Property Stocks

[Dolcile]

Big capital raise from PCT.   Paying dividends while issuing equity is an interesting strategy. 

[Waltzing]

Truly amazing....just shows the quality of the management in some of these property companies... slick salesman..

[Basil]

The large Precinct capital raise has put a lot of temporary price pressure on others in this sector. I like KPG and ARG the most in this sector and current pricing looks like a real opportunity to me for those not already well positioned in those two.

[Waltzing]

Looks like the COMP PROPS have run out of steam for a while.. really did PCT think it was cheaper to cap raise rather issue bonds? Or has it reach its covenants..

[Basil]

Their gearing before the cap raise was 41% which is getting up there.  I think this capital raise gives them the capability to buy MCK's downtown M Social hotel giving a more complete downtown development.

[Dolcile]

41% is certainly up there. My understanding is most banks like to remain at under 55-60% LVR. 

[Waltzing]

SIR B, runs a local intelligence gathering network hes set up over decades.. notes come in by hand from operatives circulating around the city in everything from Tax Cabs to shoe shine boys....

[Shareguy]

The listed property sector had a second consecutive positive month in June and still looks attractive.

The property sector continues to screen attractively despite recent volatility, now trading at: (1) a -21% discount to NTA; (2) a gross yield of 8.2% (33% taxpayer), which is +360bp above the 10-year bond rate (five-year average c.320bp); and (3) a PE of c.16x, more than eight turns below the broader NZ market. Current share prices are implying a further -14% reduction in asset values, but NTA has already been marked down and recent transactions have been at a c.-5% discount to book.

The use of any asset sale proceeds to buy back stock is currently an attractive way to manage AFFO and/or NTA dilution from any divestment, says FB.

Goodman NZ (GNZ) is the only REIT to have actively pursued a share buyback recently (its programme still has c.NZ$110m remaining). This initiative has helped support the GNZ share price, now trading broadly in line with its NTA, whereas other names in the sector are trading at a significant discount (ranging from -11% to -36%)

I also look at this from a diversification point of view away from residential and without the issues of owning property outright.

Disc/ Holding both VHP and KPG