Redwurzel
Well-known member
Ref Investment Stuff
Warren Buffet's advice is buy when others don't or vice versa.
Well I had a good think and I thought what is unpopular at present but is still quality.
Everybody assumes work from home will increase and this will reduce demand for London Commercial property both office and retail space.
Add in every one assumes UK base interest rates will rise to at least 5% from 4.5% and possibly 5.5% during 2023 - hence making borrowing more expensive for property companies
A number of people think BREXIT will reduce the number of tourists in London and reduce demand for office space.
Office space in general needs a lot of new expensive investment to improve its energy ratings and its use for modern working (hot desking etc)
Their conclusion sell London Commercial Property - hence Derwent Properties and Great Portland Estates shares have lost half their values from peaks in 2019.
So I have just bought some shares in these 2.
Some reasons/my thinking
The current values of the shares is only 65% of the current property values with overall 3% yield. Normally shares equate to property values with these 2 businesses.
Rents are rising for their properties despite Covid, WFH etc
Their properties are mainly in prime London locations e.g, Euston Road, Tottenham Court Road, Bond Street, Marlyebone, Piccadilly, in the City, Shoreditch - not Canary Wharf
These two companies are not heavily indebted.
Their current vacancy rates are very low for these businesses - 3% to 4% empty property
They offer fully managed services which is increasing trend.
They have expertise in modernising building and many already are - unlike a number of rivals.
Their buildings generally have multi-use so there are options to easily change use e.g office to residential or retail to leisure
They know how to cope with market where interest rates are higher than yields i.e, times before 2008. Newer busineses may not.
New businesses still want to locate in Central London such as Tik Tok, its easier to attract young talent, but they want very modern buildings inside.
Demand will drop overall, but could increase for the right quality.
Complete new build is not happening on the same scale so supply is not increasing as in the past. and there are limited opportunities in central London.
New Elizabeth Line has made accessibility easier as will HR2.
The trend to fully online shopping is flattening out
Demand for residential and leisure property is still high in London and if anything increasing.
I can see a UK Government re introducing duty free shopping in the UK for overseas residents and that now includes any country.
I am happy for others opinions, especially anyone in this industry.
Warren Buffet's advice is buy when others don't or vice versa.
Well I had a good think and I thought what is unpopular at present but is still quality.
Everybody assumes work from home will increase and this will reduce demand for London Commercial property both office and retail space.
Add in every one assumes UK base interest rates will rise to at least 5% from 4.5% and possibly 5.5% during 2023 - hence making borrowing more expensive for property companies
A number of people think BREXIT will reduce the number of tourists in London and reduce demand for office space.
Office space in general needs a lot of new expensive investment to improve its energy ratings and its use for modern working (hot desking etc)
Their conclusion sell London Commercial Property - hence Derwent Properties and Great Portland Estates shares have lost half their values from peaks in 2019.
So I have just bought some shares in these 2.
Some reasons/my thinking
The current values of the shares is only 65% of the current property values with overall 3% yield. Normally shares equate to property values with these 2 businesses.
Rents are rising for their properties despite Covid, WFH etc
Their properties are mainly in prime London locations e.g, Euston Road, Tottenham Court Road, Bond Street, Marlyebone, Piccadilly, in the City, Shoreditch - not Canary Wharf
These two companies are not heavily indebted.
Their current vacancy rates are very low for these businesses - 3% to 4% empty property
They offer fully managed services which is increasing trend.
They have expertise in modernising building and many already are - unlike a number of rivals.
Their buildings generally have multi-use so there are options to easily change use e.g office to residential or retail to leisure
They know how to cope with market where interest rates are higher than yields i.e, times before 2008. Newer busineses may not.
New businesses still want to locate in Central London such as Tik Tok, its easier to attract young talent, but they want very modern buildings inside.
Demand will drop overall, but could increase for the right quality.
Complete new build is not happening on the same scale so supply is not increasing as in the past. and there are limited opportunities in central London.
New Elizabeth Line has made accessibility easier as will HR2.
The trend to fully online shopping is flattening out
Demand for residential and leisure property is still high in London and if anything increasing.
I can see a UK Government re introducing duty free shopping in the UK for overseas residents and that now includes any country.
I am happy for others opinions, especially anyone in this industry.
Last edited:
