Wednesday, Aug 11, 2010
To buy or not to buy
The Motley Fool: The Commercial Property Conundrum
Quote: "Personally, I think this looks like the best opportunity to invest in commercial property shares for years. Despite butterflies over growth and the austerity measures to come, virtually all economists from the Government to the IMF expect the UK economy to keep expanding through into 2012 and beyond. The commercial property shares mentioned in this article have the bulk of their assets in London, too, which is likeliest to withstand savage public sector spending cuts. Meanwhile interest rates look set to remain low for years to come -- and property is about as good as any asset to own if we see a lot of unexpected inflation sparked up as a result. Many listed property companies are still trading at 70% or more off their value of three years ago."
3 Comments
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1. techieman said...
blah di blah di blah... picking bottoms gives you dirty fingers.
"After touching 324p in early March 2009, Land Securities (LSE: LAND) had near-doubled to 726p by November, for instance. Yet despite the ending of the UK recession, ongoing super-low interest rates, and the continuing growth in its Net Asset Value (NAV), Land Securities is now languishing at 616p, having dipped as far as 545p last month. It's yielding a tasty 4.6%, too."
Wonder why that could be?
2. drewster said...
You have to admit though, the London property market does seem to be particularly resilient, both commercial and residential.
3. Stevenl said...
Pubco shares (such as Enterprise Inns and Punch Taverns) give you a risky leveraged play on CP. The interesting bit here is that a lot of these run down pubs could be knocked down and replaced with 10 or more housing units.
The market is pricing in a realisitic risk that these companies go under (which they may) but in an inflationary environment (and Bernanke is just itching to rev up that printing press according to some) they could be ten-baggers over a decade.