# Any good property company for long term investing?



## lukelee (27 September 2009)

Is there any good property company for long term investing?
currently I am holding sgp. 
Any suggestions appreciated


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## Saucebottle (27 September 2009)

lukelee said:


> Is there any good property company for long term investing?
> currently I am holding sgp.
> Any suggestions appreciated




CNP Centro Mate.  They will get there debt extension this week by the look of the levels of volume in the last week. .40 really cheap.. Great long term hold.


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## drsmith (27 September 2009)

Saucebottle said:


> CNP Centro Mate.  They will get there debt extension this week by the look of the levels of volume in the last week. .40 really cheap.. Great long term hold.



At the beginning of the year Centro's lenders were too frightened to take it off life support fearing the impact a fire sale of it's assets could have on property valuations.

The deal struck then allows the banks to convert some of the debt to equity. This though is at the expense of existing unitholders who will be heavily diluted. The banks will get most of any equity upside so in this context the recent unit price rise is very hard to fathom.


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## white_goodman (27 September 2009)

SGP would be one of the picks of the bunch along with Westfield.

Im still wary of asset revaluations that may put pressure on sales/firesales... although current asset prices havent been marked down 'that' much, cos there is little sales data in the market if any property firm is forced to liquidate assets this may put pressure on debt to equity ratios.


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## sammy84 (27 September 2009)

drsmith said:


> At the beginning of the year Centro's lenders were too frightened to take it off life support fearing the impact a fire sale of it's assets could have on property valuations.
> 
> The deal struck then allows the banks to convert some of the debt to equity. This though is at the expense of existing unitholders who will be heavily diluted. The banks will get most of any equity upside so in this context the recent unit price rise is very hard to fathom.




I'm thinking a renegotiation must be in the works, hard to explain at 400%+ rise any other way. I don't see why the lenders would renegotiate though, they did get themselves a pretty deal looking at it 10 months later.


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## drsmith (27 September 2009)

I'm also wary of the yield. At present market prices WDC/SGP/GPT will be only be yielding 5 to 6% under future distribution policies.


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## lukelee (27 September 2009)

Saucebottle said:


> CNP Centro Mate.  They will get there debt extension this week by the look of the levels of volume in the last week. .40 really cheap.. Great long term hold.




Thanks!






it went very low in 2008 because of the financial crisis. it goes up really fast in the recent week.  Is this because the debt extension?
this is a good option. thank again.


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## drsmith (27 September 2009)

sammy84 said:


> I'm thinking a renegotiation must be in the works, hard to explain at 400%+ rise any other way. I don't see why the lenders would renegotiate though, they did get themselves a pretty deal looking at it 10 months later.



If that is the case, CNP's unprovoked announcement on the 24th regarding the rapid rise will go down as one of the biggest corporate porkies of 2009.

http://www.asx.com.au/asxpdf/20090924/pdf/31kx8bcrf1fl9z.pdf


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## lukelee (27 September 2009)

drsmith said:


> I'm also wary of the yield. At present market prices WDC/SGP/GPT will be only be yielding 5 to 6% under future distribution policies.



Why is that?
WDC seems good, according to their half year report, isnt it?
http://www.asx.com.au/asxpdf/20090826/pdf/31k9nhz05cpjpg.pdf

if pick 2 companies from SGP,CNP, WDC, GPT for long term investing, which 2 do you choose? guys


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## el_caro (28 September 2009)

*Property*



lukelee said:


> Is there any good property company for long term investing?
> currently I am holding sgp.
> Any suggestions appreciated




I would seriously consider an ETF like SPDR S7P / ASX 200 Listed Property (SLF). This will give you exposure to all the companies in the property index.
Think you are on the right track. Property index (XPJ) remains the most seriously beaten up and I believe will outperform all other sectors over the next 12 months.


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## drsmith (28 September 2009)

lukelee said:


> Why is that?
> WDC seems good, according to their half year report, isnt it?
> http://www.asx.com.au/asxpdf/20090826/pdf/31k9nhz05cpjpg.pdf
> 
> if pick 2 companies from SGP,CNP, WDC, GPT for long term investing, which 2 do you choose? guys



WDC is outstanding compared to its peers but that is reflected in the share price.

Note that on page 1 of the report WDC will reduce it's distribution payout ratio to 70-75% of operational earnings from the August 2010 distribution. This is prudent but it does mean an annual distribution to about $0.70 per unit or just over 5% yield at current prices. Stockland will be around $0.21 per unit and GPT about $0.04 per unit. CNP won't pay a brass razoo to unitholders for a long time under the terms of it's refinance with it's lenders at the beginning of the year.

Another thing to note with WDC is that NTA per unit as at June 30 is $11.02 so the current share price is indicating that investors are attributing goodwill to the development side of the business and/or attributing a higher value to the shopping centres than currently aknowledged on the balance sheet. Time will tell if this is appropriate.

I have not had time to look at the latest reports for GPT and SGP in detail and I'm in no hurry. Of the four REIT's you mention though, WDC, GPT and SGP would represent investments and CNP a gamble. CER (Centro Retail trust) might be a better gamble than CNP as it has not suffered a dilutive refinance (yet) but this is not one that I have looked at in detail. Perhaps others can comment further here.


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## matty2.0 (28 September 2009)

WDC this, SGP that ... blah blah blah ... same old same old ... unoriginal platitudes. 

Here's one for ya ... CPA. 

Undersupply of office properties in sydney, unlike 1990s downturn. suprise on the upside w/re; earnings (yield).


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