Property Stocks

[kiwi2007]

The triple whammy for office real estate
Rising interest rates, remote working and the push for greener buildings suggest a bleak outlook for the commercial property market

https://www.ft.com/content/11ce3ca3-f71e-472c-ba50-6b4a6a59c0ea

"...it is only a question now of how bad it gets. CBRE last month spoke of a "marked slowdown everywhere" thanks to the speed of interest rate rises, which had "taken us all by surprise".

"..optimists on the future of the office may be clinging to an unrealistically rosy scenario. They point, in particular, to a limited impact on office leases since Covid first hit two and half years ago.

That demand picture gives false hope: leases are typically long-term without easy break clauses, meaning that only now is an initial trickle of non-renewals turning into something more worrying. Three-quarters of New York leases, for example, have not come up for renewal in the past two and a half years, a recent SSRN study found."

[arekaywhy]

https://www.nzherald.co.nz/nz/shocking-footage-shows-horrific-attack-on-palmerston-north-shop-by-gang-of-youths/JGGDN7DWSGWXBVSHR6DY4X7X5E/

Stay classy Palmie...is that the KPG mall?

[arekaywhy]

https://www.nzherald.co.nz/business/government-tax-u-turn-landlords-allowed-breaks-back-for-long-term-rentals/SYU2VNIX56C3XHYNS5WWELXXYI/

So this should be good news, particularly for KPG's build to rent model (future)

[kiwi2007]

The FT once again knocking the office rental market..

European office market faces biggest test since financial crisis
Cost of servicing debt tops rental income for first time since 2007 as creditworthiness deteriorates...

.....   Look at the financial crisis and what happened: the pinch points were the refinancing moments, that's where the squeeze can come," said Adam Goldin, head of the UK business for CC Land, the Chinese developer that owns London's Leadenhall Building, known as the "Cheesegrater" skyscraper.

"If you simply don't have the money to refinance then you don't have the money . . . There are plenty of organisations out there, [such as] funds that are closed-ended and can't put more money in, so their one direction is to sell. We will then find out how much capital is there to buy," he added.

[Shareguy]

Craig's recent report says

Implied revaluations impact on gearing
As property values begin to incorporate the rate hike cycle, there is a risk that decreasing valuations may lead to an LPV breaching its gearing covenant ratios. Such a breach may force an LPV to raise equity at dilutive prices

At current asset valuations the NZ LPV sector has an average committed gearing of 32.8%, which rises +8.3% to an average of 41.1% according to Adjusted Premium implied revaluations. We note the following:
With the exception of NZL, none of the NZ LPVs would breach their gearing covenant on a committed basis should property values close to what the Adjusted Premium implies. However, as highlighted before, recent data for NZ dairy land is supportive of current valuations and we view the discount NZL trades to NTA as a function of it being in the early stage of its growth rather than investors view on dairy land revaluations.
On a committed basis GMT and PFI would experience the smallest increase in gearing of +5.9% and 5.6%. This is unsurprising given they have some of the smaller Adjusted Premium implied downwards revaluations.
PCT and VHP have the next lowest increases in committed gearing of +7.2% and +7.0% respectively. In our PCT calculations we have included the $114m development of 117 Pakenham Street which, although an uncommitted opportunity, is experiencing a level of leasing enquiry PCT described as 'encouraging'. We therefore view it will likely commence.
Excluding ARG/IPL/KPG/SPG are implied to experience the greatest increase in committed gearing levels of +8.1%/+9.4%/+10.3%/+12.0%. Pleasingly, should their gearing increase to the point Adjusted Premium implied downwards revaluations suggest, they will still be within their covenants with ARG/IPL/KPG/SPG having headroom of 9%/23%/5%/2%.
 

[Basil]

US REIT index down 12% last quarter.  Maybe the worst of the repricing of REIT's is behind us ?

[KW]

https://www.nzherald.co.nz/business/government-tax-u-turn-landlords-allowed-breaks-back-for-long-term-rentals/SYU2VNIX56C3XHYNS5WWELXXYI/

So this should be good news, particularly for KPG's build to rent model (future)

Do you really want these people https://www.nzherald.co.nz/nz/shocking-footage-shows-horrific-attack-on-palmerston-north-shop-by-gang-of-youths/JGGDN7DWSGWXBVSHR6DY4X7X5E/  living above the shopping malls?  I guess it would give new meaning to "shop local" LOL

[KW]

US REIT index down 12% last quarter.  Maybe the worst of the repricing of REIT's is behind us ?

How many can afford higher interest payments while maintaining current dividend payout?  If they cut their dividends, then there is further market cap price reductions to come.  

Market has been betting on a Fed "pivot" coming soon which has been holding up share prices as the market looks through higher interest rates, however this is looking increasingly unlikely. When "higher for longer" becomes accepted market wisdom, the REITS are all going to reprice again.  

[BlackPeter]

Do you really want these people https://www.nzherald.co.nz/nz/shocking-footage-shows-horrific-attack-on-palmerston-north-shop-by-gang-of-youths/JGGDN7DWSGWXBVSHR6DY4X7X5E/  living above the shopping malls?  I guess it would give new meaning to "shop local" LOL

I'd expect that the rental units on top of malls won't be priced for social housing but apart from that - only really dumb crooks looking for a really short career outside of prison steal from their direct neighbourhood, i.e. it might even be a good idea to allow them to live there .

Here is another proposal: Don't just allow them to live there, but give them jobs as security staff. I am sure problems in these malls would drastically go down!

[winner (n)]

Opportunity knocks says Warren Couillault,  from Hobson Wealth and Koura Wealth

Think he's saying BUY


Does opportunity knock at the door of listed property?



https://businessdesk.co.nz/article/opinion/does-opportunity-knock-at-the-door-of-listed-property

[Plata]

Does that apply to PFI as well? At face value I don't understand why it has such a high share price/low yield, is there some big development coming on stream or is the PFI yield really seen as safer than the NZ 10 year bonds?

[Waltzing]

Smash up train wreck could last a while in this sector... lucky not as bad as the C's though...

Inflation .....

https://www.stuff.co.nz/business/opinion-analysis/300737450/bank-profits-arent-the-problem-the-reserve-bank-is

[arekaywhy]

Smash up train wreck could last a while in this sector... lucky not as bad as the C's though...

Inflation .....

https://www.stuff.co.nz/business/opinion-analysis/300737450/bank-profits-arent-the-problem-the-reserve-bank-is

I'm genuinely surprised they were allowed to run that story

[BlackPeter]

I'm genuinely surprised they were allowed to run that story

Allowed by whom?

Last time I checked this was still a free country apart from a bunch of conspiracy theorists ...

[arekaywhy]

have a look at the terms of the Public Interest Journalism Fund, and then consider the typical bent of the editors at these rags