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Are The Big Companies Starting To Panic

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Is this the start of the panic

British Land planning £1bn disposal

By Jenny Davey

BRITISH LAND, the FTSE 100 property company, is planning to sell more than £1 billion of property over the next 18 months after a strategic review of its portfolio, The Times has learnt.

It is understood that British Land will seek to cash in on high demand for commercial property and soaring values by selling assets that it believes will underperform in the next few years. Buildings for sale include CityPoint, a £500 million office tower in the City of London, which will represent Britain’s largest single office investment sale.

http://business.timesonline.co.uk/article/...1794740,00.html

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Good find.

The company is also preparing to sell its £300 million residential property portfolio.

Seems that they are also considering altering their retail property portfolio. Probably can't see much upside to either markets in the UK, cash in and move elsewhere.

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Guest Time 2 raise Interest Rates

Tower trouble by Anthony Hilton.

A few weeks ago, Lehman published an article on the skyscraper index, which

charted the propensity of countries to produce huge buildings just as the eoonomy

was about to tank-the Empire State Building conceived in 1929, or Canary Wharf

in 1989 being obvious examples.

So take note that Minerva appears to be getting cold feet about its plan to build

a 700-foot, 50-storey monster in the City. With its figures came news that it was

looking at alternative designs for the site, which it thinks might turn out to be

easier to let.

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Good find.

Seems that they are also considering altering their retail property portfolio.  Probably can't see much upside to either markets in the UK, cash in and move elsewhere.

Yields have been driven further and further downwards in commercial property (especially London office space) by huge demand from Irish and German investors. Irish syndicates (groups of wealthy private investors) on the one hand and German institutions who see greater value in London offices than they do in alternative investments (cash, gilts, German Property) on the other.

British Land may be selling at a peak. But equally, even at high prices, it appears that there are buyers. Also property companies often buy property and hold in rising markets, whereas in times that cannot be described as 'boom' they have to concentrate much more on 'sweating' their assets - adding value (extending, refurbishing, upgraiding facilities, change of use etc). British Land will probably re-invest in UK Commercial Property that they believe they can add value to.

How closely linked are the commercial and residential property markets? I ask this as a genuine question and not trying to make any point.

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TTRIR

I'm playing devils advocate here, but it may be that Minerva's decision not to build is a sensible business decision at a peak. They want to ensure the market is not ruined by oversupply, and are doing their bit to make sure that doesn't happen. Maybe some lessons have been learnt from the late 80s and developers will keep a low profile for a few years rather than display the irrational exuberance which lead to the last commercial property crash.

I do think property is currently overvalued but we should always expect the unexpected. Do not take a crash for granted.

FF

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TTRIR

I'm playing devils advocate here, but it may be that Minerva's decision not to build is a sensible business decision at a peak.  They want to ensure the market is not ruined by oversupply, and are doing their bit to make sure that doesn't happen.  Maybe some lessons have been learnt from the late 80s and developers will keep a low profile for a few years rather than display the irrational exuberance which lead to the last commercial property crash.

I do think property is currently overvalued but we should always expect the unexpected.  Do not take a crash for granted.

FF

FF

Always expect the unexpected. Couldn't agree more. Also, never take people's advice and predictions too seriously. The most important thing is to do your own research. With regards to not taking the crash for granted, I wouldn't dream of it. Imo, a crash is inevitable and undeerway. The only thing that's not is the scale.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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