Bank turmoil dangerous sign for UK property 18 Mar 2008 To strike deals and halt the slide in UK property prices, investors need banks to lend to them. But debt is increasingly elusive, due to a double squeeze from worldwide liquidity worries and highly leveraged borrowers. This unholy mix could keep real estate prices heading south.
Wolseley’s strategy goes wrong 17 Mar 2008 The building materials group has two problems a big exposure to US housing and high leverage. It s trying to tough it out by cutting capex, while increasing the dividend. But it might do better to swallow some pride, raise equity and buy while assets are cheap.
Toll shows CEO pay is tough to reform 14 Mar 2008 With share prices plunging, investors are paying careful attention to gaps between executive pay and performance. Efforts to give shareholders a sayonpay have been gaining momentum. But talk is cheap. As Toll Bros shows, changing pay practices can be much more difficult.
Crowded banks could put floor under City rents 13 Mar 2008 In the last City office crash, in 2003, banks had just moved to bigger premises, flush with dotcom exuberance. When they didn t fill the extra space they dumped it, and rents plunged. This time, banks are using all their space. Only a jobs bloodbath could hit rents as badly.
Freddie and Fannie should raise more capital 13 Mar 2008 If they have called the housing market right, they may not need more. But that s a big if. And with capital tight, they can't easily help the US mortgage market their public mission. Raising new equity would dilute shareholders. But if it's spent wisely, they could benefit.
Dubai tries to pick off Colonial’s crown jewels 12 Mar 2008 The Dubai fund aims to buy only the troubled Spanish property company s good rental business, leaving shareholders with cash and a rump of risky assets. The majority shareholders have agreed to sell, but Colonial s beleaguered banks still have to sign off, which could be tricky.
US mortgage bailout options 11 Mar 2008 Pressure is growing in Washington to aid underwater homeowners. Robert Cyran handicaps the various government bailout plans.
Battle for Colonial looks far from over 4 Mar 2008 It s not clear whether Dubai Investment Corp has really walked away from its E3bn bid for the troubled Spanish property company. Shareholders should hope not. The share price is plummeting and there is a mountain of debt. The indebted biggest holders lack bargaining power.
UK should learn from resilient buy-to-let market 3 Mar 2008 Buytolet investors are riding out the UK property storm. There s a chronic shortage of rental housing which developers would like to address. Right now the government tries to require affordable housing for buyers. Supporting rental development might be a better way.
Is Fannie Mae starting a liar loan business? 29 Feb 2008 Move over, Ninja. The US mortgage giant is offering overburdened borrowers unsecured loans to pay off their arrears, based partly on verbal confirmation of ability to pay. It s billed as helping stretched homeowners, but Fannie's bottom line might gain most for now.
Dubai tightens screws on Colonial 27 Feb 2008 The emirate s sovereign wealth fund has offered shareholders in the troubled Spanish property firm a miserly cash premium or a bond that pays no cash for four years. It s not so great for Colonial shareholders. But they don t have much bargaining power.
UK property bulls should put money where mouth is 26 Feb 2008 Most real estate bosses say the 12% fall in UK values since summer won t get any worse. If they mean it, they should buy property derivatives, which are forecasting the same fall again in 2008 they could earn a tidy profit if Armageddon is avoided. If not, then talk is cheap.
Should property companies diversify or specialise? 25 Feb 2008 Big UK real estate investment trusts mostly run diversified portfolios. That's worked well Hammerson's asset value only fell slightly in the second half of 2007. But Land Securities is splitting up in the middle of a downturn. That may sound crazy, but investors could benefit.
Why would one property fund buy shares in another? 19 Feb 2008 Because that s the cheapest way to buy UK property these days. So a New Star fund is investing some of the proceeds from asset sales in closedend funds which are going at a big discount. That may make sense, but then why should investors pay New Star a 1.5% management fee?
French retail safer port than UK in property storm 14 Feb 2008 UK shopping centres are like supertankers according to property investor Liberty they're ploughing through the downturn with only modest damage to NAV. But cheaper debt and robust growth mean its French cousins aren't tanking at all. Investors might prefer this port of call.
An Englishman’s home is his millstone 11 Feb 2008 UK homeowners have often seen house price inflation as a boon. But Britons pay too much, borrow too much and work too hard to afford their small, overpriced homes. And high prices also exclude many from homeownership.
Happy birthday, credit crunch 7 Feb 2008 It s the first anniversary of HSBC and New Century revealing mounting problems with subprime loans. Once thought containable, the US s mortgage woes were instead the catalyst for bursting the broader leveraged credit bubble. So far, only more confusion seems to lie ahead.
British Land set to weather UK real estate storm 7 Feb 2008 The UK Reit has slashed asset values by 16%, but its closedend structure means investors, not the company, feel most of the pain. Unless UK property prices collapse totally, British Land will survive the downturn. It could even profit from the distress of forced sellers.
Troubled Spanish real estate firm tempts Dubai 4 Feb 2008 Colonial boomed along with the Spanish market. But now the overgeared company and its overgeared shareholders face a repayment squeeze. Enter Dubai. The sovereign wealth fund has enough money and patience to make a go of Colonial. But it might find easier pickings elsewhere.
Spanish real estate woes could trap cajas 4 Feb 2008 The savings banks have been allowed to expand lending aggressively in Spain, but not raise much equity. As real estate falls back, they look more exposed than the big and internationally diversified commercial banks. Big losses are possible in this politically favoured sector.