what time is it?, page-8

TJ128,

Thank you for the compliment.I must tell you that I have kept an eye on the Valad portfolio for quite a while..probably a year.

As I pointed out previously,I am involved in distressed property aquisitions...thats all anyone needs to know.

Back in March I was of the opinion that Valad were going to struggle with a share price heading towards the City Pacific lows (now in receivership). The core business in Australia was great and they had a sensible spread of investments with some fantastic cash cows in the Storage units (Kennards, etc).

The mistake was made in the heady days not long ago to expand offshore to be masters of the Industrial sector.Big mistake..more caution should have been exercised within an overheated global property market where funding was never an issue.

If you needed to borrow a few billion to buy out an interesting industrial portfolio yielding 5% (approx) gross P.A. you only needed to be in the game with a recognisable brand behind you and a quick call to the local International Investment Banker and hey, bingo! the money was there before you could blink.Bankers would parcel out the loan to someone else down the line and so it went on down the line.Everyone took a fee.Including the buyer who instantly had a cashflow to manage.

To cut it short..Valad overgeared in the wrong sector in hindsight for them. They weren't the only bunny on the block! Lot's of other REIT's were running around at the same time applying the firehose to their burning backsides.
Some burnt but the survivors are still here.

Valad are trying to go back to core biz,it's been tough going holding off the lenders from calling in the chips.They have hung in and no doubt will cull/offload their toxic assets as quickly as they can..process underway.

Problem is this:

There is an oversupply of Industrial/warehouse property globally and Australia is no different. Lots of empty units around unsold and there is another round of valuations coming up in the next quarter..
Basically it's not a pretty picture short term.It's great for cashed up buyers..lots of once in a century opportunities available.

The other problem is financing.Loan restrictions for Industrial properties by the majors prohibit local buyers from buying into some great bargains because of LVR and servicability issues. I can tell you a lot of local buyers would have bought into Valad distressed properties but could not raise the $$$'s.

So what do you (Valad) do? ..capital raise? Firesale assets? Do a deal with friendlies? etc,etc,..Many ways to re-invent if you are a savvy operator.

Valad seem to have had enough intelligence to sort out a process to keep themselves alive and move towards core biz in Australia. This is good news for potential investors.

Anyway TJ 128..I could write a book on it all but to cut it short,no I do not have any shares ..a number of my friends have and asked me what I thought... I said I was waiting for the right timing before I purchased the shares in Valad..I just needed a couple of things to gel in my mind before I did that. That time is near.

Luckily this stock has has not had a run on it by intraday traders (rape and pillage types) to any great degree yet....otherwise I would not bother with thinking about investing in it.

Look, Valad has good property fundamentals in Australia and at the current price it is a bargain in my opinion considering the Asset base.

Industrial property should come back to normality mid next year and Commercial property should follow 3-6 months after that..providing we don't have a double dip GFC (global financial crisis). This could happen but, hey ,you will have a good ride before that may or may not happen.

Enjoy your night, good trading and remember

Cheers and

Caveat Emptor

All of the above are my opinions.

Like them or Lump them !!I don't care because I am enjoying a good drop of wine typing this .

the wine is responsible for any bad grama and speling!