F&C to Make ‘Brave’ Foray Into Ireland’s Ailing Property Mar

businessweek.com/news/2010-0 … arket.html

Someone sees a bottom

in January, without saying where it got the information. McGrath declined to comment on the report.

McGrath’s company, created in 2008 by a merger between F&C Asset Management’s property business and REIT Asset Management, took advantage of the drop in U.K. prices last year following the collapse of Lehman Brothers Holdings Inc.

“We said this is the worst it’s ever been; there are people out here who are weak and desperate to sell,” said McGrath. “This is our opportunity, our time.”

This doesn’t surprise me.
In terms of commercial and retail units, there is value out there.
Basicially, the net yield is positive.

What a REIT like this needs to do, is a thorough examination of the tenant in order to access the strength of the underlying covenant. They have the benefit of a 3-4 year slump to shake out those with good credit from those with bad.

With a positive yield, the danger of falling capital values is minimised as the cashflow will keep the bank loans paid.

I still think it’s too early though.
€20 billion annual government borrowings paper over a lot of cracks in the economy.
Caveat emptor.

A bit of added perspective, last year AIB sold some more of its branch network.
These yielded between 6%-7%.
The market has since fallen further, meaning the yield has increased.
Currently, SCD residential is still yielding sub 4%.

Ah, I was just bemoaning the lack of evil FOREIGN investors coming in yesterday… Interesting spin on it now, a year or two down the line… “Brave”?

Brave isn’t the word for it!

If they can get 7% net; on a long lease, where the passing rent isn’t twice the current going rate and where there isn’t a massive oversupply of empty space. It might be worth considering.

Well, you’d need to have a really good handle on your tenant’s business and likely long term financial health, to be honest, in terms of the general economy, stabilisation seems a long way off.

Concerning value, today’s Indo reports that

HTF can the Indo know the yield if the sum paid was undisclosed???
Uh oh, they’re not taking the agent’s word for it again, are they?

Interesting Inis Man.

feeauctioneers.ie/84-clanbra … -moda.aspx

Edited to add.

dundalkdemocrat.ie/dundalkne … 6117316.jp

As we speak, brendan o connor is looking to invest in this smart, ballllllllsy company.

The owners of Jack & Jones and Vera Moda (same group own both) are not in great financial shape at all… I’d be wanting significantly better than a 10% yield.

Well anyone that has an investment product/pension with Friends First Life Assurance Company has their money invested with Foreign and Colonial (F&C).

The yield did not change for those who bought. Only those who kept their powder dry could hope for an increased yield. It’s important to have blue chip tenants who can’t liquidate out of their leases to get out of upwards only rent reviews. The increased yield is to compensate for the increasing risk of this risk event and also the risk of legislation negatively effecting upwards only rent reviews.