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PROPERTY
nipper
post Posted: Dec 26 2019, 03:03 PM
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QUOTE
"This initial acquisition significantly improves the funds from operations (FFO) yield of the fund against the fund’s product disclosure statement (PDS) forecast as a result of the opportunity to fund the acquisition with debt, on attractive terms, whilst maintaining ECF’s conservative gearing of approximately 36 per cent."

This is a quote from the recently listed Eleanor Commercial Property Trust (ECF). Now it's buying an A grade Canberra office, with a lease of Govt department till 2024. I'd be happy to put some money on
a) an empty building at lease expiry,
b) an evaporation of the headline 9% yield around the same time
C) a whoops moment when " conservative gearing of 36%" leads to closing for redemption, reval of assets , new Cap rates and rather embarrassed unit holders when the interest cycle turns.

Meanwhile, management has taken its clip. Then the assets will be sold at distressed prices to a new outfit. Wash, rinse, repeat.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Jun 25 2019, 12:41 PM
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National Storage REIT (NSR) has launched a $170 million institutional placement as it looks to expand locally and in New Zealand.

It’s the latest property trust raising in a sector which is running hot, with Mirvac, Dexus and Charter Hall vehicles already tapping the market to buy more properties.

JPMorgan and Morgan Stanley are handling the National Storage placement at a fixed price of $1.71 per share, a 4.4 per cent discount to the distribution adjusted last close of $1.79.

National Storage will also have a security purchase plan to raise a further $20m and said it had struck about $235m worth of storage deals across Australasia in this half.
- niche REITs such as NSR and Goodman doing very well of late
.... just watch gearing levels, if /when downturn comes around



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Jun 22 2019, 05:40 PM
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.... stronger commodity prices have led to a number of mining towns dramatically increasing in value.

Two Queensland coal towns Blackwater and Dysart jumped 57 per cent to $133,750 and 46 per cent to $95,000 respectively in the 12 months to the end of May, according to realestate.com.au figures.

- be a whole lot of mugs that paid a lot more than these sorts of prices, in the last resources boom. (And 'twill take a while to clear the stock overhang)




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Jun 15 2019, 11:25 AM
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In Reply To: mullokintyre's post @ Jun 15 2019, 11:21 AM

Yep, agreed .... Probably one reason to keep a residual rump mortgage, then use it as a withdraw facility / line of credit, if and when needed. (mortgage rates are now in the 3's, low 4's)



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mullokintyre
post Posted: Jun 15 2019, 11:21 AM
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In Reply To: nipper's post @ Jun 15 2019, 09:09 AM

QUOTE
The interest rate is 5.25 per cent. There are to be no establishment fees but there may be legal fees. Borrowings will be advanced in the form of fortnightly income payments and the payments will not count as assessable income for determining age pension entitlements. The debt is usually recovered when the property is sold, or from the borrower's estate once the home owner dies.


Interest rates set by the RBA at 1.25%, so the 5.25% set by this govt scheme seems a bit rich.
Mick



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nipper
post Posted: Jun 15 2019, 09:09 AM
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The property dilemma for Retirees

"Asset rich and income poor" is becoming a more and more common refrain from a sector of the population as a combination of economic and demographic circumstances combine to squeeze the elderly.
QUOTE
Brendan Ryan, founder of Later Life Advice, which advises people on living off their retirement savings, says: “Reverse mortgages can strike fear into the hearts of people because a loan with compounding interest can have a dramatic effect on people's wealth.”

Ryan ... says the new government pension loan offers a facility to draw down income. “It creates a cash flow to help retirees’ standard of living, rather than a lump sum.” He wants to see more detail before making a final judgement, but is encouraged by what he has seen so far.

Reverse mortgages fell out of favour with banks and borrowers over the past decade because of their complexity and expense.

But with about four million Baby Boomers currently aged over 65, and 8.8 million by 2057, there is increasing demand for a credit, or equity, product enabling property owners to tap into their equity.

New providers, such as ME Bank, are moving into the market with different types of products, such as "reversion schemes" that provide a lump sum repaid upon death as a percentage of sale proceeds of the property. Other new schemes include "fractional release", which allows a property owner to sell equity in their property.

Investors in a senior equity release receive monthly rental income of 3 per cent (net of all fees) and “own” a share of the capital value through units in a segregated sub-fund, according to DomaCom, an investment company. When the property is sold, the vendor and investors receive their share of the sale price. This can happen when the vendor dies or if they decide to move.

Another way to unlock capital is to downsize, which involves costly and time-consuming property transactions. Increasingly volatile property markets mean it might be hard to predict the outcome.

From July 1, cash-poor property owners will be able to apply for the federal government’s expanded Pension Loans Scheme, which is a "reverse mortgage" that enables borrowed cash to be repaid out of the proceeds of an eventual sale. About one million people are expected to be eligible for the scheme, which is open to those who own a house (including investment property) outright and either are of pension age or have a partner of pension age. Those who meet the criteria can apply to receive an income stream of 1.5 times the maximum rate of pension each fortnight (singles $926 and couples $1396).
QUOTE
The PLS, which has been extended to retirees irrespective of whether they receive or qualify for the pension, opens the way for eligible retirees to borrow regular income payments of up to 150 per cent of the maximum pension entitlement (less the pension amounts they receive).

For a single person this is about $35,000 a year and for a couple it is about $54,000. Full or part pensioners will be able to borrow the difference between their age pension and the maximum. For example, a single age pensioner eligible for the maximum rate of pension of $24,000, will now be able to draw about $12,000 more each year as a loan.

Amounts borrowed under the scheme to administered by the Department of Human Services, become a debt due to the Commonwealth and the debt must be secured by a charge against the borrower's real property. Interest compounds until the debt is repaid.

The interest rate is 5.25 per cent. There are to be no establishment fees but there may be legal fees. Borrowings will be advanced in the form of fortnightly income payments and the payments will not count as assessable income for determining age pension entitlements. The debt is usually recovered when the property is sold, or from the borrower's estate once the home owner dies.
https://www.afr.com/personal-finance/budget...20190611-p51wl3



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 

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nipper
post Posted: Jun 13 2019, 11:35 AM
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Some $16 billion has flooded into the country’s listed property stocks over the past eight months, finding favour with fund managers, and office and industrial landlords in particular as investors head for certainty in a lower yielding market.

The surge in the real estate investment trust sector began last November as yields on 10-year government bonds began tightening, driving the value of property stocks in the top 200 from about $116 billion then to about $132 billion at the start of June....
- and is this a



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Jun 2 2019, 03:53 PM
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In Reply To: triage's post @ Jun 2 2019, 01:05 PM

Not Krung Thep, no. Maybe this is more res privata, but they wanted 1point6. I pity the poor young couples that had "expressed an interest" but not bid; they were pounced upon at the end of proceedings
https://www.realestate.com.au/property/unit...n-east-nsw-2041



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
triage
post Posted: Jun 2 2019, 01:05 PM
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In Reply To: nipper's post @ Jun 2 2019, 11:12 AM

Is that the one in Bangkok? You jetsetter you. rolleyes.gif


Capital Appreciation, who apparently is a bit of legend in ACT real estate blogging, mentioned on macrobusiness that he went to an auction in Narrabundah yesterday. The place sold for $895k late last year and all they got yesterday was crickets from the crowd, so it was passed in at $900k (taking into account costs these people are looking at a chunky loss).

https://www.allhomes.com.au/sale/11-warramo...berra-176697316

Someone else pointed out that the number of confirmed sales in Sydney yesterday was about the same as for the corresponding weekend last year and about half that of the corresponding weekend in 2017. Sydney and Melbourne have been deflating for about 20 months straight now, and that predates the royal commission and any effect of the ALP's election platform. Perhaps we will see a dead cat bounce in the big cities but given the coalition has undertaken to cut another $1.5b from the public service maybe Canberra will flatline at best (???).



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"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog
 
nipper
post Posted: Jun 2 2019, 11:12 AM
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Went to a weekend auction. Des Res apartment on the harbour. Auctioneer was late, good crowd but mainly locals. After the spiel, silence. ...all over in 1 minute.

Shuffling out and talking with attendees, there's no interest. Very negative mood. People just hanging in.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
 


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