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GPT - GPT Group

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gerg

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Hi
I have been offered additional units in this leading REIT for 60c each. This is way below the current NTA and the same as the institutional offer.

Given GPT's recent fall from grace and heavy price falls I am somewhat sceptical about taking up this offer. However if the planned future dividend of 7.2c per unit is achieved them its a decent return for more funds invested. I am oin this basis inclined to take it up, and it will reduce my overall current cost per unit.

Its does support the groups debt reduction strategy and the market seemed happy with it given the take up by the institutions. GPT does have a quite a good suite of office and retails assets (plus some recreational and european duds)

Are there any pearls of wisdome out there with supporting or contrary views.

gerg
 

I'm taking up my full offering at 60c each. Now selling at $1.02, that's an immediate return of 70%. Only wish I could get some more.

Note, monies have to be received by Nov 17.
 
The resultant excitement saw over 25m GPT shares trade immediately upon resumption and the share price briefly rocket to $1.44. It's good to see there's still a little irrational exuberance out there.
 
Its not usual for arb situations like this to come up.

Normally the price falls to the entitlement issue price. Will be interesting to see what happens. Surely there will be selling pressure once the offer is complete
 
gday all
im on here.

i dont hold this stock atm but have being following it recently
i heard they raised $1.3 billion since september 08
listening on foxtel channel 602 your money
1 day they discussed this stock and when it was .74cents /share they said it was at a 30?percent discount, i dont know to what but maybe the same sector.

it does have alot of debt but has some quality assets
yesterday it was at 61cents

would anyone have anymore info on this stock or were to get some?
free
eg papers etc

doesnt seem like many people interested in it
thanks Richo
 
Hey Shadda

I've also noticed it. It has had huge volumes recently but not much news.
As far as information goes I recommend you do your own research cause (Company Reports, General news) cause recommendations nearly always come with hidden agendas.

Personally I got on board yesterday. Unemployment is still relatively low, they raised 1.3bn back in November and they should be helped by lower interest rates. All in all much better value than residential real estate at the moment.
 
I note that even with the proceeds of the October 2008 capital raising banked there's still a big slab of debt (~$1.3b) due to expire in 2010.

Without some asset sales and/or improved credit markets between now and then another heavily discounted capital raising could be on the cards.
 
There are no guarantees but with Libor coming down I expect they will get their refinancing in 2010. Certainly the prevailing ASX sentiment is to sell property but I think its been overdone. Why would the banks continually shut down GPT, FKP, Stocklands, Mirvac etc whilst continuing to give residential investors no deposit loans. I concede residential property is safer but essentially both commercial and residential property values face the same variables of unemployment and access to credit. Given GPT owns its property in Sydney and has better interest cover than most of its competitors I think the risk is worth it. At this point I should add I am NOT a financial advisor
 
GPT is another excellent Australian long term conservative investment ruined (or put at severe risk) by greedy American fee-mongers. Send them all home, recpapitalise and start over.

American CDOs - what a con - ruined Iceland a previously very nice, peaceful, conservative wealthy country. More American bs to come.
 
The loans of the big listed REIT's are not limited to Australian banks (home lenders). Many have big loans with overseas insitiutions. GPT is no exception.

Having reviewed the investor presentation for the October 2008 capital raising I note that GPT has two other potential financial obligations in addition to it's balance sheet debt. These are noted under Risks on page 34 of the above document.

The first is a garantee on a JV party loan of $US313 million and the second a put option write over a half share of a shopping centre. While I am interested in GPT these kind of things make me cautious about buying in now. Reassurances about the likely liability from the JV party loan are not exactly reassuring given GPT's folly with the Babcock and Brown JV.

Whatever happens the REIT sector will emerge a far less geared sector than it currently is. That is for those entities that survive.
 
I concede you make valid points and as its down since I got on board so Mr Market agrees with you. However I will add that the govt will be forced to take steps to help save certain companies (Another reason I like Sydney CBD). Our banks were not allowed to let Centro die so why GPT? The collapse of a GPT would see Commercial property plummett and the book losses for the bankers multiplied.
 
I have not suggested GPT will collapse but some REIT's will. Centro is obvuiously in a far worse shape than GPT having effectively collapsed in all but name only.

With GPT however I feel there are still too many uncertainties to invest now and that the prospect of a lower entry price is good.

The wildcard though is an opportunistic predator taking a stake in the company in order to have a crack at it's better assets. Looking around though, which of the listed REIT's have the capital for such an adventure ?

Stockland moved in and that provided a short term boost for GPT but at the moment it's looking like Quinn moved too soon.
 
Again fair points however in a bear market cheaper entry points are usually a good bet as we're all catching a falling knife. Cash still has to be parked somewhere
 
drsmith said:
Now we know why.

Stockland have just dived in with a 12.7% stake in GPT at an average price of $1.07.
Click to expand...

Stockland are seriously under water now on GPT and FKP! $0.27 per unit now. T/over? Still a premium Australian portfolio.

If its another cap in hand equity raising (Citi reckon its in the order of $850m on the back of $350m in asset sales) then it will kill what's left of the A-REIT sector. It will be the XJO S&P Westfield sector.
 
Swallow me knob!

$0.27 allready and I'm yet to look seriously at the latest financials.

To what extent has the BNB joint venture been written down?
To the last dollar I hope.

Where can I find the Citi article?
 
drsmith said:
Swallow me knob!

$0.27 allready and I'm yet to look seriously at the latest financials.

To what extent has the BNB joint venture been written down?
To the last dollar I hope.

Where can I find the Citi article?
Click to expand...

It's the Citi Real Estate Handbook Feb'09. Covers what's left of the A-REITs.


_______________________
 
GPT has a very desirable "land bank" especially in Sydney. During the boom time there was a severe shortage of suitable building sites, now it looks like REIT that are in distress have to sell them off at a huge discount. Only problem no one has the cash to take real advantage of the fire sale.
 
GPT's current carrying value on the BNB joint venture is $1.16bn as noted on page 7 of the following document.

http://www.asx.com.au/asxpdf/20090227/pdf/31g9nvk05lr8qq.pdf

Balance sheet and look-through gearing are 33.7% and 46.6% respectively against covenant levels of 40% and 55%. If the BNB joint venture is written down to nil the above gearing ratios rise to 37.2% and 51.6%.

GPT has also aknowledged the need for further equity capital (underwritten DRP) in the absence of sufficient asset sales.
 
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