ARG - Argosy Property.

[Joshuatree]

Anyone intimate with ARGOSY comments. They are buying 2 GOvt buildings in Welly.Maybe dont own premium buildings but looks like stable divs. NTA above s/p Debt will drop below 40%.

[Joshuatree]

Have decided not for me, not enough cushion and note most prop stocks dropped away except for ARG. maybe risk off time with folks thinking fiscal cliff solution a done deal etc (honeymoon before the marriage? )and money leaving prop stocks for TEL etc.

[POSSUM THE CAT]

Joshuatree They bought the management contract back from ANZ but still kept the same staff that had been managing it for ANZ. It was not performing before so who would expect it to perform now with the same people managing it only now being paid by ARG instead of ANZ Management needs a BOMB under it IMHO.

[Joshuatree]

thanks for the heads up Possum.

[CJ]

Still, given it is trading at 94c, must be worthwhile for a quick trade.

December seems to have been a good month for those that can get their hands on placements. I assume Trademe was only institutions as no-one noted they got the call.

[POSSUM THE CAT]

Joshuatree Notice they did not approach all shareholders ( probably get told to go & fornicate with spiders) even cancelled The DRP for the current dividend pay able on 21/12/12

[RRR]

Poor communication from ARG. 2 properties for 180 million? They haven't mentioned the yield either? I am very confused and sceptical.

[noodles]

Poor communication from ARG. 2 properties for 180 million? They haven't mentioned the yield either? I am very confused and sceptical.
There is an attached preso on the nzx announcement. This contains more info than the text release

[noodles]

Anyone intimate with ARGOSY comments. They are buying 2 GOvt buildings in Welly.Maybe dont own premium buildings but looks like stable divs. NTA above s/p Debt will drop below 40%.

Proforma NTA is 85.6c. This is below the share price.

[Aaron]

Just got the share purchase plan. No details on the investments as far as I can tell. I own ARG, GMT, PCT & PFI (small holdings but large for me combined). My feeling is negative on property trusts as from my brief look at their financial statements lease income is going down although vacancy rates remain low which might indicate pressure on landlords to bring rents down if the economy is sluggish. My analysis is not indepth and I am happy to be corrected. it could be a sell down of properties. Internet has killed music shops & will probably kill bookshops possibly more as people use the internet more. My kids were showing me what they wanted for xmas and this included clothes from a UK store which I purchased online for the first time. A bloke at tennis buys grips online from overseas as they are cheaper than what he pays in a store in NZ. The change is gradual but it is happening. I think the property trusts have the prime spots so am happy holding for the long term but if inflation and then interest rates rise suddenly then unit prices will suffer.
In spite of this I will probably partake in the SPP unless someone convinces me otherwise. Possum could you elaborate on ARG mgmts underperformance.

[POSSUM THE CAT]

Aaron see if the Great Gold Guru will talk to you. Why pay to privatise the management of a trust and then keep all the same management staff on the same salaries. Just compare the share price increase or decrease Plus dividend return with say PFI.

[lysander]

Looked through the "Roadshow" presentation for Feb 2013 - all very interesting. A question though - does anyone understand what the $13M loss on derivatives is all about? This is actually Argosy's biggest expense.

[BlackPeter]

This looks like a busy thread ... well performing companies are probably too boring to talk about?

Anyway - their chairman seems to have noticed the recent SP drop and bought a handful (well - 100k) more ARG shares:

https://www.nzx.com/files/attachments/237950.pdf

On a different note - I went recently to the Argosy roadshow (hence my interest in the company) and was quite impressed by the presentation given by CEO and CFO: They provided an excellent overview of the commercial property market in New Zealand, outlining the risks and rewards relating to the different sectors within it. I was left with the feeling that this is a very well run investment company, offering steady and predictable returns.

Quite interesting look as well into the risks and future expectations for the (commercial) property market: What I found interesting is their observation that commercial companies (and government) keep squeezing more and more employees into the same space, resulting in a net reduction of commercial property demand. This in combination with a quite large number of currently ongoing building projects should in their view result in an oversupply of commercial buildings between 2022 and 2026; ARG tries to position itself for this overhang by timing their renewal dates accordingly ... might be interesting to see what the competition is doing.

Discl: The presentation was convincing enough to get me to put a toe into the water - bought a small parcel at 1.12 ...

[Beagle]

You just about gave me a heart attack BP with this thread mine. I thought WTF ?, why would they do a placement at 88 cps with the SP at $1.14 LOL
I hold and have done for quite some time. Nice "steady eddy" share that's good to have as part of a diversified investment portfolio. Sleep well with this one, unlike some others :eek2:
6% average compound growth rate in underlying EPS over the last 5 years impresses me. Internal management also a good business model. You did well to get in at $1.12.
PIE return is 5.35% at $1.14, forecast divvy 6.1 cps. This is effectively ~ 8% gross for those on a 33% tax rate. As good a place as any to hide from the storms of the investment markets and get a solid return in an ultra low interest rate environment.

[BlackPeter]

You just about gave me a heart attack BP with this thread mine. I thought WTF ?, why would they do a placement at 88 cps with the SP at $1.14 LOL
I hold and have done for quite some time. Nice "steady eddy" share that's good to have as part of a diversified investment portfolio. Sleep well with this one, unlike some others :eek2:
6% average compound growth rate in underlying EPS over the last 5 years impresses me. Internal management also a good business model. You did well to get in at $1.12.
PIE return is 5.35% at $1.14, forecast divvy 6.1 cps. This is effectively ~ 8% gross for those on a 33% tax rate. As good a place as any to hide from the storms of the investment markets and get a solid return in an ultra low interest rate environment.

Sorry for frightening you ... but this was the only thread I could find specifically on ARG. Yes - 1.12 was a great entry ... actually I even increased my bid slightly to 1.135, but than came this big seller and the broker put everything through at 1.12. How do they say ... life is not fair, but sometimes this is to our advantage.;)

Agree with your views on ARG ... this is money I normally would hold in bonds, but hard in today's climate to still find (low risk) bonds with a comparable return.

[BlackPeter]

just another director (Jeffrey Robert Morrison) loading up 88000 shares .... must be a good time to buy?

https://www.nzx.com/files/attachments/238039.pdf

[fungus pudding]

This looks like a busy thread ... well performing companies are probably too boring to talk about?

Anyway - their chairman seems to have noticed the recent SP drop and bought a handful (well - 100k) more ARG shares:

https://www.nzx.com/files/attachments/237950.pdf

On a different note - I went recently to the Argosy roadshow (hence my interest in the company) and was quite impressed by the presentation given by CEO and CFO: They provided an excellent overview of the commercial property market in New Zealand, outlining the risks and rewards relating to the different sectors within it. I was left with the feeling that this is a very well run investment company, offering steady and predictable returns.

Quite interesting look as well into the risks and future expectations for the (commercial) property market: What I found interesting is their observation that commercial companies (and government) keep squeezing more and more employees into the same space, resulting in a net reduction of commercial property demand. This in combination with a quite large number of currently ongoing building projects should in their view result in an oversupply of commercial buildings between 2022 and 2026; ARG tries to position itself for this overhang by timing their renewal dates accordingly ... might be interesting to see what the competition is doing.

Discl: The presentation was convincing enough to get me to put a toe into the water - bought a small parcel at 1.12 ...

They certainly seem to know what they are doing. I always go to their annual presentation, not that I think I'll learn much - just for the afternoon or morning tea. :D:D

[Beagle]

this is money I normally would hold in bonds, but hard in today's climate to still find (low risk) bonds with a comparable return.

Likewise and agree investment grade corporate bonds on a risk adjusted basis aren't as attractive. Might as well sign up for the dividend reinvestment plan like I have and add another 1% to your returns by virtue of the discount to VWAP price they're issued at. New units issued at $1.1289 isn't too shabby, (not done as well as you did !) compared to $1.15 this morning.

[BlackPeter]

http://www.sharetrader.co.nz/showthread.php?9365-Dunedin&p=629415&viewfull=1#post629415

Wednesday, 27 July, 5.30pm, ToiTu Otago Settlers Museum;

This is a late afternoon event with information for share holders about the NZSA

http://www.nzshareholders.co.nz/file...go%20flyer.pdf

Presentations given by

Peter Mence (CEO, Argosy Property)
John Hawkins (National Chairman, NZSA) and
Alan Clarke (CEO, Hellaby Holdings Ltd)

If you live in or close to Dunedin (or just happen to be there) - why not pop by and talk with and listen to the CEO of Argosy property and the people for of the New Zealand Share Holder Association - they are an independent voice for retail shareholders (and for many retail investors the only voice they've got) at AGM's and around company boards!

Plan for roughly 90 minutes. Attendance is free. It would help however (for catering purposes) if you register in advance at http://www.nzshareholders.co.nz/

We hope to see you there ...

[BlackPeter]

... another $600k to the bottom line as gain from selling non core assets:

https://www.nzx.com/companies/ARG/announcements/290682

I guess its not overwhelming news, but much better than a book loss ...

[Beagle]

... another $600k to the bottom line as gain from selling non core assets:

https://www.nzx.com/companies/ARG/announcements/290682

I guess its not overwhelming news, but much better than a book loss ...

Better than a poke in the eye with a sharp stick that's for sure. I hold and am wondering if the decline to 52 week lows is a little overdone ?

I get it that the market is a little worried about the fact that we may be at the bottom of the interest rate cycle, certainly from an international perspective but with RBNZ looking to cut next month and a current PIE exempt return of 6.1 / 106 = 5.75% = 8.58% gross for 33% taxpaying shareholders I would have thought we'd found a floor at the current level.

Interesting to note that ARG has grown underlying earnings per unit by a CAGR of 6% per annum for the last five years. A somewhat misunderstood and very conservative investment in my opinion.

[BlackPeter]

Better than a poke in the eye with a sharp stick that's for sure. I hold and am wondering if the decline to 52 week lows is a little overdone ?

I get it that the market is a little worried about the fact that we may be at the bottom of the interest rate cycle, certainly from an international perspective but with RBNZ looking to cut next month and a current PIE exempt return of 6.1 / 106 = 5.75% = 8.58% gross for 33% taxpaying shareholders I would have thought we'd found a floor at the current level.

Interesting to note that ARG has grown underlying earnings per unit by a CAGR of 6% per annum for the last five years. A somewhat misunderstood and very conservative investment in my opinion.

Looks like there are some investments we can agree on ...;); I couldn't resist to buy some more at 106.5 ... and yes, this is the conservative part of my portfolio I used to put into bonds - at times when you still got a return from them worthwhile mentioning.

While ARG might go down slightly if & when bond interest rates are returning above 6% or so again (not sure, I expect that anytime soon), would I think that they are a quite safe investment even if the markets decide at some stage to rerun the GFC ... it would take a lot to push a material number of their customers at the same time out of business, and even than would they still have the buildings.

[Snow Leopard]

Yesterday (when all my troubles seemed so far away) I sold my ARG (to buy more Grrrhhhh :D)

Some of that I tipped into a few more EBO shares - I do rash things from time to time.

So EBO is now slightly more than 10% of the portfolio and that is enough.

Best Wishes
Paper Tiger

That was 14-Sep-16 when I posted that.

Short term that turned out to be a great move. Hopefully long term too.

Subsequently I have sold all of my GMT, KPG & SPG as well, and own nothing in this sector. Again a good short-term move.

Basically I see much more downside than upside to listed property and am churning the money into likely looking ASX listed small/medium caps & (more importantly) foreign travel over Xmas & New Year.

Best Wishes
Paper Tiger

[Beagle]

ARG NTA as at balance date was $1.04. Taking into account interest rate decreases since then I'd expect their current NTA with a slightly more favourable market capitalisation rate on their building lease income to be approx. $1.06-$1.07 so its basically trading at or slightly below NTA now.

The stripey one could well be right that it could correct below NTA but I am happy to hold a modest position for the dividend yield.

[Joshuatree]

NZ prop stocks down through 60 and 200DMA, RYM and co close behind.Same in AUS. Where this downward trend will end may take a while. Will keep a watch for the bend at the end of the trend.

[JeremyALD]

Will ARG be impacted by NZ Post House still being largely unoccupied since the earthquakes? Note that Kiwibank had moved out of that building. Not sure if losses will be covered by ARGs insurance cover?

[winner69]

Will ARG be impacted by NZ Post House still being largely unoccupied since the earthquakes? Note that Kiwibank had moved out of that building. Not sure if losses will be covered by ARGs insurance cover?

Understand floors Kiwibank occupied covered in asbestos and when / if they return it wont be to next year

Just street talk

Hopefully ARG covered.

[percy]

Interesting noting more divestments and reinvestments in today's announcement.
Positive they have made a new "mutually benefical long term relationship."
Interesting partner,with a growing NZ foot print.

[Beagle]

Interesting noting more divestments and reinvestments in today's announcement.
Positive they have made a new "mutually benefical long term relationship."
Interesting partner,with a growing NZ foot print.

Sale prices and premium to NTA of the regional properties sold was exceptional. Leasing land out at a 5% return is something I'm not especially keen to see them doing no matter who they are leasing it too.

[percy]

In that case buy more shares in ARG's partner's listed company.
NB.I believe ARG's partner brought the $8.6mil Wiri site for $4mil in 2015.
A very healthy development margin.!!!!..lol.

[Beagle]

Who is this partner company to which you refer Percy ?

[percy]

TRA.................Turners Automotive Group Ltd.
The property ARG brought from Turners, is Turners Wiri Truck and Machinery site,160 Roscommon Road,which ARG paid $8.6 mil.Interesting to note TRA paid $4mil for it in 2015.It is pleasing seeing TRA "book" the development margin.Great for ARG having a solid NZ listed company on a long lease.
As ARG's CEO,Peter Mence said,"We are pleased to have commenced what we envisage to be a mutually benefical long-term relationship with an organisation that has a significant real estate footprint accross NZ".
TRA's interim at the end of the month should be "interesting".
TRA's future large [more than possible] developments in ChCh and Auckland will most probably be on sold to ARG.
Couta1 may be right with TRA's "target price".......lol.

[Beagle]

ARG may have paid too much for that site as land values in South Auckland have not increased that much. A 5% net yield isn't great. Definitely something I will be bringing up at the next ARG shareholder investor day. https://www.aucklandcouncil.govt.nz/property-rates-valuations/Pages/rates-details-results.aspx?an=12345402517
I have a client with some industrial land near to that location and we feel the real value is ~ 25% above Council value. On that basis ARG may have overpaid but its a funny market and some properties are selling for below 5% gross yields with much weaker leases than what ARG have signed up TRA too.
What this suggests to me, (and as alluded too in ARG's recent investor presentation) is that industrial cap rates have definitely declined. Further evidence is provided by the substantial premium ARG achieved above 31 March 2018 book values for their regional properties sold.

I think we could see a cracker result inclusive of revaluation gains for ARG next week. NTA could show a material increase above its current level of $1.12.
This remains my preferred property stock as its trading at a material discount to 30 Sept 2018 net asset backing.

[RTM]

ARG have obviously paid too much for that site as land values in South Auckland have not increased that much. A 5% net yield is pathetic. Definitely something I will be bringing up at the next ARG shareholder investor day.

Jeeze....they should have checked with you before they bought it Beagle ! What were they thinking?

[Beagle]

Jeeze....they should have checked with you before they bought it Beagle ! What were they thinking?

Yes I toned that post down a bit after recalling that some deals are going through at under a 5% yield. Shortage of commercial sites in South Auckland ? Maybe they're hoping TRA will develop it but they've probably got their own idea's like shifting a shipping container onto it lol
Definitly a subject to bring up at the next ARG investor day.

[percy]

Jeeze....they should have checked with you before they bought it Beagle ! What were they thinking?

My thoughts too....
What do they say about property values.?
The value is governed by the quality of the tenant.
ARG know the value of Turners, and "benefit ofl long-term relationships."

[percy]

Yes I toned that post down a bit after recalling that some deals are going through at under a 5% yield. Shortage of commercial sites in South Auckland ? Maybe they're hoping TRA will develop it but they've probably got their own idea's like shifting a shipping container onto it lol
Definitly a subject to bring up at the next ARG investor day.

Google Turners Wiri,and you will note Turners have developed the site.[to suit Turners requirements].

[Beagle]

TRA.................Turners Automotive Group Ltd.
The property ARG brought from Turners, is Turners Wiri Truck and Machinery site,160 Roscommon Road,which ARG paid $8.6 mil.Interesting to note TRA paid $4mil for it in 2015.It is pleasing seeing TRA "book" the development margin.Great for ARG having a solid NZ listed company on a long lease.
As ARG's CEO,Peter Mence said,"We are pleased to have commenced what we envisage to be a mutually benefical long-term relationship with an organisation that has a significant real estate footprint accross NZ".
TRA's interim at the end of the month should be "interesting".
TRA's future large [more than possible] developments in ChCh and Auckland will most probably be on sold to ARG.
Couta1 may be right with TRA's "target price".......lol.

Incorrect. They paid $4.8m for it in 2016. https://www.nbr.co.nz/article/turners-buys-industrial-land-wiri-south-auckland-48m-b-192486

Some silly deals being done presently on silly yields...ARG's latest is one of them...but their two sales at prices substantially over book value suggest others are playing silly buggers with their buying too ! All this augers well for ARG's upcoming half year result.

[percy]

So what.
$4mil in three years is a very healthy gain.

[Beagle]

Try and be accurate please. There's a 20% difference between $4.0m and $4.8m. Maybe being a bean counter I am a little fixated with the detail because I have to be in my job but there's no way $4.8m rounds down to $4m. I agree TRA have done well probably mostly because they got it very cheap in 2016. (Distressed sale at that time perhaps ?) So yes, kudos to TRA who have done well making a $3.8m gain less transaction costs.

[percy]

Sorry I am enjoying myself too much to be perfect...!

ps Also got the 3 years wrong.
The $4 mil profit was over 2 years.
Wonder you did not pick that up too.?

[Beagle]

See #38 Percy. I did pick it up and yes a $3.8m gain in just over 2 years less transaction costs suggests TRA bought extremely well at the time. Its also suggest that the current cap rates on industrial property have hit a new low point which is supportive of my contention we will see a cracking interim result for ARG next week.
More to the point with this thread is the whopping 25% premium ARG got on their El Prado drive property in Palmerston North, such a big premium above independent registered valuation as at 31 March 2018. https://www.nzx.com/announcements/326751

Also worthy of a mention is yet another very high caliber appointment to ARG's board announced today http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARG/326816/290417.pdf I must say their leadership team and board really impress with their depth of experience.
If they paid such a price for the 160 Roscommon road acquisition there's probably a good reason for that but it can't hurt to ask them at the next investor day.

[RTM]

Will ARG be impacted by NZ Post House still being largely unoccupied since the earthquakes? Note that Kiwibank had moved out of that building. Not sure if losses will be covered by ARGs insurance cover?

....And from Winner. “Understand floors Kiwibank occupied covered in asbestos and when / if they return it wont be to next year

Just street talk

Hopefully ARG covered”

Was this resolved ? Could it still impact ARG ?
Anyone know ? Considering buying some.

[Fred_Rubble]

In regards to Wiri - widely accepted market return on land is 5%. Rent of $430,000, pa ($27/sqm) - broadly reflective of industrial yard rents.

15 year lease with fixed rental growth. Strong tenant. Looks good to me.

Also establishes that relationship whereby the site could be developed down the track for Turners.

discl - long time holder of ARG.

[percy]

In regards to Wiri - widely accepted market return on land is 5%. Rent of $430,000, pa ($27/sqm) - broadly reflective of industrial yard rents.

15 year lease with fixed rental growth. Strong tenant. Looks good to me.

Also establishes that relationship whereby the site could be developed down the track for Turners.

discl - long time holder of ARG.

The site has already been developed by Turners to suit their requirements.
A very prominent corner site,ideal for Turners Trucks and Equipment sales.
Having established a trading history there, Turners know what rent they are prepared to pay,otherwise they would have kept it.

[Fred_Rubble]

Is the property they brought not 133 Roscommon Road? - maybe where the confusion of good/bad buy is emanating.

https://www.colliers.co.nz/news/2018/large%20wiri%20industrial%20site%20with%20future%2 0upside/

[Beagle]

Details details...133 Roscommon road and 160...just 20% difference, who cares :p

[percy]

Love it.
Caught out.
The Trucks must be at 160 not 133.
160 is the better site.
Thanks Fred and Beagle.
Good price for 133.
Wonder what 160 would be worth.?

[Beagle]

Love it.
Caught out.
The Trucks must be at 160 not 133.
160 is the better site.
Thanks Fred and Beagle.
Good price for 133.
Wonder what 160 would be worth.?
Going off the difference in the government values as recorded by Council (133 Roscommon road $6.1m and 160 $5.65m) its well under your 20% margin of error so no difference lol.

Anyway...getting back to more serious business. I think their NTA to be reported next week as at 30 Sept 2018 will be at least $1.15, (you read it from me first) and trading cum a 1.56 cps PIE (tax exempt) dividend next month at $1.10 this is pretty safe value buying in a volatile world so I topped up this afternoon.
Interestingly the gain on the property sales announced yesterday on their own add nearly 1 cps to the NTA taking it to just over $1.13. Add in commentary from the company in their most recent presentation in late October that industrial yields have fallen and factor in the extent of this as indicated by recent sales and provided there is no major exogenous shock to the market $1.10 cum divvy looks a bit too cheap to me.

[Fred_Rubble]

Love it.
Caught out.
The Trucks must be at 160 not 133.
160 is the better site.
Thanks Fred and Beagle.
Good price for 133.
Wonder what 160 would be worth.?

160 much better isn't it - 133 elongated shape not the best, but good income for 15 years.

Many thanks to both of you for the many great comments I have read over the years from you both.

Looking forward to the ARG results.

[percy]

Well team the fun continues..Roscommon Road ia a popular road for TRA to buy properties.
10th September 2015 announcement...TRA buy property in Roscommon Road for.................. ....$4 mil........................................[Must be No.133]
3rd August 2016 announcement....TRA buy property cnr Roscommon Road and Vogler Street for $4.8mil........................................[Must be No.160]
13th November 2018.ARG announce they have brought a property in Roscommon Road from TRA for $8.6mil...yes you guessed it.....[Must be No.133]
So TRA buy 133 Roscommon Road for 4mil, and three years later sell it with lease back for 15 years at $8.6mil. Win win situation for happy "partners."

[BlackPeter]

Well team the fun continues..Roscommon Road ia a popular road for TRA to buy properties.
10th September 2015 announcement...TRA buy property in Roscommon Road for.................. ....$4 mil........................................[Must be No.133]
3rd August 2016 announcement....TRA buy property cnr Roscommon Road and Vogler Street for $4.8mil........................................[Must be No.160]
13th November 2018.ARG announce they have brought a property in Roscommon Road from TRA for $8.6mil...yes you guessed it.....[Must be No.133]
So TRA buy 133 Roscommon Road for 4mil, and three years later sell it with lease back for 15 years at $8.6mil. Win win situation for happy "partners."

Interesting ... just wondering based on this set of data: Who of the both companies appears to be the better property investor?

ARG any good in selling cars?

[percy]

Interesting ... just wondering based on this set of data: Who of the both companies appears to be the better property investor?

ARG any good in selling cars?

If you can find the history of Dorcester Pacific Property some where, you will see just how clever Paul Bryne was is returning capital to investors from a rat bag collection of 3rd rate properties. One of the main reasons I invested in TRA.
From what I can gather ARG are very astute property investors,and are happy to leave car sales to others.
I do note a lot of ChCh successful property investors are ex car dealers.

[Beagle]

Well team the fun continues..Roscommon Road ia a popular road for TRA to buy properties.
10th September 2015 announcement...TRA buy property in Roscommon Road for.................. ....$4 mil........................................[Must be No.133]
3rd August 2016 announcement....TRA buy property cnr Roscommon Road and Vogler Street for $4.8mil........................................[Must be No.160]
13th November 2018.ARG announce they have brought a property in Roscommon Road from TRA for $8.6mil...yes you guessed it.....[Must be No.133]
So TRA buy 133 Roscommon Road for 4mil, and three years later sell it with lease back for 15 years at $8.6mil. Win win situation for happy "partners."

I'm getting dizzy lol.

[Fred_Rubble]

Assuming the land is still worth $4m as per Turners paid in 2015 for 133 Roscommon.

Simple present val calc of the growing rental income (2.5% pa) over 15 years = $4,539,559.

Total = $8,539,559 - not far off. Maybe some land value growth in there since 2015?

Win/win I deduce. ARG gets long term tenant security - good result for portfolio WALE and good tenant covenant.

TRA occupy the site they want to occupy without having capital locked in the land.

[percy]

Assuming the land is still worth $4m as per Turners paid in 2015 for 133 Roscommon.

Simple present val calc of the growing rental income (2.5% pa) over 15 years = $4,539,559.

Total = $8,539,559 - not far off. Maybe some land value growth in there since 2015?

Win/win I deduce. ARG gets long term tenant security - good result for portfolio WALE and good tenant covenant.

TRA occupy the site they want to occupy without having capital locked in the land.

Bit more fun for you.
TRA buy property for $4 mil sell it for $8.6 mil,repay the $4mil they borrowed to buy the property,and use the profit [$4.6mil] to pay the rent for the next 15 years.
lol.

[Beagle]

But under the new accounting standard accounting for lease obligations that comes into effect in due course, future lease costs are accounted for as liabilities so they've actually made nothing on their balance sheet but will record a profit in their profit and loss statement, probably above the line as ordinary profit from operations knowing them. TRA seem quite good at this sort of creative accounting...I seem to recall a list of unusual and extraordinary items that Snoopy said quite significantly bolstered their FY18 result. Judging by their SP still in the deep doldrums it would appear they may need the help for the FY19 year.
Disc: Own stakes in both companies but a LOT more ARG than TRA.

[percy]

A sizable profit however it is accounted for by our resident Beagles..

[Beagle]

Not sure what Mr Market is trying to tell us about vehicle retailers at present and what to make of it all but one thing is for sure, they all need buildings and sites to work from so ARG gets a tick as a safe place to hide from this choppy and volatile market.
TRA not the only one to be in deep doggy doo territory, check out the chart of the big listed car retailer AHG on the Aussie market. Ouch that looks like an ugly pig dog with mange.
On the other hand Colonial Motors keeps on trucking on like the big rig Kenworth trucks they sell.

[percy]

I can't wait for TRA's interim result on the 27th November.
I am sure it will show their business model is on track.
Comparing AHG with TRA is a bit like comparing AOG with OCA.
Interesting maybe,but little if any correlation.

[Beagle]

I'm more interested in ARG's result on 20th which I expect to be rock solid. On the other hand I am expecting that in FY19 for TRA we will see the old problematic MTF legacy loans take a sizeable bite out of earnings. How much they bring to account in the unaudited first half is anyone's guess but I expect reality to bite with the audited full year result. TRA also belatedly acknowledged recently that the first quarter had been tough and we know business and consumer confidence has been very low. I am worried about TRA's pending result. The market is trying to tell us it won't be good. I think many of TRA's business initiatives won't start to bear fruit till the second half and more clearly in FY20.

[percy]

Yes TRA have work in progress.
1] Legacy MTF loans.
2] Clearing out old legacy Buy right cars stock.
3] Adjusting Autosure rates to suit vehicle insured.
4] Upskilling auction staff to sales staff.
I expect the result will confirm their strategy is on course.
Roscommon Road sale should add that little bit extra excitement to the result,as will the fact they will be working with ARG..
I only know of one analyst who has picked it up so far,and was kind enough to share with me.

[Beagle]

Yes TRA have work in progress.
1] Legacy MTF loans.
2] Clearing out old legacy Buy right cars stock.
3] Adjusting Autosure rates to suit vehicle insured.
4] Upskilling auction staff to sales staff.
I expect the result will confirm their strategy is on course.
Roscommon Road sale should add that little bit extra excitement to the result,as will the fact they will be working with ARG..
I only know of one analyst who has picked it up so far,and was kind enough to share with me.

Rome wasn't built in a day was it :)

[couta1]

Rome wasn't built in a day was it :) No but it will be destroyed in a day, Rev 18:8-19

[percy]

Rome wasn't built in a day was it :)

Neither was any great NZ company,such as EBO,MFT, RYM or a great number of others.

[peat]

I note that Milford Active Growth reduced their ARG holding in October. These guys know their stuff and do well.
I note that ACC invested at a similar time. These guys usually get it wrong.
Also ANZ reduced around that time

However NTA will certainly have been boosted following some property divestment at above book value.

[Beagle]

I note that Milford Active Growth reduced their ARG holding in October. These guys know their stuff and do well.
I note that ACC invested at a similar time. These guys usually get it wrong.
Also ANZ reduced around that time

However NTA will certainly have been boosted following some property divestment at above book value.

FWIW I rate ACC peat, certainly over and above Milford but of course for some strange reason I prefer my own analysis :D

[Fred_Rubble]

Neither was any great NZ company,such as EBO,MFT, RYM or a great number of others.

including HGH (HBL) :)

[percy]

including HGH (HBL) :)


How on earth could I have missed them.?
Again well spotted..!...lol.

[Snoopy]

Well team the fun continues..Roscommon Road ia a popular road for TRA to buy properties.
10th September 2015 announcement...TRA buy property in Roscommon Road for.................. ....$4 mil........................................[Must be No.133]
3rd August 2016 announcement....TRA buy property cnr Roscommon Road and Vogler Street for $4.8mil........................................[Must be No.160]
13th November 2018.ARG announce they have brought a property in Roscommon Road from TRA for $8.6mil...yes you guessed it.....[Must be No.133]
So TRA buy 133 Roscommon Road for 4mil, and three years later sell it with lease back for 15 years at $8.6mil. Win win situation for happy "partners."



Bit more fun for you.
TRA buy property for $4 mil sell it for $8.6 mil,repay the $4mil they borrowed to buy the property,and use the profit [$4.6mil] to pay the rent for the next 15 years.
lol.


No interest in ARG for me. But I have a tidy little holding in TRA, so am interested in this transaction from 'the other side of the fence'. A 5.0% rent yield on an $8.6m property equates to :

0.05 x $8.6m = $430,000 rent per year. Over 15 years the total rent paid would be:

15 x $0.430m = $6.45m

From the Turners side of the fence, rent is tax deductible. So the 'after tax' cost to Turners is:

(1-0.28) x $6.45m = $4.6m (isn't that spooky)

So it looks like the $4.6m profit banked on the land sale by Turners does cover the rent, exactly as Percy suggests. Also Turners get their money upfront but ARG must wait fifteen years to get their full share of the same. A 'time value for money' adjustment from the Turners side is there to counter any future incremental rent increases from ARG.


In regards to Wiri - widely accepted market return on land is 5%. Rent of $430,000, pa ($27/sqm) - broadly reflective of industrial yard rents.

15 year lease with fixed rental growth. Strong tenant. Looks good to me.


$8.6m does sound a lot for a couple of mud covered rugby fields in outer outer Auckland. Yet, I am sure the ARG result will be every bit as good as some here are predicting. The thing that would worry me, if I was an ARG shareholder, is that I am being set up for a substantial fall in asset values 'when' interest rates rise again. And while I wouldn't like to predict when this will happen, some time within the next fifteen years looks likely.

Conclusion: I am glad to be on the Turner's side of this deal!

SNOOPY

[Beagle]

My view Snoopy is that interest rates will remain at or very close to record lows for the foreseeable future. Even if capitalisation rates do rise a bit if won't affect the level of increasing dividends ARG is able to pay.

Not sure if I posted a link to their investor presentation held late last month but here it is for anyone interested http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARG/325989/289413.pdf

[Beagle]

https://www.nzx.com/announcements/327068

Looks rock solid as expected and NTA now $1.17, (I predicted at least $1.15).
EPS growth exceeded my expectations and progress on the former N.Z. Post building in Wellington looks okay.
Trades cum a 1.56 cps tax free dividend next month (PIE distribution)
Compelling value at 7 cps below NTA in my opinion.
P.S. Gains on recent non core asset sales are to be included in 2H results adding close to another 1 cent per share to NTA so really its trading at an 8 cps discount to NTA based on yesterday's closing price of $1.10.

[peat]

interesting to see they have 2 year indemnity period for their business interruption insurance. Someone learned something from the Canterbury sequence. Longer indemnity periods can be expensive but it will be paying off on this occasion.

[Fred_Rubble]

Positive movements in a tough market. Take them where you can!

[Yoda]

https://www.nzx.com/announcements/327068

Looks rock solid as expected and NTA now $1.17, (I predicted at least $1.15).
EPS growth exceeded my expectations and progress on the former N.Z. Post building in Wellington looks okay.
Trades cum a 1.56 cps tax free dividend next month (PIE distribution)
Compelling value at 7 cps below NTA in my opinion.
P.S. Gains on recent non core asset sales are to be included in 2H results adding close to another 1 cent per share to NTA so really its trading at an 8 cps discount to NTA based on yesterday's closing price of $1.10.

Up to 1.30 now with few sellers. I decided to buy in due to the Divies and it seems to be on a steady increase after a slow year last year . It,s been a bit quiet on ST...

[BlackPeter]

Up to 1.30 now with few sellers. I decided to buy in due to the Divies and it seems to be on a steady increase after a slow year last year . It,s been a bit quiet on ST...

Good buying in March last year at $1 ;);

Not sure where the rise will end, but at the moment I am just enjoying the ride. Backward PE is close to 12.5 (i.e. you could argue - fairly valued) and forward PE a bit difficult to assess (with all this hype around property crashes), but at this stage the (fully imputed) dividend yield is still better than the return of most bonds would be ...

[Cricketfan]

Good buying in March last year at $1 ;);

Not sure where the rise will end, but at the moment I am just enjoying the ride. Backward PE is close to 12.5 (i.e. you could argue - fairly valued) and forward PE a bit difficult to assess (with all this hype around property crashes), but at this stage the (fully imputed) dividend yield is still better than the return of most bonds would be ...

Have to say ARG and GMT have been a couple of my best performers with both dividends and capital gains in the last few years. Wish I had bought more of these 'boring' shares.

[Beagle]

Up to 1.30 now with few sellers. I decided to buy in due to the Divies and it seems to be on a steady increase after a slow year last year . It,s been a bit quiet on ST...

Very pleased with how this really "boring" stock has been going. Happy holder.

[winner69]

Very pleased with how this really "boring" stock has been going. Happy holder.

Man from Forsyth Barr said on the radio this morning now might be a good time to lock in the wealth that’s has been created from property companies (wasn’t really paying too much attention but I think he said they were becoming more ‘riskier’ and the futures gains v risk didn’t stack up)

[Beagle]

Thanks mate but I stopped listening to anything Forsyth Barr had to say many years ago.

[macduffy]

Man from Forsyth Barr said on the radio this morning now might be a good time to lock in the wealth that’s has been created from property companies (wasn’t really paying too much attention but I think he said they were becoming more ‘riskier’ and the futures gains v risk didn’t stack up)

I wasn't listening very intently either - too early in the morning! - but the impression I got was that the caution was directed at "risk", generally, now that the NZX50 had topped the 10k mark. I didn't hear "property companies" mentioned specifically but stand to be corrected by anyone more awake!

[Beagle]

Makes common sense to spread some capital around now, overseas, especially with the potential for the Kiwi dollar to keep falling.

[winner69]

Makes common sense to spread some capital around now, overseas, especially with the potential for the Kiwi dollar to keep falling.


For most here risk is a rather subjective thing anyway


Doubt if any do a Sharpe Ratio for their portfolio - let alone do an Efficient Frontier exercise is see whats the best risk adjusted return is

[Beagle]

https://www.nzx.com/announcements/333670 Looks like this development is on sound metrics.

[Yoda]

Yep , sounds good Beagle, Costs 64 valued at 94...... lets see if they keep to budget, good returns too.
shes a steady plodder this one and a reasonable PE at the moment, and nice quarterly div.

[Fred_Rubble]

Very solid development.

[Beagle]

Looking forward to the annual result tomorrow. ARG has been a quiet but fairly impressive performer in my portfolio this last year and the chart looks impressive too !
10554

[777]

GMT beats it over 2 years.

I hold both.

[Beagle]

I very recently sold out of GMT (having done very well) as its now trading at a substantial premium to NTA and yet again, (must be 4 or 5 years in a row now) the annual dividend has not been increased.
I also noted in the annual report the adjusted earnings now that the manager is no longer taking shares in lieu of management fees would have been just 6.2 cents per unit for FY19.
Gross rental income has been steadily decreasing year after year. I believe GMT has run ahead of itself and is trading at about 10% above my assessment of fair value.

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARG/334898/300302.pdf

Good solid result. Gross effective yield of ~ 7% for those on a 33% tax rate.

[Beagle]

http://www.sharechat.co.nz/article/fdb2a5e0/argosy-annual-profit-climbs-36-on-revaluation-gains-pays-slightly-bigger-dividend.html?utm_medium=email&utm_campaign=Argosy%20annual%20profit%20climbs%203 6%20on%20revaluation%20gains%20pays%20slightly%20b igger%20dividend&utm_content=Argosy%20annual%20profit%20climbs%2036 %20on%20revaluation%20gains%20pays%20slightly%20bi gger%20dividend+CID_fc3f064089efb4d97e3b6a20616004 fe&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticlefdb2a5e0argosy-annual-profit-climbs-36-on-revaluation-gains-pays-slightly-bigger-dividendhtml

[RRR]

Is someone shorting ARG? A sizable drop at the close! I submitted a buy order towards the close for 1.35 but I was sold at 1.32 (pleasantly surprised to see the contract note from ASB). Anyone had similar experience.

[Beagle]

I hold a modest stake but have no insight as to what happened on the close. Just looks like it hit an air pocket. I would expect it to revert to the mid 130's tomorrow and I think its a sound hold for dividend income at that level. REIT's not exactly flavour of the month right at the minute.

[percy]

Craigs research 20th November;"High gearing,flat dividend,downgrade to sell" may have helped caused weakness.

[Beagle]

High gearing LOL.
Capital Management
At 30 September 2019, Argosy's debt-to-total-assets ratio, excluding
capitalised borrowing costs, was 36.2% versus 35.6% at 31 March 2019. The
ratio reflects the net impact of acquisitions and developments during the
period, offset by revaluation gains. The ratio also excludes the lease
liability and right of use asset at 39 Market Place of $41.8 million,
recorded in the period for the first time under NZ IFRS 16.

36% gearing is well within predetermined limits and very conservative for a property company in this interest rate environment.
Yes GMT and some others are lower but I don't think that necessarily in shareholders best interests.

Average analyst view is $1.34. https://www.marketscreener.com/ARGOSY-PROPERTY-LTD-10859583/consensus/
Dividends have gone up slightly in recent years. Fully tax paid PIE yield is 4.76% at the current price which is 7.1% gross for taxpayers on a 33% tax rate. I think that's a very satisfactory yield for a modestly geared well diversified property company and I note ARG is to the best of my knowledge the only property company to trade at such a very modest premium to NTA which is now $1.28. Happy holder.

[RRR]

https://www.goodreturns.co.nz/article/976515970/msci-reweighting-drives-mammoth-volume-on-nzx.html?utm_source=GR&utm_medium=email&utm_campaign=GoodReturns+Market+Report+for+26+Nov+ 2019

Now it is clear why such a spike in volume..

[Fred_Rubble]

Is someone shorting ARG? A sizable drop at the close! I submitted a buy order towards the close for 1.35 but I was sold at 1.32 (pleasantly surprised to see the contract note from ASB). Anyone had similar experience.

Very shrewd based on today's closing price.....

[RRR]

Very shrewd based on today's closing price.....

Hi Fred_R. I was just lucky! I am after decent yield, capital gain is just icing on the cake..

[Beagle]

https://www.goodreturns.co.nz/article/976515946/has-property-had-its-day-in-the-sun.html?utm_source=GR&utm_medium=email&utm_campaign=GoodReturns+Market+Report+for+5+Dec+2 019
Interesting article.

[Cyclical]

I assume this is the right place for Argosy stuff...

Pretty handy result and divvy. Of course I sold my shares earlier in the week :-/

https://www.nzx.com/announcements/353358

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARG/353358/322800.pdf

Very pleased they are able to maintain their dividend for FY21. That's a rare thing these days and underscores the resilience of their business.

[Benny1]

I assume this is the right place for Argosy stuff...

Pretty handy result and divvy. Of course I sold my shares earlier in the week :-/

https://www.nzx.com/announcements/353358
I might have bought yours!
Grabbed a few on Monday... Held these a few years ago and probably wished I held on to them.
Back in now and will quietly park them in the bottom drawer.. Will grab some more on any price weakness over the next year or so.
Sometimes the companies that are a little boring and fly under the radar are the way to go!

[King1212]

Did not buy enough......was afraid they would capital raise....but we'll...happy holder ..not be greedy

[Waltzing]

Took all profits and GGT and PCT and rolled them into ARG. we will see later in few years if it was the right call.

[Beagle]

I might have bought yours!
Grabbed a few on Monday... Held these a few years ago and probably wished I held on to them.
Back in now and will quietly park them in the bottom drawer.. Will grab some more on any price weakness over the next year or so.
Sometimes the companies that are a little boring and fly under the radar are the way to go!

+1, agree 100%. Boring and reasonably predictable is great in these highly uncertain times ! At $1.11 and 6.35 cps annual divvy that's a 5.72% PIE exempt net yield = 8.54% gross for those on a 33% tax rate. What's not to like.

[NZSilver]

Been buying a position for the last month for an Ave buy price of 96c. Pleasing result

[oldtech]

Been buying a position for the last month for an Ave buy price of 96c. Pleasing result

Well done, my average buy price is slightly higher at $1.016. Got slightly caught out in late April when I bought a bit high but overall still happy.

[dibble]

+1, agree 100%. Boring and reasonably predictable is great in these highly uncertain times ! At $1.11 and 6.35 cps annual divvy that's a 5.72% PIE exempt net yield = 8.54% gross for those on a 33% tax rate. What's not to like.

I notice recent syndicate ads tout returns of under 6% recently. It would be an interesting call to invest in a single second rate asset with no exit strategy and weaker legislation (eg reporting) cover when you can buy into ARG for over 8% with better risk spread, governance and and liquidity. Perhaps the monthly payout is enough to lure people in...

[NZSilver]

They looked relatively attractive a few months ago, not now though the listed property companies are trading at such a discount.

[Beagle]

I notice recent syndicate ads tout returns of under 6% recently. It would be an interesting call to invest in a single second rate asset with no exit strategy and weaker legislation (eg reporting) cover when you can buy into ARG for over 8% with better risk spread, governance and and liquidity. Perhaps the monthly payout is enough to lure people in...

A lot of elderly people don't like or understand shares. They see an advertisement in the newspaper for syndicated commercial property with a pretty picture and a promise of 6% return paid monthly and they need the income and they compare it to the 2.5% on term deposit available with the bank and they think, property has been good to me and 6% is more than twice the income, that'll do me. Often that's all the thinking that goes into it, which is pretty sad.

[Waltzing]

Absolutely loving this one as sold GMT and PCT profit and rolled heavily into this ....

[macduffy]

A lot of elderly people don't like or understand shares. They see an advertisement in the newspaper for syndicated commercial property with a pretty picture and a promise of 6% return paid monthly and they need the income and they compare it to the 2.5% on term deposit available with the bank and they think, property has been good to me and 6% is more than twice the income, that'll do me. Often that's all the thinking that goes into it, which is pretty sad.

Too true, Beagle. About 35 years ago I talked myself into buying a share in a syndicated shopping centre in Royal Oak. It proved to be too small to be competitive and sank without trace. Lesson learned.

:(

[Beagle]

Yeah, sadly its often the promotors that do the best from these small syndicated property deals.

I topped up with some more ARG today. 5.34% net as a PIE fund = 8% gross for taxpayers on a 33% tax rate. Company is confident of its ability to pay that going forward and term deposit rates for one year are now less than 2% at most banks, less tax.

NTA is $1.30 and I think the current price fairly reflects the risk of tenant defaults and support required.

[dameofdiv]

Not sure if this is the right place to ask:
I bought second ARG parcel on 5 June and settled on 9 June. Record date is 10 June. Why am I not entitled to the dividend on this second parcel?

[Beagle]

You are entitled to it. Check your dividend statement which you should have by now and if its not correct take the matter up with the registry at computershare.

[dameofdiv]

You are entitled to it. Check your dividend statement which you should have by now and if its not correct take the matter up with the registry at computershare.

The statement only showed the first parcel. Thank you, I will follow it up with them right away. :)

[Waltzing]

Sometimes the parcels dont get registered. I had this problem recently for KMD and the broker made up the difference due to time frames and the registry. Also some reporting from some brokers no longer have the order no in the reports as we had software that tracked the order no.

[dameofdiv]

Yes thank you, you are right. The broker, Directbroking has paid the dividend instead.

[Cyclical]

This one solders along quietly, up 4 cents today off the back of news of directors accumulating for the second time this month.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARG/356734/326913.pdf

[Waltzing]

i hope so, wonderful term deposit replacement.

[Beagle]

i hope so, wonderful term deposit replacement.

I think that's hits the nail well and truly directly on the head.
I attended the annual meeting at the RNZYS at Westhaven marina this afternoon and struggled to stay awake to be honest. This must be the most boring company I own and so predictable.
One of the few property companies to provide guidance at the same level for the forthcoming year as for the previous year, (lots of talk and excuses from others like KPG and GMT why their dividends have to be cut and caveats regarding future dividends).
Driving home I reached the exact same conclusion as you have. Many people will be like me and have taken a conservative approach to riding out the effects of Covid 19 by selling some shares in February / March and putting the proceeds on term deposit for 4-6 months and will be faced with ~ 1.75% term deposit rollover rates, less tax which for many will mean a net return of just 1.17%.

Or...there's ARG with its 5.0% PIE yield which is non taxable in shareholders hands. There might be another green bond issue later this year, (I asked at the annual meeting), but I think that's likely to be circa 2.5 - 3.0% and that's taxable income in bondholders hands.

Disc: This share bores me to tears...but its good to have something really boring and predictable in your portfolio. I am favourably inclined to add some more when my term deposits mature in the next couple of months. I will not invest in term deposits for a net 1.17% return and accept the OBR risk that goes with that for such a woefully pathetic return that will not even keep up with inflation.
The scones were very fresh but refreshments otherwise were unremarkable. America's cup looks good in its case at the RNZYS. Hope its there this time next year :)

[NZSilver]

trading back near NTA now. Good run up.

[Beagle]

Yes remarkably good considering the reemergence of Covid since my last post above.

[Cyclical]

Someone looks to have been pretty keen to acquire a good chunk of this at the end of the day's trading...

[Waltzing]

are very happy to moved into our largest holding in NZ back in April May. If your looking for a defensive stock its starting to do its

[Waltzing]

1.37! this morning! Everyone holding congratulations for not hitting the panic sell button on wellington and auckland commercial property market.

DISC: Rolled into ARG back in march april from GMT and PCT. Trade this sector and also hold long in fenced trusts. No plans to sell once of our largest holdings in NZX.

[NZSilver]

Trading at 1.35 (now a little premium to NTA). Note NTA may drop on next results with revaluation but dividend (or yield), paid from cash and sustainable, paid quarterly will make this attractive and therefore share price could even move higher as interest rates go lower. I note most other listed property trusts trade at a larger premium to NTA

[Waltzing]

FROM MR BEAGLE: and i quote, "This share bores me to tears" yes and to think i was thinking of buying some more in the No 3 portfolio at 2.24 just the other day with an order on the market. Lucky we rolled all our property shares from GMT , PCT and HGH into ARG at 1.17 back in may. This electric train has left the station and is now out pacing OCA by several train stations. Very very happy we took what for us is a good defensive position as i expect this to break new highs next year if we go negative interest rates. The government made a big mistake by not talking to MR O about direct bond treasury purchases backing themselves and him into a corner. He opened the door to the future and the politicians blew it.

Price Closing at 1.39.

very pleased we chose this over OCA as our defensive line in the sand.

I bet those who bought at the lows are now ordering there new electric car.

[Beagle]

Awesome to see this being rerated.

[NZSilver]

Not far of crossing 1.40 mark, this could go a lot further based in interest rates alone

[Waltzing]

The public is still in denial of the future as far as bank interest rates and hoping for vaccine in january. The effects of the global shut downs will mean low interest rates for years to come is stating the obvious and really ARG is still very undervalued and should be north of 160 already. GMT is still a good trade and attracting investors as industrial south auckland is the place to be for an expanding golden triangle.

[Cyclical]

The market doesn't seem to be too impressed with today's announcement, unless it's just a spot of profit taking. Almost tempted to top up...

I can't post the link as NZX site not playing ball, but from ASB:

Argosy has announced today that it has unconditionally sold its properties at
960 Great South Road, Auckland for $8.5 million and the Corner of Wakefield
and Taranaki Street, Wellington for $25.0 million.

The sales reflect premiums to book value of 16% and 1% respectively.

[peat]

share price has been performing pretty well so I see this just as a correction from that as opposed to anything related to the announcement which was broadcast as not price sensitive.

[Waltzing]

Some order not filled today, 300.000 at 133 for example.

We were hoping to take some more at 1.24 not long ago. We are hoping for a big correction but these sales dont make any difference to the dividend.

Any sell off back to 1/20's will be a HUGE buying opportunity and i dont think we will get it, pitty. Id like another 100,000 at least maybe another 200,000

if we did not have money tied up in the banks and sky city i would want 500,000 more.

Just cant get enough of this stock.

[Cyclical]

Funny day for the stock actually, came down quite a bit before someone decided they wanted a lot at the end of the day. Manipulation?

11907

[Waltzing]

"manipulation" how? stock go up, stocks go down and sometimes they go sideways...orders at the end of the day loaded by brokers.

[Beagle]

MSCI index rebalance at the close.

[Cyclical]

MSCI index rebalance at the close.

Yeah of course, cheers

[Waltzing]

https://www.msci.com/eqb/pressreleases/archive/ir_dates.pdf

[Beagle]

Long term there are potential headwinds for retail and office space and I think these headwinds need to be kept in mind.
https://www.stuff.co.nz/business/122580217/whats-the-future-of-the-postcovid-office
Disc: I recently reduced my stake in ARG and reallocated to GNE for yield, people will always need power. The longer term need for so much office space is less clear.

I still like ARG but I like it less when its materially over its $1.30 NTA. There appears to be overhead resistance at ~ $1.40 and while I acknowledge other property REITS are also trading above NTA the cloud over future office space with this one means I am less confident of a material premium to NTA with ARG.

I acknowledge yield at 4.7% PIE fully tax paid, (effectively 7% gross for a 33% taxpayer), is still very good at $1.35 in this ultra low interest rate world but I have been getting 7.5-8.0% gross yield on recent GNE purchases.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12362591

Big changes coming in the way we work I reckon.

[Waltzing]

Certainly profit taking in this space will temp some and we did the same for GMT which is still tradable.

But ARG provides a balanced mix across a lot of sectors in the market place and even PCT surprised.

people eventually feel they need to connect face to face and after a year or two at home they will want to go to the office its a social thing as well. Offices will change in design to providing a more social experience as property managers green there offerings including a more sophisticated environment.

The box cubicle solution will fade as i think ARG understand a new type of offering is required and they are moving to that new model of the premium experience.

We havnt put more then 12% into this sector in allocations.

people dont live in tents and there are also lots of changes coming for power companies and i dont see those dividends growing from dams any time soon.

There is unlimited power out there and i think electricity faces just as many challenges in the future although very exciting from new tool to capture and store energy something ARG is very aware of.

You obviously did not sell enough for us to buy more at a discount at say 1.16.

Negative interest rates will explode yield prices is a way that will make the GFC look like a small handle in the charts.

Its already exploded tech in the US and it will come here.

[peat]

From the Annual report 9( a couple of months ago)

The Board has recently approved small adjustments tothe Investment Policy target bands. By portfolio value,the Industrial target has increased by 5% to 45-55%from 40-50%. The Large Format Retail target hasreduced by 5% to 10-20% from 15-25%. The Officetarget of 30-40% is unchanged

They seem very confident about the next year....

[oldtech]

Argosy's property investment strategy is currently listed as:

45-55% Industrial

30-40% Office

10-20% Large Format Retail


It will be interesting to see if this allocation changes in the coming months.

In fact, it will be interesting to see just how the whole "office space" thinking changes in the coming months. I'm in two minds about it - on the one hand, there's certainly numerous articles extolling the virtues; but as Waltzingironman alludes to, there is also the undeniable fact that people do miss the human contact. And yes, there's Zoom and Skype and Microsoft Teams, but they're used for meetings, mostly. What people miss is the casual interactions over a cup of coffee, going out for lunch together, etc. I think this is actually quite a powerful factor.

We shall see whether in the next few years, 2020 is looked back at as a game-changer in the way we worked, or a missed opportunity as we all return to the same old way of doing things, because old habits die hard.

Disc: Small holding, and watching carefully

PS Thanks peat, I hadn't realised the allocations had changed recently.

[NZSilver]

Risk wise it would be nice to have a purchase price below NTA. As mentioned above yield will drive price now. Office space will be fine long term.

[Waltzing]

"45-55% Industrial

30-40% Office

10-20% Large Format Retail"

well done to posters thank you which is why we moved back into this well balanced portfolio back in may at about 1.16 but we have been invested in this portfolio on an off for well before the GFC.

"people do miss the human contact" yes people want to see the whites of your eyes to see if your honest in there eyes and committed to them as people. Its a judgement call that face to face is the only way too see this.

In the end its are you along side us as long term customers and can we rely on you as reputable service providers and yes sometimes you have to go play golf or similar. Cant play myself but i am happy to caddy!!! Nothing like seeing a good technique in any style of activity , ballet to golf, fly fishing to surfing..painting to tile making, fixing a building structure..creating efficient energy use in buildings . skill and commitment to excellence is appreciated and best seen face to face.

[Beagle]

Yes well balanced and well managed, no question and they seem to have managed the Covid risk situation with their tenants quite well so far but no consideration of ARG would be complete without thinking about the level of tenant defaults if we yo-yo up and down lockdown level's over and over again. No joy on selling the big retail block at Albany yet either.

I am neutral on ARG at this mid 130's level, risks and rewards seem fairly balanced, (would add a few more back at under NTA).

[Waltzing]

from MR B:

"Yes well balanced and well managed"

Part of a well managed balanced portfolio of stocks and we dont see NZ making the same mistake twice in regard to border controls.

Im thinking less than 25% change of another lock down and onwards and upwards from here.

I expect that site too take several years to sell or more. I could be wrong. I dont expect that to sell until we clear 2022.

No news specials at 1 PM for virus updates tell us that this thing the GV feels is now under control and no one is available to chat to the nation at the fire side , ah lunch break or on your desk at home work site beside the pool as spring breaks and a rosie future looms... well a new future anyway.. look on the bright side.... 2023... bridge the gap...

[Waltzing]

"https://www.interest.co.nz/personal-finance/107126/economic-climate-has-brought-interest-rates-very-low-levels-and-environment"

come and get some money at 4.5%

[Waltzing]

1.42! Go you under rated little stock....

[Beagle]

Only one ? to have continued paying their full normal dividend throughout Covid gives them a real reputation boost in my opinion. Interest rates headed to zero is also a factor and another reason to see this being well supported going forward. We might even get your $1.60 one day ;)
Disc: Modest sized position.

[Waltzing]

"1.60 " many thanks! well that would be a very pleasing site indeed...

HLG Under rated... OCA.. asset plan under rated.. im sure many investors have there FAV under rated stock..

[peat]

getting to keep the 4 and a half mill deposit seems like a useful addition to the cashflow and gain on disposal !

[Beagle]

getting to keep the 4 and a half mill deposit seems like a useful addition to the cashflow and gain on disposal !

Clear they're pursuing them for damages on top of that amount too.

Interestingly at $1.39 ARG provides a reliable, (even through Covid) 4.58% tax paid PIE yield which for 33% taxpayers = 4.58 / 0.67 = 6.84% gross.

That's pretty decent in a zero interest rate environment.

[Waltzing]

We may miss out on the big OCA gains and the big HLG DIV and the HM (sweden euro price recovery) but ARG has proven itself the safe haven we thought it would while we made short term gains on KMD and sold GMT but traded.

We though ARG was better then returning money from sales of shares to bank deposits. A lot of people missed this one but should pick up bigger gains in other stock but not all of those pay imputed divs. HLG has a big RIR (retail investor risk) and we just cant put a big number on those types of stocks.

Investors over 50 might be looking to find safe haven portfolios with prehaps only 25% in high risk growth stocks.

[Beagle]

ARG lining up to be the next cab off the rank to get 7 year money off the punters at just over 2%. https://www.nzx.com/announcements/361276

[NZSilver]

I see it pushing past $1.50 very soon. Great return over the last few months

[Waltzing]

DISC: holding in 2 portfolios and will trade in a third holding company.

As my grand father used to say.. (ANZ employee in the 1950-60s) keep your money working.

What a stellar underperformer.

It has been found for many industries overseas you need that office for ramping up the ideas but not 100 percent of the time and you still need to warehouse. Good and services cant fit into small spaces at home or in the garden.

Cloud computing is just the old main frame model on steroids and comes with its own problems. There is nothing better than distributed systems and work spaces to harden the business model.

Our defensive line has held. We could have gone HM sweden but thought the NZ approach would actually be the best because the world was not ready to cope but next time this NZ approach wont be the best model but we though ARG provide the best defence but we could also have and should have gone with FPH as the balance but pivoted KMD and HLG based on GFC performance.

Low risk seeking investors should have rolled into here already.

[Beagle]

Some people reckon there's an old proverb that when a company does a bond issue, buy the shares instead which usually get materially rerated. Worked a real treat for people who know the proverb and bought up heaps of OCA at $1.05....might we see a repeat here ?

[Waltzing]

Bullish for the NZ commercial property sector investor . Getting in now while rates are low. We always buy the equity expecting both DIV and Gain.

[Waltzing]

pushing up against 150 ... still cheap with money for development cheap as chips..

[Beagle]

https://www.nzx.com/announcements/361633 A little surprising they didn't take $25m in oversubscriptions too.
2.2% a very low rate though so maybe the demand was for $125m at that rate and if they'd taken oversubs the overall rate in the bookbuild would have been higher.

At their last annual meeting I suggested another bond issue because their weighted average cost of borrowing was just on 4%.
So on the $125m issue at 2.2% there's good cost savings of about $125m x 1.8% per annum = $2,250,000. Not to shabby at all in terms of a cost savings exercise and definitely earnings accretive. Nice to lock that in for 7 years too.

[Waltzing]

With talk of MMT coming around the world and NZ still back in the old inflation model low interest rates look here to stay as MR B has indicated. NZ government Bonds sold into markets at low rates also indicating low rates are here for an extended period of time.

Property has exploded beyond political control.

[NZSilver]

Little pull back, my order got hit at close for 1.39. Still should see 1.50-1.60 medium term purely based on search for yield. I keep getting an advertisement for a Jasper forecast 6% industrial fund that's getting started. This will be unlisted(illiquid), narrow tenant exposure, buildings require work, much less diversification, lower grade commercial building exposure so that 6% yield has much more risk attached. Pretty easy decision when you compare these advertised syndicates/funds to Argosy to just buy more ARG. Recent industrial land aquired gives potential redevelopment and growth going forward. I suspect ARG is currently trading right near NTA, but will be interesting to see when their new valuations come through.

[dibble]

Little pull back, my order got hit at close for 1.39. Still should see 1.50-1.60 medium term purely based on search for yield. I keep getting an advertisement for a Jasper forecast 6% industrial fund that's getting started. This will be unlisted(illiquid), narrow tenant exposure, buildings require work, much less diversification, lower grade commercial building exposure so that 6% yield has much more risk attached. Pretty easy decision when you compare these advertised syndicates/funds to Argosy to just buy more ARG. Recent industrial land aquired gives potential redevelopment and growth going forward. I suspect ARG is currently trading right near NTA, but will be interesting to see when their new valuations come through.

Yeah I get those. Gearing is 45%, slightly high at any environment let alone these troubled times. To get to 6% payout, likelihood is they are buying second rate properties the larger LPTs are flogging off while they can, at unexpectedly high prices. That isnt to say it will end in tears, might turn out very profitable but Jasper? Never heard of them. I imagine they will enjoy the ticket clipping. Personally I'd prefer to pay a small premium for quality/listed/transparent LPTs for the next few years.

[Waltzing]

ARG is simply unless the forum can inform us otherwise, a class act and very investable.

[Beagle]

ARG is simply unless the forum can inform us otherwise, a class act and very investable.

I like it mate. Pretty boring, (I came close to falling asleep at the annual shareholders meeting), but its good to have some boring high yield stuff in one's portfolio.

[Waltzing]

We are from a family of lawyers, bank staff and and an accountant. There is nothing boring about this wonderful investment. As it turned out we should have sunk over 40% allocation. We are under invested in this wonderful stock. Posting of the forum of Term deposit holders talking to banks and about not renewing there TD's. That is big news!!!! Bigger than any election as far as im concerned.

[peat]

yes it did find support at the 30 day moving average.
I think momentum is slowing a bit. but still hold.

[Beagle]

I meant boring in a kind way. They just keep on keeping on chucking out tax free PIE dividends every quarter no matter what at 4.45% (much higher yield based on my average price), which works out to 6.6% gross for those on a 33% tax rate. Compares very favorably with other REIT's in terms of yield and makes 0.9% per annum on term deposit look like a really stupid idea. You can sleep really well with some of these puppies in your portfolio is what I meant by the term of endearment, "boring".

[Waltzing]

We believe that MR B's numbers make the stock EXCITING in a time of uncertainty!

[BlackPeter]

ARG is simply unless the forum can inform us otherwise, a class act and very investable.

Absolutely, though timing is important. much more fun to buy them around (or below) $1 per share ... and I would not be surprised if they get there at some stage again ...

12064

[Swala]

Managed to buy at $1.04 mid April and very happy with this stock. One of the best real estate investments you can make in these times in my opinion and a long term hold.

[peat]

looks like it found its mojomentum this arvo!

[NZSilver]

Arg moving higher, great stock great returns considering it's very low risk nature

[BlackPeter]

Arg moving higher, great stock great returns considering it's very low risk nature

Is it really low risk? Sure, they still will be around in a decade and keep paying a dividend - however - SP was eight months ago around $1 ... and there is nothing stopping it to have another dip if & when the recession starts biting. Renting out offices and warehouses won't turn them into the next XRO or Amazon of real estate.

What is the up potential? You think another doubling of the share price is likely? I doubt it.

What is the down potential? Could SP drop to half? Well, they have been there 8 months ago ...

So, yes, good company and sure, NZ might be able to avoid the worst of the recession if we play our hand as "Switzerland of the South" really well.

However - there are always risks in a global storm. Personally I prefer to park my money at that stage into ventures with more up and less down potential.

[NZSilver]

Thanks for your comments - my bull case is Low debt, diversified, good yield. Cashflow every month. I would be interested in you top picks with more upside than downside

[BlackPeter]

Thanks for your comments - my bull case is Low debt, diversified, good yield. Cashflow every month. I would be interested in you top picks with more upside than downside

Not sure I have time to list them all (and sort of off-subject), but some examples would be e.g. OCA (I go here with Beagle & Mav), INA, CDI - a small property developer trading well below NTA, solid and consistent performer like MFT, PPH, various agricultural (and currently downtrodden) stocks including ATM and SML.

Anyway ... not saying ARG is bad, just feels currently a bit dear. I used to love to buy them around $1 and depending on how NZ Inc comes through the next crisis we well might get there again - or not - this is my risk :):

[NZSilver]

Yeah agree, I still see arg a lot lower risk then all of those, other than main freight. I'd say arg is at fair value but could move towards 1.60 simply based on where the OCR is heading. I'm very familiar with CDI and have owned previously and own a smaller parcel, a real value play with property on the books at purchase price rather than developed/appreciated price. No debt and plenty of cash. However it is illiquid and more importantly is controlled by MCK and there overseas owners. The big question is will it actually ever realise it's true value and trade towards what is probably worth? Possibly not with it's large holders who I'm sure see it more as a private business and are not to worries where the shareprice sits, reasonable dividend in the mean time though.

[NZSilver]

Buy more pre results or afterwards? Seems to be holding well mid 140s

[DDog]

This is not getting any attention

Argosy Property Limited (‘Argosy’ or the ‘Company’) has reported its results for the 6 months to 30 September 2020.
Key highlights for the period include:
• Net distributable income up 21.5%;
• Net distributable income per share up 21.2%;
• Robust portfolio metrics maintained with high occupancy (99.4%) and WALT (5.7 years);
• Strong portfolio leasing and rent review outcomes, including 3.8% annualised rent growth on rents reviewed;
• An unrealised revaluation gain of $79.8 million, an increase of 4.3% on book value;
• An increase in net tangible assets per share (NTA) to $1.41 from $1.30 at 31 March 2020;
• Strong delivery on key strategy focus areas including minimising Covid-19’s impact on the business, the continued focus on sustainability and green developments and executing on capital management initiatives;
• Argosy’s FY21 dividend guidance increased to 6.45 cents per share, reflecting continued sound delivery of strategy.

[Beagle]

Very solid result ! I'm very impressed.

[BlackPeter]

This is not getting any attention

Argosy Property Limited (‘Argosy’ or the ‘Company’) has reported its results for the 6 months to 30 September 2020.
Key highlights for the period include:
• Net distributable income up 21.5%;
• Net distributable income per share up 21.2%;
• Robust portfolio metrics maintained with high occupancy (99.4%) and WALT (5.7 years);
• Strong portfolio leasing and rent review outcomes, including 3.8% annualised rent growth on rents reviewed;
• An unrealised revaluation gain of $79.8 million, an increase of 4.3% on book value;
• An increase in net tangible assets per share (NTA) to $1.41 from $1.30 at 31 March 2020;
• Strong delivery on key strategy focus areas including minimising Covid-19’s impact on the business, the continued focus on sustainability and green developments and executing on capital management initiatives;
• Argosy’s FY21 dividend guidance increased to 6.45 cents per share, reflecting continued sound delivery of strategy.

Nah - companies making money are boring. Real punters go for loss making ventures like AIR :):

Anyway - results look much better than I expected after the Covid down turn. Respect. Still not sure how much more headspace the SP will have - I do expect the industry to go through some changes over the coming years. Less need for big office spaces and probably less need for big warehouses with huge parking spaces in front of them as well.

[Waltzing]

AND WHAT DOES MR B think now!

the only stock that has performed better than this is HLG , MFT EBOS and a few others and our new travel stocks which is not NZX.

But for a boring old building stock it has been outstanding performance from an NZX company.

in a low interest world, SP should be a lot lot higher. Far better than the bank.

GMT has increased space and has it leased out. NZ is a country that is not going to get smaller but actually people will be lining up to invest and have NZ as a shelter from the MADENING CROWD.

[Beagle]

See post #181 above. Happy holder. NTA now $1.41 and I believe this represents very sound value in this sector. It wouldn't surprise me to see this in the $1.50-$1.60 range in due course. I'd be happy to accumulate more at NTA if the opportunity presents.

[Waltzing]

Many thanks for your comments.

[DDog]

$1.50
Let's do this!

[Waltzing]

we believe MR B is a market mover.. the 4 investible players in the property market would have to be ARG, GMT , KPG and possible PCT.

[Waltzing]

modest run up in share price certainly shows the increasing demand for returns where banks are offering nothing much!

[winner69]

ARG chart looking a bit sad

Current price below most Moving Averages

Even the Pretty Good Oscillator has warning signs

Must be time to buy

[nztx]

ARG chart looking a bit sad

Current price below most Moving Averages

Even the Pretty Good Oscillator has warning signs

Must be time to buy



Dunno about that .. like $1.20-ish better - my friend .. ;)

We'll see what the next 3-4 weeks brings ..

[Habits]

ARG chart looking a bit sad

Current price below most Moving Averages

Even the Pretty Good Oscillator has warning signs

Must be time to buy

Tell that to the doggy ... 'the one with the waggly tail'

To all others its in a downtrend

[Waltzing]

the 10 year will weight on all comp prop assets until it doesnt.

The high is in for the next 2 years until inflation abates.

NZ doesnt have an infrastructure bill coming, its got a consumption debt bill that the government is carrying for you the tax payer.

KPG looks to be the under valued stock in this sector.

Big chart support at 130-140 for this stock.

Holding up well at 143.

[Waltzing]

End of financial year which means we get a holiday this week after successful financial transaction processing runs.

Wonder what Mr B thinking is of ARG going forward? Of course after the protests from the proles over OCA he might not be as informative going forward and i cant blame him.

Good support today on ARG and KPG.

[Baa_Baa]

End of financial year which means we get a holiday this week after successful financial transaction processing runs.

Wonder what Mr B thinking is of ARG going forward? Of course after the protests from the proles over OCA he might not be as informative going forward and i cant blame him.

Good support today on ARG and KPG.

It’s hard to comment when you’re banned and who are you calling proles?

[winner69]

It’s hard to comment when you’re banned and who are you calling proles?

Proles ...Orwell has been mentioned a lot on ST the last week

Bit of a worry

[Baa_Baa]

Proles ...Orwell has been mentioned a lot on ST the last week

Bit of a worry

Doesn’t end well does it, like nothing Orwell said, all bad. ARG on the other hand should do ok. If one talks in sonnets and cryptics with grammar barely decipherable, grandiosing some while pillorying others, the end is nigh, for them. Seen them come and go over and over. Time wounds all heels.

[Getty]

"Time wounds all heels"

What a great quote.

[nztx]

"Time wounds all heels"

What a great quote.

Hope a sector that relies on revaluations for a hefty % of it's bottom line isn't the next
in line to be mortally wounded by a band of clumsy blindfolded fiddlers on the hill .. ;)

[Waltzing]

Doesn’t end well does it, like nothing Orwell said, all bad. ARG on the other hand should do ok. "

since i barely look at my keyboards my GAMMA is the worst here by far.

But then i use this an opportunity to see if something hits the screen.

this banning thing is a bit of worry.

Kip looks to be the most undervalued in this sector. We stand to be corrected on this as we are not experts on NZ commercial property.

If MR B stays in business we might have something for him to play with.

Since studying french i have had to actually look at the english language.

My first language is a macro statement language i created about 20 year ago because geeks keep stuffing my programs with cryptic symbols i dont always need.

I used it so much i almost forgot how to write english all together.

[NZSilver]

Arg suddenly moved higher this afternoon after it's been trading at nta for a while, possibly it was being manipulated over the last few weeks for accumulation.

[peat]

looks like a meaningful breakout to me
12433

[Waltzing]

Very Nice graph.

If the 10 year increases to 2% and above then there might be another sell off.

[RTM]

Very Nice graph.

If the 10 year increases to 2% and above then there might be another sell off.

If or When ?

[Waltzing]

Sell Off?.. BUY Friday there on the NZX.

Is Mr B a Buyer?

With competition for land in the next decade at the intersection of transport, housing and agriculture; will land values continue to rise and the NTA of the likes of GMT, ARG and KPG continue to increase.

[Waltzing]

Mr B will not doubt be pleased with his portfolio additions performance today.

[Beau]

Mr B will not doubt be pleased with his portfolio additions performance today.

Is that you or Beagle selling 135 shares at $50.000:t_up:

Thought there would be something in place to stop stupid bids like that or more to the point people should no better.

[Waltzing]

My fellow directors would be very pleased im sure if a trade for ARG went through at 50 dollars.

[Beagle]

Mr B will not doubt be pleased with his portfolio additions performance today.

Very nice. Swapped out a truck load of OCA at around $1.40 a little while back for ARG at the same price. Former now at $1.37 and latter at $1.55. Very content with that switch.

[Beagle]

Very solid result and nice dividend lift for FY22. NTA up very strongly. Net distributable income up 13% WOW !! (although was assisted with one-off gain on Albany of $4.5m but nonetheless a very strong gain). Net distributable income per share up 13.1%; WOW.
Most of all, we remain focused on growing sustainable distributions to shareholders in line with our company purpose."
Note to other CEO's...this is what shareholders really want to read and is a very refreshing change from the almost endless rantings of some other companies about diversity and inclusion, cultural sensitivity and all sorts of other politically correct nonsense.

Lot to like...I will look for opportunities to buy significantly more at or slightly below NTA which is now $1.53. I will strongly back companies that haven't forgotten their primary purpose for existence, that are managed very well and are on compelling metrics.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARG/372406/346272.pdf

[peat]

yes I really like that they highlight distributable income.
while property reval gains mostly come , sometimes they go.

[RTM]

Very nice. Swapped out a truck load of OCA at around $1.40 a little while back for ARG at the same price. Former now at $1.37 and latter at $1.55. Very content with that switch.

I think I remember you drawing attention to them when they were around a $1.00...or a bit less.
Well done...nice to chalk up a solid gain.

[Beagle]

I think I remember you drawing attention to them when they were around a $1.00...or a bit less.
Well done...nice to chalk up a solid gain.

Thanks mate...its nice to get a pat on the back....quite refreshing actually after the kicking some others have given me in recent times.

[850man]

Wondering what thoughts are from folks closer to this than me for ARG and other commercial property suppliers for the long term? Many businesses looking to downsize their office space requirements with more WFH now being the norm. Possibly oversupply in future?

[mike2020]

Thanks mate...its nice to get a pat on the back....quite refreshing actually after the kicking some others have given me in recent times.

I see a culture change where anyone who is in disagreement seems to become 'the accused' and it not only stifles healthy debate it's darn right abusive if you have the power of thought. I use every bit of information you provide in my own way. What good is a dog without a bark :t_up:

[peat]

Wondering what thoughts are from folks closer to this than me for ARG and other commercial property suppliers for the long term? Many businesses looking to downsize their office space requirements with more WFH now being the norm. Possibly oversupply in future?

what is known will already be priced in.... hence trading around NTA but...

ARG have a diverse portfolio.

12519

Take a read of the Annual Report released today

[ratkin]

Reading the annual report, word of the day is Green

[peat]

Reading the annual report, word of the day is Green

hahah yes I noticed that too... Beagle might not approve.
its client driven though yeh? ;) that is what all the leasees want nowadays so that they can claim they are being green.

[Beagle]

Window dressing in green is great ! It's very much "on trend" and keep's the politically correct leaders of corporations happy and feeling they're making a contribution to the environment and it keeps the eps growing...Win-win !

[Benny1]

Window dressing in green is great ! It's very much "on trend" and keep's the politically correct leaders of corporations happy and feeling they're making a contribution to the environment and it keeps the eps growing...Win-win !
Oh gees...next you will be spinning out the virtues of eating tofu and taxing animals for f#rting! Hehe..
Good solid if not spectacular result..steady and can I say slightly boring result..always good to have some boring stocks...
Happy holder..haven't added any for a while..to be honest have found the whole market a little boring lately apart from the ATM destruction...

[Beagle]

Oh gees...next you will be spinning out the virtues of eating tofu and taxing animals for f#rting! Hehe..
Good solid if not spectacular result..steady and can I say slightly boring result..always good to have some boring stocks...
Happy holder..haven't added any for a while..to be honest have found the whole market a little boring lately apart from the ATM destruction...

You must be psychic mate. How on earth did you know I've been trying out Hansells Laksa soup with tofu in it :D https://foodwatch.com.au/reviews/item/product-snapshot-hansell-s-all-natural-soup.html#:~:text=Hansells%E2%80%99%20Soup%20range %20comes%20in%20three%20cooking%20methods%3A,where %20you%20simply%20add%20boiling%20water%20and%20st ir.
Its actually very good and tasty on a cold autumn day and definitly not boring :D
As you quite rightly suggest, boring stocks can be a very good thing, certainly better to hold that the exciting ones that are a drama a minute like ATM :eek2:

[Cyclical]

I guess the market found it a little too boring, pulling back most of yesterday's gains.

[winner69]

You must be psychic mate. How on earth did you know I've been trying out Hansells Laksa soup with tofu in it :D https://foodwatch.com.au/reviews/item/product-snapshot-hansell-s-all-natural-soup.html#:~:text=Hansells%E2%80%99%20Soup%20range %20comes%20in%20three%20cooking%20methods%3A,where %20you%20simply%20add%20boiling%20water%20and%20st ir.
Its actually very good and tasty on a cold autumn day and definitly not boring :D
As you quite rightly suggest, boring stocks can be a very good thing, certainly better to hold that the exciting ones that are a drama a minute like ATM :eek2:

Add cooked chicken and udon noodles and you have a complete yummy meal ....better than MFB stuff too.

Had to add the meat

[winner69]

Very solid result and nice dividend lift for FY22. NTA up very strongly. Net distributable income up 13% WOW !! (although was assisted with one-off gain on Albany of $4.5m but nonetheless a very strong gain). Net distributable income per share up 13.1%; WOW.
Most of all, we remain focused on growing sustainable distributions to shareholders in line with our company purpose."
Note to other CEO's...this is what shareholders really want to read and is a very refreshing change from the almost endless rantings of some other companies about diversity and inclusion, cultural sensitivity and all sorts of other politically correct nonsense.

Lot to like...I will look for opportunities to buy significantly more at or slightly below NTA which is now $1.53. I will strongly back companies that haven't forgotten their primary purpose for existence, that are managed very well and are on compelling metrics.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARG/372406/346272.pdf

Jenny Ruth in her piece at Businessdesk with headline Argosy goes for growth, but what about earnings? doesn’t seem on same page as you


Last bit -

All of this is cold comfort to investors wondering how Argosy is going to perform over the next 10 years and whether chasing portfolio size is an appropriate goal to set.

[Beagle]

I'm comfortable with their management, governance and future strategy. You know me and my emphasis on track record and the five year summary of a company is one of my most favored parts of the annual report of any company as it gives such a useful snapshot of their track record. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARG/372406/346284.pdf
In my opinion page 8 speaks for itself with distributable income steadily rising from 6.55 cps in 2017 to 8.14 cps in 2021, albeit the latter figure augmented by the $4.5m Albany settlement but nevertheless a nice solid average annual increase of about 4% per annum.
NTA has steadily increased from $1.06 in 2017 to $1.53 in 2021. Good solid, dependable, albeit a bit boring, stuff and all the way along the journey decent quarterly tax paid PIE dividends.
I feel quite content with a decent chunk of these in my portfolio.

Risks are the rising 10 year Govt stock rate and the work from home trend, (although I can't help wondering how long employers are going to trust the employees will be just as productive working from home as whilst there is some initial novelty to this its very easy to let work efforts slip when working from home).

Forecast dividend is 6.55 cps per annum so on a $1.50 share price that's 4.37% net yield which for many investors on a 33% tax rate = 6.52% gross.
Its up to people to decide for themselves if the Argosy team can continue to perform well going forward in a possible higher interest rate environment, for me I think their track record is quite satisfactory and I am not concerned if Jenny Ruth sees it differently.

[peat]

my feeling from the article was that they just didn't want to put a number on it. would it be fair to say that to infer anything more than that (i.e. the actual number themselves) is speculation.

[Waltzing]

blow off top 168...

probably the top for a while.

They really should increase the Div next year.

[Beagle]

New all time high. The board are focused on steady dividend increases over the years and FY22 is up 1.6% of FY21. Last year they only paid out 89% of AFFO earnings so there is plenty of scope for many more years of dividend increases on top of the steady increases in the last 5 years....which is a vastly different situation from that prevailing at KPG.

My rating HHH (Happy Hound Holder).

[Waltzing]

Just dont have enough of them... got lots... should have got far too many..

bought them in half of all entities with trading accounts..

think we will have to buy it into every entity portfolio.

ARG is an investment; KPG has always been a trade.

[oldtech]

Just dont have enough of them... got lots... should have got far too many..

Ha ... same here!

Topped up most recently just over a week ago, must admit I wasn't expecting a 10% gain quite that quickly!

[Waltzing]

hopefully KPG will take notice and get its act together. ARG has been a stand out performer.

Annual Results Presentation (nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com) (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARG/374994/349530.pdf)

heading to 2 dollars in 2 years?

[NZSilver]

blow off top 168...

probably the top for a while.

They really should increase the Div next year.


Still flying, just traded at 1.70, looking good to move higher.

[NZSilver]

blow off top 168...

probably the top for a while.

They really should increase the Div next year.


Still flying, just traded at 1.70, looking good to move higher.

[Waltzing]

1.72, new all time high .

Mr B is Best Buyer Again.

It should pause here, should... but this market has been brought forward a long way.

P/E for this sector is not high because they are not considered growth stocks but bond proxies.

[Beagle]

Another nice rise to another all time high and again, on very strong volume.

[Waltzing]

GMT and ARG appear to be the favoured Comp Props at the moment. Retail is lagging badly including KPG and PCT. The later may start to pick up next year.

[NZSilver]

Heres why the price has increases - moving into index, can anyone with a full copy of this article please copy here or send me via message.

https://www.nzherald.co.nz/business/market-close-property-stocks-light-up-nz-sharemarket/GN42ZHLJYCU3KDKA7JHEEQBLKA/

[Kelvin]

Tip: you can save premium articles into a service like Instapaper and it will show you the full text.

I’ve copied the relevant parts here:

Property companies Argosy, Stride and Vital Healthcare lit up the New Zealand sharemarket on the promise that they may be included in the main global real estate index.

Stride and Argosy both hit new highs as the S&P/NZX 50 Index closed the week at 12,711.84, up 28.2 points of 0.22 per cent. There were 70 gainers and 58 decliners over the whole market on volume of 49.3 million share transactions worth $187 million.

Stride rose 9c or 3.66 per cent to $2.55; Argosy was up 5c or 3.07 per cent to $1.68; and Vital Healthcare increased 13c or 4.10 per cent to $3.30 on news that the FTSE EPRA/Nareit Global Real Estate Index was lowering its criteria for inclusion.

It is a market capitalisation-weighted index designed to track the performance of listed property companies in both developed and emerging countries worldwide. The constituents are admitted on liquidity, size and revenue.

Matt Goodson, managing director of Salt Funds Management, said the price movements of the property companies illustrate the sheer size of investing by passive funds in this current market.

Argosy has increased 27c this week; Vital Healthcare, nearing its high of $3.37 set on January 25, rose 26c; and Stride was up 19c – all in the range of increasing nearly 10 per cent.

Goodson said "we won't know till the start of September which stocks are going into the index but Argosy, Stride and Vital Healthcare could well join Kiwi Property, Precinct Properties and Goodman Property Trust, which are already there."

Based on current share prices, the passive investment funds may end up buying the local property stocks well above their fundamentals and net asset backing – just as they did early in the year with Contact Energy and Meridian.

"The lesson from that are the funds ended up with a nose bleed when Contact and Meridian's prices peaked and are now trading at their fundamentals," Goodson said.

[NZSilver]

thankyou Kelvin

[Beagle]

Thanks guys, I missed that. Hmmmm...more upside in Sept ?

[BlackPeter]

Thanks guys, I missed that. Hmmmm...more upside in Sept ?

Maybe ... however - I see this more as a potential feast for the traders.

Have a look what happened to our Gentailers (here MEL, but the others look similar) earlier this year when the international clean energy ETF's bought in.

1272112721

A peak like the Matterhorn. Great buying for anybody who got in early and got our early ... but dangerous to buy late and hang around when the music stops.

What do I want to say? Not sure ARG's price is currently driven by fundamentals :): Given that interest rates are more likely to go up from here, I would expect them to drop over time.

[BlackPeter]

Thanks guys, I missed that. Hmmmm...more upside in Sept ?

Maybe ... however - I see this more as a potential feast for the traders.

Have a look what happened to our Gentailers (here MEL, but the others look similar) earlier this year when the international clean energy ETF's bought in.

12721

A peak like the Matterhorn. Great buying for anybody who got in early and got out early ... but dangerous to buy late and hang around when the music stops.

What do I want to say? Not sure ARG's price is currently driven by fundamentals :): Given that interest rates are more likely to go up from here, I would expect ARG (and other property funds) to drop over time.

[Beagle]

I believe you've missed the fact that they have a solid record of driving real rent increases and eps growth. Also the valuers cap rates at 31 March 2021 don;t look too demanding to me.

Had these for quite some time and I'm a very happy camper...wouldn't mind a few more.

[BlackPeter]

I believe you've missed the fact that they have a solid record of driving real rent increases and eps growth. Also the valuers cap rates at 31 March 2021 don;t look too demanding to me.

Had these for quite some time and I'm a very happy camper...wouldn't mind a few more.


Go for it ....

I just see them as quite reliable cyclicals .... and for that they are currently for my taste a bit too high in the upper quartile .... but hey - I don't win every time :):

Remember though: Higher interest rates (if they come) means - ARG will have to pay more interest as well and anybody buying the shares will compare their return with bonds (which would then rise in interest rates as well). Double whammy!

But how do they say: This time will be different!

... and I guess for traders its just back to climbing the Matterhorn ... lots of opportunities (and risks) ...

[BlackPeter]

I believe you've missed the fact that they have a solid record of driving real rent increases and eps growth. Also the valuers cap rates at 31 March 2021 don;t look too demanding to me.

Had these for quite some time and I'm a very happy camper...wouldn't mind a few more.


Go for it ....

I just see them as quite reliable cyclicals .... and for that they are currently for my taste a bit too high in the upper quartile .... but hey - I don't win every time :):

Remember though: Higher interest rates (if they come) means - ARG will have to pay more interest as well and anybody buying the shares will compare their return with bonds (which would then rise in interest rates as well). Double whammy!

But how do they say: This time will be different!

... and I guess for traders its just back to climbing the Matterhorn ... lots of opportunities (and risks) ...

[Beagle]

I suspect interest rates are going to be "lower for longer" which will be very supportive of this sector https://www.cnbc.com/2021/07/06/us-bonds-treasury-yields-climb-as-the-focus-turns-to-fed-minutes.html

[ronaldson]

I sold 100k at $1.71 yesterday via my trading account, with the intention of buying back later. It took all day - one trade, with the longest "history" list schedule of my career at completion. My view is they have too significantly overrun NTA currently, and that higher interest rates are coming sooner rather than later with negative connotations for property shares. They were $1.435 on 1 April. We shall have to wait and see how it is.

[Waltzing]

Yes they are ahead of there NTA but as dividends increase over time they will pull away from higher interest rates. Look back at Comp Prop share prices in 2007 and 2008.

ARG and GMT will continue to expand there book and as technology continues to push out deflation over the long term.

Certainly the chart for ARG and GMT says sell some down but the US 10 year has been smashed down in the last month.

You got possible flash crashes coming from shadow banking via block chain solutions and those could give you some unexpected buying options via credit events on global markets.

Since when have markets been stable and plain sailing.

[Beagle]

Average portfolio cap rate as at 31 March 2021 was 5.63% with a WALT of 5.5 years.
Try buying commercial property with a >5% yield and a decent tenant(s). Almost impossible to find. My view is the portfolio cap rate has the potential to come in lower as a whopping 49% of their portfolio is the highly favored Industrial category. I'm also confident they will add value with their excellent property management skills and property developments and continue to grow eps.

I'm quite relaxed at these being a bit over NTA.

[winner69]

From goodreturns

Analysts at Forsyth Barr warned Argosy Property and Stride Property were now “fairly priced” and downgraded them from ‘outperform’ to ‘neutral’.

[Bjauck]

I suspect interest rates are going to be "lower for longer" which will be very supportive of this sector https://www.cnbc.com/2021/07/06/us-bonds-treasury-yields-climb-as-the-focus-turns-to-fed-minutes.html

There are economic growth concerns as a result of the rise in Delta variant infections. (There has also been a concern at the number of infections in fully vaccinated people.) That may well have a dampening effect on interest rates.

https://www.nasdaq.com/articles/daily-markets%3A-renewed-economic-growth-concerns-take-toll-on-equities-2021-07-08