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%.
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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%.
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.
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.
thanks for the heads up Possum.
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.
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
Poor communication from ARG. 2 properties for 180 million? They haven't mentioned the yield either? I am very confused and sceptical.
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.
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.
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.
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 ...
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.
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
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.
http://www.sharetrader.co.nz/showthr...l=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 ...
... 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.
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.
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
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.
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.
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?
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.
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.
Who is this partner company to which you refer 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.
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/...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.
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.
Incorrect. They paid $4.8m for it in 2016. https://www.nbr.co.nz/article/turner...d-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.
So what.
$4mil in three years is a very healthy gain.
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.
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.?
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-websit...816/290417.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.
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.
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...ture%20upside/
Details details...133 Roscommon road and 160...just 20% difference, who cares :p
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.
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."
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.
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.
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.
A sizable profit however it is accounted for by our resident Beagles..
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.
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.
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.
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.
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.
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.
$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
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-websit...989/289413.pdf
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.
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.
Positive movements in a tough market. Take them where you can!
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 ...
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)
Thanks mate but I stopped listening to anything Forsyth Barr had to say many years ago.
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!
Makes common sense to spread some capital around now, overseas, especially with the potential for the Kiwi dollar to keep falling.
https://www.nzx.com/announcements/333670 Looks like this development is on sound metrics.
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.
Very solid development.
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 !
Attachment 10554
GMT beats it over 2 years.
I hold both.
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.
http://nzx-prod-s7fsd7f98s.s3-websit...898/300302.pdf
Good solid result. Gross effective yield of ~ 7% for those on a 33% tax rate.
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.
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.
Craigs research 20th November;"High gearing,flat dividend,downgrade to sell" may have helped caused weakness.
High gearing LOL.36% gearing is well within predetermined limits and very conservative for a property company in this interest rate environment.Quote:
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.
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/ARGOS...583/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.
https://www.goodreturns.co.nz/articl...or+26+Nov+2019
Now it is clear why such a spike in volume..
https://www.goodreturns.co.nz/articl...for+5+Dec+2019
Interesting article.
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