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Colonial is still benefitting from high rents and decent occupancy ratios aside from the 18% voids in Barcelona (two marketable buildings following recent delivery). The next significant refinancing in 2023-24 (in advance of a €1bn repayment scheduled in 2025) will tell which portion of FFO is at risk.
Companies: Inmobiliaria Colonial (COL:BME)Inmobiliaria Colonial SOCIMI SA (COL:MCE)
Colonial posted “amazing figures” (à la Trump) even if such a performance wasn’t recognised by the stockmarket. The NAV per share was up 10% yoy but the share price was down 48%. Why?
Companies: Inmobiliaria Colonial SOCIMI SA (0RID:LON)Inmobiliaria Colonial SOCIMI SA (COL:MCE)
The assets performed well in Q1 22 with Gross Rental Income (GRI) up 4.1% (2.7% lfl). €1.5bn of acquisitions in FY 22-23 will push the top-line higher.
Following its asset-stripping phase, Colonial is back to its net-buyer strategy. It intends to acquire €1.5bn of assets in 2022-23, weighing 12% of its December 2021 GAV.
Strategic vacancy supported rising consolidated vacancy: from 4.9% in H1 21 to 6.6% in Q3 21. The latter reached 8% in Spain. Nevertheless, end-market parameters don’t show strong issues despite the ECB’s first warning about European commercial real estate.
Following Gecina’s H1 21 earlier this week, no major surprises have occurred. The portfolio’s performance was stable overall, as was end-market rents in Spain. Downward recurring profit in FY 21 was confirmed. This should precede a catch-up attributable to the nice deliveries planned in Paris in 2022-24, if vacancy stays low in the current standing portfolio by this horizon.
Colonial will acquire the missing 18% of Société Foncière Lyonnaise (listed, not covered), its key French subsidiary, in a cash, shares and asset deal. It won’t modify Colonial’s profile deeply.
Recent disposals and rising vacancy in Q4 20 percolate into a lower revenue in Q1 21. Profits will be down in FY 21. The pre-let portion of the company’s pipeline should support recovering recurring EPS in FY 22.
Before the strong building commissionings planned in 2022-24 in the City of Paris, Colonial has accelerated its disposals in FY 20. Even if this has weighed on the top line, it has secured the balance sheet. Rising vacancy everywhere should pervade in end-market rents in FY 21-22. It has started in Spain already.
The rally of the past five days has pushed up Colonial’s share price. The Q3 20 figures showed nevertheless a weakening lfl performance, coupled with stable rents in Spain, for the third consecutive quarter. Vacancy rised slightly before the long convalescence of the Spanish economy.
Companies: Inmobiliaria Colonial SOCIMI SA (COL:MCE)Inmobiliaria Colonial SOCIMI SA (0RID:LON)
Values were stable or roughly so in both France and Spain in H1 20, despite nice rent contributions (positive reversion). However, this contrasts with the very strong trend observed in FY 19. We believe that H1 20 only shows the beginning of a much deeper adjustment. But, at pixel time, the fact is that the office market’s rents are stable.
Companies: Inmobiliaria Colonial SOCIMI SA
The Q1 20 figures were the best ever for Colonial. It now forecasts stable rents in FY 20 in Madrid, Barcelona and Paris vs. a strong increase some weeks ago. We do believe in a logical strong adjustment. The first flavours of yield decompression are just arriving from Asia, some weeks or months ahead the European cycle.
FY 19 was another outstanding year for Colonial. In 2019, we were still pointing out the growing vulnerability of end markets in both Spain and the City of Paris, due to depressed macros vs. growing and growing rents and prices per sqm. Without being the origin of a downturn, the Coronavirus could be the missing catalyst of a softening Continental Offices market. We confirm our negative stance.
Both rents and price per sqm were expected to both exceed 2007’s famous last peak before mid-2020 in Barcelona. Spain looks to be solid for now with one of the highest GDP growth rates in Europe (tourism, local take-up in Q2 19 / Offices…). However such a growth pace in rents (prime rents to grow by 12% per year) is not sustainable over the next three years, in our view.
The Spanish market is still booming with strong demand pushing up rents in a context of low new supply. Market rent growth did not slow at all in Q1 19 despite the observable macro slowdown.
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While the management reiterated its full-year guidance, the third quarter results confirmed that interest rate increases also have a negative side in the form of negative equity adjustments and a looming asset quality deterioration.
Companies: Lloyds Banking Group plc
The FDA has announced it has completed the first pre-market consultation for a food product made from cultured animal cells. The submission, made by Upside Foods, and FDA response means that the agency accepts Upside's data package and conclusion that its cultivated chicken product is safe to eat. This clearly represents a significant achievement for Upside Foods and a major milestone for the cultivated meat sector in general, marking the first significant regulatory milestone in a major jurisdi
Companies: Agronomics Limited
Marlowe has released a robust set of H1/23E results, with strong organic growth (+8% YoY), improved Adj EBITDA margins (+100bps YoY to 18.8%), and confirmation that it is trading “slightly ahead” of expectations for full year Adj EBITDA. We nudge up our FY23E Adj EBITDA by £1m to £82m, leave FY24E Adj EBITDA unchanged (at £93m), but lower Adj Diluted EPS in both years (by 9% and 11% respectively), primarily to account for higher interest rates on increased borrowings (used to fund recent M&A). D
Companies: Marlowe Plc
Companies: H&T Group plc
A solid H1 performance is evident with revenue and earnings growth. The dividend has been maintained underpinned by £100m+ net cash. Whilst H1 earnings performance comfortably covered ~55% of our prior earnings estimates, we are encouraged to note that AuM has grown by 7% to £33.5bn in the last month, benefiting from positive market performance. Flows have remained neutral. We do not assume that strong growth returns, retaining cautious assumptions, but given current AuM is already ahead of our
Companies: Liontrust Asset Management PLC
Singer Capital Markets
Alkemy’s 100%-owned subsidiary Tees Valley Lithium (TVL) has received full planning permission to build its planned world-class, low carbon, lithium hydroxide refining facility at the Wilton International Chemical Park in the Teesside Freeport, UK. Our indicative valuation increases to 1228p/sh (£12.28/sh) from 614p/sh previously. Details in the note...
Companies: Alkemy Capital Investments Plc
Dish of the day
No joiners today.
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What’s cooking in the IPO kitchen?**
Kistos Holdings plc, intends to join AIM. The Company was incorporated to act as a new holding company for the group companies 0f Kistos plc (KIST), a holding company with the objective of creating value for its investors through the acquisition and management of companies or businesses in the energy sector. Anticipated Market Cap £327m. Expected 22 Dec 2022.
AT85 Global Mid-Market Infrastr
Companies: SEE JSE MKA EAH ABDP MRL TENG KIBO
Palace Capital has released interim results to the end of September reporting adjusted profit before tax of £3.5m (1HFY22 £4.0m) and adjusted EPS of 7.9p (1HFY22 8.7p), mainly reflecting rising financing costs. The dividend was maintained at the current quarterly run rate of 3.75p and net debt was held broadly flat. EPRA NTA per share fell 8.7% to 356p. The sale of the industrial portfolio remains paused but smaller commercial sales continue together with the sale of apartments at Hudson Quarter
Companies: Palace Capital plc
Augmentum Fintech has reported stable NAV per share at 155.0p during 1H23 (flat HoH, +5% YoY). The 19.3% IRR since IPO is marginally below the Group’s 20% Internal Target Return, unsurprising given a challenging market environment. Broadly stable portfolio valuations come as particularly encouraging with underlying investee performances (100% avg. revenue growth for Top 10 assets) largely offsetting multiple compression (EV/NTM Sales from 5.7x to 4.2x). Following the realisation of AUGM’s invest
Companies: Augmentum Fintech PLC
Dish of the day
Looking Glass Labs (NFTX) joins the Access Segment of the AQSE Growth Market. The company is engaged in digital agency specialising in immersive XR metaverse design, non fungible token architecture and virtual asset royalty streams. Looking Glass Labs is currently listed on the NEO Exchange (Canada). Market Cap £18.8m.
EDX Medical Group joins the Access Segment of AQSE Growth Market. (Formerly TECC Capital plc) EDX operates a molecular biology and diagnostics laboratory
Companies: RUA WYN MOS VAST AEO MTPH TEK TLY ARK
Tatton is delivering strong organic growth, despite bear market conditions. In the 6 months to 30 September 2022 TAM attracted £907m of net inflows, and grew group revenue 15.1%, EPS by 12.9% and DPS by 12.5%.
Companies: Tatton Asset Management Plc
Companies: CLS Holdings plc
Feature article: A different kind of beat: Boyzone, 1996
Quoted company engagement with retail investors – a new world
This month's feature article has been written in collaboration with The Quoted Companies Alliance.
Retail investors used to be the second-class citizens of the stock market. The bulk of their money was held in funds or pension schemes where a professional took all the decisions and where they owned only a tiny part of the equity market directly. They also tended
Companies: OCI ICGT FAS FJV IBT APP ARBB RECI PANR TRX FCSS AVO FEV FSV STX VTA
Hardman & Co
If one looks through the current interest rate cycle and trusts that inflation will be brought under control at some point within an investable timescale, then the hope is that as the cost of capital reduces real estate values will rise again. Our worst-case scenario of a 200bps move in yields and no rental growth would see valuations fall by a third. Many of the discounts that industrial and logistics property companies are trading on are currently wider than this. Couple this with the strong o
Companies: LMP SGRO WHR ASLI EBOX BBOX SHED MLI