'well managed" - there is the kernel, I suspect
Debt and related issues - mainly those trusts kept alive by drip feed from banks rolling over loans because if they cut off the credit there would be an almighty mess as true valuations become "discovered". And that wouldn't be pretty.
But occupancy is there, rents are paid, yileds discovered and the market isn't all doom and gloom. Another aspct wil be M&A as the carcasses are picked over:
http://www.theaustralian.com.au/busines ... 5811133244
LISTED property trusts are expected to shrug off this year's woes and launch into a round of mergers and acquisitions next year. Buyers sidelined for the past year are plotting their return, according to Colliers International Victoria chief executive John Marasco.
"Motivated buyers are expected to drive yield compression for core assets, and we expect the bulk of this activity to be off-market in the first half of 2010," he said.
Successful recapitalisations mean there is no longer pressure on the big REITs to sell assets. But next year, some of the properties that have been on and off the market in the past 12 months may find buyers. These include Melbourne's $400 million 242 Exhibition Street Telstra headquarters, which Investa put on the market last year but later withdrew as market conditions deteriorated.
Macquarie Bank's No 1 Martin Place could also be back on the market, along with the former Record Realty 20 Bridge Street Stock Exchange building, now controlled by Bank of Scotland. Industry Superannuation Property Trust chief executive Daryl Browning said there was tentative interest from property investors because of improved equity markets and a view that downside risk had eased.
"Expect more deals to occur across all sectors because of this, and simply improved sentiment, " he said. The availability -- and pricing -- of debt remained an issue, as did the global refinancing challenge of the next two to three years, he said.
Rising interest rates could tip more loans into default, while there was also a question mark over the sustainability of global economic recovery as various stimulus packages wound down. BIS Shrapnel chief economist Frank Gelber said next year would bring a resurgence of commercial markets.
Property Trusts
Re: Property Trusts
by benthonic » Sun Dec 20, 2009 4:18 pm
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Re: Property Trusts
by Judd » Fri Feb 18, 2011 10:42 am
Not a listed trust but privately held. Sometimes it just does not go according to plan.
http://www.smh.com.au/business/receiver ... 1aybl.html
Anybody know of any other lovely time-bombs out there or does the adage "You can't go wrong with property" still hold true?
http://www.smh.com.au/business/receiver ... 1aybl.html
Receivers called in as huge Top Ryde Shopping Centre runs up $700m debt six months after opening
Vanda Carson
February 18, 2011
THE Top Ryde Shopping Centre has fallen victim to weak consumer spending just six months after the Prime Minister opened the massive complex.
A syndicate of four banks foreclosed on the newly renovated centre on Wednesday after the retail development tycoon John Beville was unable to meet the repayments on hefty loans used to give the centre a facelift.
His company owes an estimated $700 million to its lenders, which appointed receiver McGrathNicol on Wednesday.
McGrathNicol partner Joseph Hayes said yesterday new centre managers had been appointed, but day-to-day operations of the centre would remain unchanged.
The foreclosure shows a growing impatience by banks no longer willing to wait for the lacklustre retail conditions to improve before appointing receivers.
Many of the centre's speciality stores have been hard hit by the decline in consumer spending over the past year. Bureau of Statistics figures for the December quarter reveal that shops selling footwear, watches and jewellery, takeaway coffee, flowers, sporting goods, toys and video games had been hardest hit.
Mr Beville does not have the same financial muscle as big players such as Westfield, and his lenders tried to sell the centre in November but received no offers.
The centre, which contains a Myer store, a Big W and more than 250 specialty stores, was touted to be worth $840 million three years ago, but is now believed to be worth less than $700 million.
The centre has been owned by the family for a decade before being expanded. It was developed as an alternative to the Macquarie Shopping Centre in North Ryde and the Rhodes Shopping Centre.
Mr Beville's Harbourside shopping centre at Darling Harbour has not been caught up in the receivership, although it has also been in financial difficulty in recent months after its lenders demanded Mr Beville's company reduce its debt levels by more than $7 million. That dispute has since been settled.
Mr Beville, 67, from Darling Point got into financial trouble when the renovation budget for Top Ryde blew out and he was forced to borrow more money. When he had to repay the loans he was unable to pass on the higher costs to his tenants with rent rises.
He was also caught in the pub downturn, after investing $12 million into his son's pub group, which collapsed.
Anybody know of any other lovely time-bombs out there or does the adage "You can't go wrong with property" still hold true?
Regards
Judd
Judd
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Re: Property Trusts
by benthonic » Fri Feb 18, 2011 1:11 pm
Conventional wisdom (the weight of money) is that:
- listed property trusts are selling below NTA. Sometimes this is undestandable, as the 'value' of assets may not be captured if sold (Centro, ING &etc). Other de-geared, well capitalised LPTs are being held back by the overhang of assets yet to come to market.
- unlisted property funds also fall into similar split of viable and non-viable. the main action of the 'responsible entities' has been to keep their heads down and hope no-one notices, and continue to make (reduced) distributions if possible. But when refinancing is due and the bankers come with their view as opposed to the wishful self-preserving managements', then the sensible ones froze the funds and looked to manage debt. . anything to put off a forced sale or 3.
- the last few years has seen some groping around to find out true value. The old way of doing so, by comparative valuations from sales of like properties has been distorted in that only the viable properties have been sold (leaving the worse performers on the books, and merely putting off the day....)
- until there is 'capitulation', liquidity, an orderly market, then the money will flow from the weak to the strong.
- there are tentative steps, however, that the 'backlog' of 2008 washups is slowly working its way through the system. Banks are considering deals, whereas before it was NO before the deal was on the table.
- Much unit holder wealth has been destroyed through over-gearing int he Bad Old Days, and what they describe as a 'lack of alignment between management andinvestor interest.
- listed property trusts are selling below NTA. Sometimes this is undestandable, as the 'value' of assets may not be captured if sold (Centro, ING &etc). Other de-geared, well capitalised LPTs are being held back by the overhang of assets yet to come to market.
- unlisted property funds also fall into similar split of viable and non-viable. the main action of the 'responsible entities' has been to keep their heads down and hope no-one notices, and continue to make (reduced) distributions if possible. But when refinancing is due and the bankers come with their view as opposed to the wishful self-preserving managements', then the sensible ones froze the funds and looked to manage debt. . anything to put off a forced sale or 3.
- the last few years has seen some groping around to find out true value. The old way of doing so, by comparative valuations from sales of like properties has been distorted in that only the viable properties have been sold (leaving the worse performers on the books, and merely putting off the day....)
- until there is 'capitulation', liquidity, an orderly market, then the money will flow from the weak to the strong.
- there are tentative steps, however, that the 'backlog' of 2008 washups is slowly working its way through the system. Banks are considering deals, whereas before it was NO before the deal was on the table.
- Much unit holder wealth has been destroyed through over-gearing int he Bad Old Days, and what they describe as a 'lack of alignment between management andinvestor interest.
- benthonic
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