Metro Holdings

(03-08-2012, 02:34 AM)GFG Wrote: Nope. In fact I m looking to add to my 90 lots if it goes below 0.73
The issue is everyone seems to b focussing on the dividends.
If they can deploy their cash well, I wouldn't mind a 2 cent dividend
And I actually agree with mangt hoarding cash now. When there are deals, cash is king. The question then is whether they can execute more deals with their cash. None of us here can say that for sure, but they do have a good track record so far.
Admittedly, the negatives include jopie Ong high remuneration and the falling tenancy of their tesco lifespace malls. I dont see the leasehold malls asa substantial negative right now. at the right price, I still see good value emerging. Bought my 90 lots at 0.64-0.645

glad to hear that u also noted their rather weak tenacy occupancy at the tesco partnership. jopie ong seems to have more charisma than gerald ong..when jopie moves on, i am not sure if they still can have that x-factor in clinching chinese deals.

sold some at 0.77 this morning...
let see how it goes

Most property stocks like Hong Fok, HPL , Wheelock.......are being traded at discount to NTA , Metro is not alone.
If no extraordinary gain from dispossal of aseet , special dvidend is unlikely to be declared, but JO will still take indecent salary and bonus.

(14-08-2012, 11:52 AM)cfa Wrote: Most property stocks like Hong Fok, HPL , Wheelock.......are being traded at discount to NTA , Metro is not alone.
If no extraordinary gain from dispossal of aseet , special dvidend is unlikely to be declared, but JO will still take indecent salary and bonus.

Did you guys notice the sudden large drop in the tenancy rates of 2 of the 5 malls?
GIE Tower, Guangzhou 94.8% -> 83.3%
Frontier, Tokyo 73.2% -> 55%

The tokyo office building actually has like only 5 tenants, mainly government agencies. I am guessing 1 tenant pulled out, resulting in the sudden drop. 55% is really very low...

(14-08-2012, 11:12 PM)GFG Wrote:

(14-08-2012, 11:52 AM)cfa Wrote: Most property stocks like Hong Fok, HPL , Wheelock.......are being traded at discount to NTA , Metro is not alone.
If no extraordinary gain from dispossal of aseet , special dvidend is unlikely to be declared, but JO will still take indecent salary and bonus.

Did you guys notice the sudden large drop in the tenancy rates of 2 of the 5 malls?
GIE Tower, Guangzhou 94.8% -> 83.3%
Frontier, Tokyo 73.2% -> 55%

The tokyo office building actually has like only 5 tenants, mainly government agencies. I am guessing 1 tenant pulled out, resulting in the sudden drop. 55% is really very low...

The Office building in Japan is a few storey bldg. each floor has one tenant as advised by Gerald Ong. Even since the Gov agancies moved out , Metro was unable to find new tenants. 73.2 % occupancy since FY 2011, and it has dropped to 55%. In no time it will become an empty bldg. Believe the previous owner knew why they need to offload this bldg.
In China, there are many empty bldgs also. I was in Chao Yang district of BJ last month , many shopping malls like ghost town, practically no human traffics. Guanzhou is not spared also, especially those properties in less favourite locations.

I m still holding onto 100 lots though.
Cash hoard is high while the real estate in china, particularly commercial is weakening
I expect a big purchase this FY, will be worried if there's no majoractivity this yr cos it means management has ran out of ideas and opportunities...

(15-08-2012, 01:45 PM)GFG Wrote: I m still holding onto 100 lots though.
Cash hoard is high while the real estate in china, particularly commercial is weakening
I expect a big purchase this FY, will be worried if there's no majoractivity this yr cos it means management has ran out of ideas and opportunities...

in the last 3-4 quarters property giants esp from hong kong have been sweeping land banks in china. looking at their non-controlling 10-15% JV with Tesco lifespace, it seems like they realli have run out gd ideas...haha
dunno next year AGM still have abalones for us?

u were in chaoyang district last month, then u would have been caught in the storms/flood..plus the police is stepping up on illegal stayers ..is no wonder commercial malls no body..

(15-08-2012, 10:33 PM)pianist Wrote:

(15-08-2012, 01:45 PM)GFG Wrote: I m still holding onto 100 lots though.
Cash hoard is high while the real estate in china, particularly commercial is weakening
I expect a big purchase this FY, will be worried if there's no majoractivity this yr cos it means management has ran out of ideas and opportunities...

in the last 3-4 quarters property giants esp from hong kong have been sweeping land banks in china. looking at their non-controlling 10-15% JV with Tesco lifespace, it seems like they realli have run out gd ideas...haha
dunno next year AGM still have abalones for us?

u were in chaoyang district last month, then u would have been caught in the storms/flood..plus the police is stepping up on illegal stayers ..is no wonder commercial malls no body..

Actually, I own 9 lots of Tesco as well, bought last yr when it fell substantially due to lower profit the Christmas sales.
I view the collaboration with Tesco favourably. Tesco is looking to expand in China, with flat growth prospects in Europe for the forseeable future. They are similar to Metro, but much larger. Expertise is in retailing and property development. They own several of the properties that their supermarkets are sited on. Metro can ride on the large brand name of Tesco, esp in a competitive market like China.

The other partner in the JV, the China/HK funds, I believe probably contributes significantly in other aspects besides providing funds. Both Tesco and Metro have funds and do not need a third party to provide funds. I believe they include the Chinese funds as a way to sniff out opportunities, as well as provide security.

My brief experience with Metro over the past year reminded me that Metro has not really changed for practically the last 5 years.

Metro has the best opportunity to reward and unlock value for shareholders this year and they missed it.

There is nothing wrong to hoard cash but to hoard so much demonstrated mgt's unwillingness to share. Furthermore Jopie's bonuses has always been a contentious issue.

Anyway, if we looked at the just released results - falling occupancy at GIE and the Japan property is a major concern. Given that Metro has not invested in new developments, the possibility of mega asset sales has already diminished and hence potential special dividends.

The steep discount to book value and even the strong cash per share means nothing if mgt does not proactively unlock shareholders' wealth.

Time has proven that the management is not that fantastic.
They sold the 27% stake in Ngee Ann city for S$380m, but it is worth almost 1b now and is being owned by Starhill Global Reit. They sold Gurney Plaza in Penang , now the price is more than double of what they have sold.
They paid almost S$100m for that property in Japan with an initial cap rate of 6.5% when occupancy rate was 100% , now with only 50% occupancy rate,this investment should be below par.The location of this property is not that good , so not that easy to find tenants to replace the existing one, unless they are prepared to accept low rental.