A glut of new builds in London right now. Some prices reduced substantially but they were 20% higher than the market. CCO admitted themselves that sales have reduced in Earls Court. Then you have brexit looming, stamp duty has risen over past two years and set to increase again April? Fewer foreign buyers, new hurdles in buy to let market, rand stronger against pound than a month or so back. Covent Garden still seems to be doing well though - the super-duper rich never seem to be affected. Long term still a great company but I'm happy to be out for now.
Capco has always been a dodgy listed property stock, in my opinion. At R55bn market cap, you would expect companies like this to be well established by now, but these guys can hardly make 0.4% in income distribution - which is the main reason for buying listed property. Compare this to quality property stocks, like ITU, NEPI (abroad) and Resilient and HYP locally - they are way behind what I would consider as quality in this sector.
Not to mention that CCO was trading at a BIG premium to her underlying while INTU is at a 30% odd discount. Funnily enough - we discussed these two stocks before, SKAAP. I don't know that I like shopping centres much though. Still have the position I bought as a hedge which is up again thanks to the current currency standoff. I have forgotten what motivated me so to buy them in the first place and will probably dump them.
The problem is Pound weakness will drive property stocks lower. This thing dipped to R58 a couple of weeks ago. I am up nicely. The growth will be constrained by lettings and rental increases in a consumer led recession. New share issues in REITS mean that these are never really growth stocks - so just a hedge then. Their distributions are also not tax effective since they are taxed at the marginal rate. LONG term okay - short term - a bout of Rand strength will cause havoc. BUT if we are talking LOOOng term - where's the growth? Still - a traditional good company way below NAV.