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First case...

Grainger margins fall in 'fragile' property market

The group, which develops, trades and rents out residential properties, has revealed that it sold significantly more vacant homes in the 10 months to July than in the same period last year, but at a sharply discounted margin.

Grainger sold 625 properties in the period for £86m at a margin of 35.5pc, compared with 566 in the same period a year earlier for £101m, at a margin of 45pc.

In a trading statement, the group said sales prices of vacant properties were on average 8pc below valuations in September last year.

The group made investment sales – of properties with a tenant in place – of £38m, up significantly on the £18m in the same period last year, but at a discount to 7pc on valuations last September.

Andrew Cunningham, the acting chief executive officer, was nonetheless confident that there some signs of life in the market, with had seen a "modest improvement" over the last few months. Sales proceeds were likely to exceed those of last year, Mr Cunningham said.

Vacant property sales in the four months to July were up on the previous six months, covering the quieter winter period, with 587 units fetching £73m, compared with 442 for £55m.

Mr Cunningham added, however, that: "Despite signs of increasing stability we anticipate that the market will remain fragile in the short term and our focus will, therefore, continue to be on cash conservation". The group cut its debt pile by £100m in the four months to July, to £1.56bn.

KBC Peel Hunt analysts said that Grainger's statement was reassuring and upgraded their rating on the stock from "hold" to "buy", adding that the company had again demonstrated its "ability to trade out of the corner".

Second case...

Stockland to sell UK assets as its posts A$1.8bn loss Read more: http://www.propertyweek.com/story.asp?sect...1#ixzz0NzhiezFh

Australian and UK property company Stockland has said it will exit the UK as market conditions ‘remain difficult’.

In its full year results published today it said that its UK arm, formerly known as Stockland Halladale, had made an A$0.7m operating loss and a pre-tax inventory impairment of A$186m.

Stockland said: ‘In light of the changed market conditions and investor sentiment towards offshore expansion, Stockland has decided to embark on an orderly sale of assets over the next two to three years. In the meantime, the group will complete projects under way and manage its assets tightly to maximise returns.’

Overall the group posted a massive full year statutory accounting loss of A$1.8bn as a result of a number of negative non-cash items including goodwill impairments and downward revaluations of investment properties and strategic investments. It also included fair value adjustments of financial instruments and foreign exchange movements.

Its underlying profit, as adjusted to reflect the directors’ assessment of the result for the company’s ongoing business activities, was A$631.4m.

Stockland managing director Matthew Quinn said that despite the large headline accounting loss, the ‘company had delivered a reasonable operating result given the difficult economic conditions’.

He said: ‘It has been a tough year and our full year 2009 results reflect the challenges we faced. Throughout the year we have focused on debt reduction, streamlining our business and driving cost and operational efficiencies to ensure we come out of the downturn in a strong position. We enter this financial year with record residential contracts on hand, good profits from retirement living and a strong lease expiry profile in our commercial property business.’

Discounts and bolting after the barn doors closed. Meh.

Property goes both up, and down. Always has, always will.

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