Thursday, Jan 15, 2009
Property Companies close to breaching bank agreements
Bloomberg: U.K. Real-Estate Companies Need to Raise $20 Billion
The five largest real estate investment trusts -- Land Securities Plc, British Land Co., Hammerson Plc, Liberty International Plc and Segro -- have combined debt of 19 billion pounds ($28 billion), according to their latest reports. About 700 million pounds of loans are due this year, research by Nomura International Plc shows. The banks that granted those loans may now be reluctant to provide more credit.
That could spur another year of losses for REIT investors. The FTSE 350 Real Estate Index of 18 stocks fell 46 percent last year, the most since the index was created in 1986. The worst performer was Liberty, which declined 56 percent.
Posted by mountain goat @ 11:29 AM (418 views) Add Comment
6 Comments
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1. tyrellcorporation said...
It'll be interesting to see whether Mandy bails these guys out with our/my money. I'm inclined to think not.
2. bellwether said...
MG I wouldn't bet on it, if these property companies collapse the Banks will need to be saved again.
3. techieman said...
The 350 is down a bit more from that from its peak. It peaked at the begining of 2007 at around 5700 its now around 1700. Around 70%. I spose a question is, is that correlated to house prices (with a lag)?
Taylor W is interesting as its lost its capitalisation and the shares have been around -90%. its been demoted from the FTSE100, to a small cap.
Tyrellcorp - did you dip your toe in? Although i said i would wait for a pullback i wasnt expecting one of this magnitude to be fair ! Although i have said not to trust this rally, as you know i had a long position, which i got out of half of at the high (after hours), after that i sold a bit more as it started to look shakey, although looks like a third of the position is going to be loss making though.
And now? Am really not confident one way or the other - will probably be a bit rangey....but interesting none the less. David Schwatz was right - as i said before, he said that 90% of the time mid january had losses, until bearer the end when the market historically turns up.
4. techieman said...
By the way for the componets : http://www.selftrade.co.uk/constituents.php?symbole=3uNMX8730.L
These are the percent moves of the index for various periods....
1 week 2,072.34 -339.47 -16.38%
1 mth 1,909.07 -176.20 -9.23%
3 mths 2,457.15 -724.28 -29.48%
6 mths 2,557.60 -824.73 -32.25%
1 yr 3,335.70 -1,602.83 -48.05%
3 yrs 4,527.20 -2,794.33 -61.72%
Time to buy ? ;-).
5. tyrellcorporation said...
Nope I stayed out, which seems to have been right - for now. I just wish I'd bought some BP when they hit 379p a few months ago - doh! Plenty of grotty news coming though I reckon and it's difficult to see where the bulls are going to get some ammo. I sitting tight for a while longer as those nasty US consumer spending readings will surely be replicated in the UK very soon.
Thanks for the data too. ;)
6. techieman said...
Good decision TC! I am Mr Bear but i must say that since that seems to be mainstream...... which makes me think we may well have a rally to knock out the bears first! As i said im sidelined now and will wait to see what the future holds. TC ever investigated being anle to short or thats not your bag. I am just suggesting because in a bear market its very difficult to make money on individual issues against a prevailing (when it arrives) trend. As ever for me the long term is after lunch!