly Update:

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[LaserEyeKiwi]

Weekly Update:

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[Habitz]

Weekly Update:

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What is up with KPG, we all know that kiwis cannot fly, but this kiwi has a wobble

Disc Love the stock but not reinvested.

[arekaywhy]

Yes, very unloved, but I do see potential in Drury

[Plata]

Yes Drury could eventuate to be of similar or superior quality to even Sylvia Park, but it still plays on my mind how poorly management has done over the last decade. Does not inspire confidence that all the spend on Drury or BTR will see meaningful increase in dividend. Also, those malls that they are trying to sell, they have been at it for years now - makes me think the value they are at on the books will be higher than the sale price...

[Auto Rower]

Weekly Update:

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L E K why are you missing out the other  property stocks ,not really sure why you do that !!
Maybe you should rename this thread selected or favorite property stocks

[LaserEyeKiwi]

L E K why are you missing out the other  property stocks ,not really sure why you do that !!
Maybe you should rename this thread selected or favorite property stocks

The 8 stocks listed above are the 8 stocks contained in the NZX property ETF (NPF) and are also large enough that they are included in the NZX50. Would always consider adding some more - what particular names did you think should be considered?

[LaserEyeKiwi]

Kiwi will have up to ~$750m in cash on the books by year end from the sale of Northlands (which has been in the final stages of its sale process for what seems like forever), and at least 50% equity sell down of its office portfolio in the new "co-investment platform" if that transaction proceeds as planned towards year end.

With that cash balance the discount to book value is going to look increasingly attractive with such a large portion of the company's assets in cash vs property.

[Basil]

What is up with KPG, we all know that kiwis cannot fly, but this kiwi has a wobble

Disc Love the stock but not reinvested.

For my money the whole office sector has a huge question mark hanging over it.  What percentage of workers will continue working from home indefinitely ?  How much space will corporates consolidate with their office leases when they come up for renewal ?  Talking around the traps with a few SME's it seems many are planning on reducing their footprint and yet in the second breath many acknowledge that a lot of staff's work from home performance is far from ideal.  Kids, pets, hobbies, food and any number of other possible distractions exist at home that don't so much at work.

Its hard to say how this pans out.  Its rare for me to have to go into Auckland central in rush hour, (I work from home) but I had to on Friday last week.  Anecdotally I was profoundly surprised by the lack of traffic that morning and the trip took a little less than half an hour when I had allowed an hour.

This is a worldwide issue and it hangs over the office sector and it won't surprise me in the slightest if KPG find no takers for their office Joint Venture scheme or if there is a bid it will be at a very significant discount to "theoretical" NTA.  (Remembering that cap rates might be rising with interest rates so last years NTA might be very theoretical).

I think KPG need to show they can execute at least one really meaningful sale ($200m+) before there's any chance a very modest reduction in the discount to NTA occurs, (remembering that all listed companies in this sector are trading at sizeable discounts to NTA).

[Ferg]

Talking around the traps with a few SME's it seems many are planning on reducing their footprint and yet in the second breath many acknowledge that a lot of staff's work from home performance is far from ideal.

This.  It's a balancing act which IMO doesn't work as well as it could for employers.

Was it school holidays last Friday?  That may explain the lack of traffic. 

[Basil]

Ah yes thanks, that explains it, it was school holidays.

[Auto Rower]

The 8 stocks listed above are the 8 stocks contained in the NZX property ETF (NPF) and are also large enough that they are included in the NZX50. Would always consider adding some more - what particular names did you think should be considered?

Hi L E K
I can see that you are looking at the market cap fair guide lines, & there are a few land & construction company's as you know not in your list these would have different objectives & plans ,but I see  A P L as similar to above retail, office,commercial etc and with the smallest cap still comparable for anyone looking at that sphere .
I must add this is in no way criticism of the excellent  updates that you post .
kind regards Auto-rower

[winner (n)]

Here's how property stocks have gone lately

On average 11.3% up from 26 week lows and 6.7% up on 4 week lows

Sector on fire ...... long may it continue

Why is it that whatever you look at with this group of stocks KPG is always the laggard

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[Basil]

Nice work mate, thank you.  For my money, with such a long history of declining eps I think the market is deeply skeptical KPG can execute effectively on their proposed deals in a way that's eps accretive.

Its very easy to be forgiven for thinking their main goals are ESG related and building new shiny things for tenants and their other stakeholders are more important than shareholders.  EPS growth is simply not on their radar.
I listened in to their most recent call and I was REALLY underwhelmed.  I wouldn't back these guys to build a major new town center in Drury that's eps accretive for all the tea in China.  I think they are woefully short on expertise to engage in a project of that size in a way that creates value for shareholders.  Selling their office assets into a new joint venture vehicle they will manage, lets see shall we.  A lot of their assets have been on the block for a long time now and their execution, (what execution ?), has been very poor.

I think the market is dead right to be deeply skeptical about KPG's ability to perform relative to its peers.