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Commercial Property News
Helical Bar calls bottom of the commercial property market next year and reports H1 profits up 74%
Helical Bar has spent the past few years scaling down its portfolio, but Mike Slade, property veteran and Helical Bar chief executive, said the company intends to start buying again from spring 2009, to seize opportunities that only arise "once or twice in a property career."
He was speaking as the company reported a £12.7million pre-tax profit for the six months to September 30, an increase of 74%. The company did not undertake a revaluation of its investment portfolio at the half-year stage.
Mr Slade said that there would be a lot more pain to come in the sector from March when there will be "some nasty property revaluations". At that point, Helical Bar will be ready to start buying again, he said.
March is the year-end for many property companies, at which point portfolio valuations are brought up to date. The downward revisions are likely to cause a spiral of falling values, said Mr Slade. "The dear banks, much as I love them, are going to be in an even worse state come March. It's getting worse by the day. Major property companies next year will be doing emergency rights issues," he said.
“We are seeing stuff at mouthwatering prices, but it [the market] is still a falling knife,” he said. “We're approaching the nadir, which will be shortly after the March valuations next year.”
Mr Slade is likely to pounce on properties in partnership with a private North American opportunity fund, with which he has set up a relationship. He declined to name the private equity partner but said that Helical Bar has about £72 million of its own cash for purchases and would look at any property assets with yields of above 8.5%.
Helical Bar, which specialises as an investor and developer in retirement villages, student accommodation and property outsourcing, reported a strong set of half-year results, the main contribution was a leap in development profits from £4.3 million last year to £7.9 million, despite writedowns of trading and development stock of £13.1 million.
Helical's Net Asset Value (NAV) fell by 5% to 333p a share, but this figure is largely irrelevant as the company did not undertake a revaluation of its investment portfolio.
Mr Slade said that there were three challenges to the property market. The first is to protect the business it has, the second is to team up with an investor and “make mayhem” in the market and the third is to ensure that a business still exists.
Of the outlook for the property market, Mr Slade said there were still worrying signs. “It's going to get worse on the high street and buildings are going to empty,” he said.
Meanwhile Grainger, the UK's largest quoted residential landlord, and Quintain Estates and Development, the social housing developer behind the regeneration of the area around Wembley Stadium, both reported heavy losses on the back of falling valuations of their property.
He was speaking as the company reported a £12.7million pre-tax profit for the six months to September 30, an increase of 74%. The company did not undertake a revaluation of its investment portfolio at the half-year stage.
Mr Slade said that there would be a lot more pain to come in the sector from March when there will be "some nasty property revaluations". At that point, Helical Bar will be ready to start buying again, he said.
March is the year-end for many property companies, at which point portfolio valuations are brought up to date. The downward revisions are likely to cause a spiral of falling values, said Mr Slade. "The dear banks, much as I love them, are going to be in an even worse state come March. It's getting worse by the day. Major property companies next year will be doing emergency rights issues," he said.
“We are seeing stuff at mouthwatering prices, but it [the market] is still a falling knife,” he said. “We're approaching the nadir, which will be shortly after the March valuations next year.”
Mr Slade is likely to pounce on properties in partnership with a private North American opportunity fund, with which he has set up a relationship. He declined to name the private equity partner but said that Helical Bar has about £72 million of its own cash for purchases and would look at any property assets with yields of above 8.5%.
Helical Bar, which specialises as an investor and developer in retirement villages, student accommodation and property outsourcing, reported a strong set of half-year results, the main contribution was a leap in development profits from £4.3 million last year to £7.9 million, despite writedowns of trading and development stock of £13.1 million.
Helical's Net Asset Value (NAV) fell by 5% to 333p a share, but this figure is largely irrelevant as the company did not undertake a revaluation of its investment portfolio.
Mr Slade said that there were three challenges to the property market. The first is to protect the business it has, the second is to team up with an investor and “make mayhem” in the market and the third is to ensure that a business still exists.
Of the outlook for the property market, Mr Slade said there were still worrying signs. “It's going to get worse on the high street and buildings are going to empty,” he said.
Meanwhile Grainger, the UK's largest quoted residential landlord, and Quintain Estates and Development, the social housing developer behind the regeneration of the area around Wembley Stadium, both reported heavy losses on the back of falling valuations of their property.
Fri, 28th Nov 2008