Think this is spot on. One of those situations that seems too simple and good to be true. Great assets trading at a steep discount to any valuation method available, yet the prevailing abstract narrative, this time online shopping, overwhelms what’s happening in reality. People are heading back to the shops, shopping centres remain premium assets, yes they need to adapt and no they won’t grow rents 5% every year, but they’re not heading to oblivion soon as the URW share price implies.
Commercial real estate is always torched during recessions. Many people have made their fortunes buying at the bottom, when vacancies and prospects look grim.
In this situation we already know people are back shopping in Australia and the US, so why not Europe?
The share prices of SCG and US SPG, both comparable to URW, have recovered to current conditions, yet URW lags. Such negative sentiment, misaligned with the reality of shoppers going back to pre Covid habits, presents a great, classic, Benjamin Graham style investment opportunity here.
Xavier Neil obviously sees a good thing… $2bn in to a new industry is not small change, whereas no other large European investors seem to…. Yet he has more information than anyone else..
URW Price at posting:
$4.94 Sentiment: Buy Disclosure: Held
(20min delay)