Brown Bull
23 Sep 2016
Broker notes How come two brokers like Liberum Capital and Credit Suisse have such different views of BKG in their notes issued today (see News)?I suppose you pay your money and take your choice!!
Damp Seaweed
16 Sep 2016
Re: BKG trade Long @2540.One yesterday as a replacement investment for prior sale. and one today as a trade.Hopefully we now have a base.
Eadwig
07 Sep 2016
Re: Trading Update dazed&confused, "Price of urban brownfield rise is a national figure i think"It might well have been. That's the trouble with reporting interviews heard on the radio ... I wish the BBC would do a transcript .. or at least a play again feature for the business sections in the morning at around 05:20 and 06:15 which is the main slot usually.07:15ish is sometime also good to hear when there has been a significant results announcement. BBC radio get a lot of fund managers and CEOs that wont give Bloomberg and the like the time of day, but don't mind a few minutes on the phone with the BBC. Often very illuminating - as was this woman was with up to the minute land prices. I should have noted her name because she seemed very switched on.
dazedandconfused
07 Sep 2016
Re: Trading Update Price of urban brownfield rise is a national figure i think. Cost and Amount (tonnage) of Remediation has generally declined over past 3 years, due to better site characterisation and options to re-use what was previously waste. So less going to landfill (bad for AUG) and so not paying £1500 per truck in landfill tax. Also more developers realising Brownfield is an economic possibility (less scared of the chemistry!) and so more competition for sites when marketed. As i think you know, GLE and INL have always been there.
Eadwig
07 Sep 2016
Re: Trading Update Eadwig: "that 9% figure again ... makes me wonder if I've mis-remembered "Figures were correct, though not clear if the 'within the M25' applies to the brownfield site figures. I definitely remember the greenfield figure did apply, partly in the expectation of more farm land coming onto the market once EU farming subsidies are abolished in addition to less buying from house builders.See my post on 17 Aug on this board subject: "Post Brexit Land Prices/Trading July&Aug""House builders are currently buying less land, green field sites have dropped 4% overall, prime central London is down 9% (blamed mainly on the rise in stamp duty, though Brexit must also be a portion of that), but urban brownfield sites remain growing at 9% in cost."
Eadwig
06 Sep 2016
Re: BBC report s123m, "not sure that I agree with your supposition that 'the Brexit vote had a lot to do with the increasing inability of young Brits to get on the housing ladder' "It isn't my supposition, it is what politicians are saying Brexit means, all under the general heading of a vote against 'Being Left Behind'. The government already has a policy of increasing the number of houses being built. They can kill two birds with one stone if they combine that policy with new skills and new jobs for those people who feel they have been left behind. Or should I say, those people the government feel voted as a protest because they feel they and their regions have been left behind. This is the sort of thinking that comes out of a political crisis that leaves politicians staring at maps of voting patterns and an open mandate for change with no manifesto promises to honour. Theresa May is probably explaining to the Chinese today how Brexit means Brexit and it was definitely a vote against Hinkley Point and, you know, in a democracy it is the will of the people that matters ...
share 123 maiden
06 Sep 2016
Re: BBC report Eadwig,I too hold both BKG and TEF, I invested in the latter because of the potential benefits of cross rail, but was aware that they build relatively lower cost housing. I do think there are a lot of barriers to entry for small builders in London as the listed companies will have much easier access to finance for a start, so it will be interesting to see what ideas the government/mayor of London come up with.I'm not sure that I agree with your supposition that 'the Brexit vote had a lot to do with the increasing inability of young Brits to get on the housing ladder' as, in my experience, most of the young people I have spoken to about Brexit voted to remain and appeared to be rather dismayed by the older generation voting to leave.Those young ones who have actually made it onto the housing ladder were definitely much older than I was and have spent an awful lot of money on rent beforehand. Plus most have had at least some assistance from their parents.
Eadwig
06 Sep 2016
Re: BBC report s123m, "Looks like the house builders specialising in lower cost housing are going to benefit much more than the high end market. I feel very sorry for those Londoners trying to get a foot on the housing ladder."This phenomenon already very apparent in Telford Homes (TEF: AIM listed, London-based affordable housing specialist) with many Chinese buyers for 'affordable' properties up to £600,000. Ironic, then, that the government's Autumn Statement is expected to include a plan to accelerate housing build that benefits the smaller company over the larger.Perhaps the government will take note and come up with a number of qualifying rules, but they will be wanting to make any scheme as simple and straightforward as possible because otherwise history shows us that take-up is minimal and results in none of the impact desired. The May government will want to avoid that latter scenario as much as possible. There is a big expectation and belief that the Brexit vote had a lot to do with the increasing inability of young Brits to get on the housing ladder, and 'being left behind'. They will be expected to have made progress by the time of the 2020 election.[Full disclosure: I hold TEF as well as BKG and other builders. I cite them as an example because they mentioned it in their last trading statement in a development in Stratford, hardly prime central London, the traditional site for London property investment. It might well be the case that other builders are seeing a similar impact, but I don't read all the trading statements of all the smaller builders and am only aware of TEF documenting the fact.]
share 123 maiden
06 Sep 2016
BBC report Interesting article on the BBC about foreign investors buying in the London market post Brexit vote and the perhaps unpredicted (by government) effects of taxation on their purchases.[link] like the house builders specialising in lower cost housing are going to benefit much more than the high end market. I feel very sorry for those Londoners trying to get a foot on the housing ladder.
Eadwig
06 Sep 2016
Re: Trading Update H2,Yes, many builders have announced caution in buying land. I'm just questioning if its a very wise thing to do. With BKG being in a relatively compact area and the most volatile market, it may be vital to profitability. Although I don't hold builders for their ability to read the market as such, they're supposed to be builders, not commodity speculators. The problem for me with that approach is that you only have to misread the market once to potentially get into trouble.... although history tells us so long as you can stay in business long enough, the land buys will pay off eventually. Ask the Duke of Westminster.I should have added to the price changes I included in my post, that along with those, brownfield land within the M25 had risen 9% in the same period. Hmm, that 9% figure again ... makes me wonder if I've mis-remembered the piece on the BBC business news 2-4 weeks ago. I don't have time now but I'll double check where I posted it previously and correct if I have made a mistake.
Hydrogen Economy
06 Sep 2016
Re: Trading Update Eadwig"I wonder if this is the correct time in the cycle to start holding off on land buys, especially with general inflation on the up"Time will tell but I see several builders have been expressing caution about adding to their land banks post Brexit. It could well be that land prices ease until there is more optimism in the market. I agree with Dazed&C that Tony Pidgley has a good track record on land purchasing, he certainly knows more about it than me and with his BKG holding- a lot more riding on it!H2.
dazedandconfused
06 Sep 2016
Re: Trading Update If there's one thing Pidgley has shown himself adept about over the past decades, it's buying land at the right stage of the cycle. Having seen that evidence first hand at Imperial Wharf & Woolwich Arsenal, i'm banking on him being right this year too. Good market response too, to what could have been seen as a bit of a 'warning' (and a political shot across bows!).
Eadwig
06 Sep 2016
Re: Berkeley Group halts work on luxury ... LKH, "Their cheaper properties are real rabbit hutches, though the quality looks OK."It wouldn't be like you to make such a statement without something to back it up. Perhaps you did this time? Or possibly you're judging from property sizes by square feet or metres or some word of mouth information? If you have a handle on that I'd be pleased to know the source, both for research on builders but also as a personal interest as I am engaged in buying property in Poland at the moment where property is typically sold by a price per metre squared. Which is much more typical I believe (than bedroom numbers), I remember leasing homes in USA where square feet was always the measurement.I often wonder how foreign buyers, buying from abroad as an investment (a large part of the London market) relate to our estate agent descriptions compared to what they are used to at home. The first invoice on the new build home in Poland to had 8% VAT on the price, as an example of a surprise for someone buying property in a market in which they have no experience (Standard VAT rate in Poland is 23%).
Eadwig
06 Sep 2016
Re: Trading Update "Berkeley has been selective in the land market, acquiring just two sites in the period"Given their cash on hand, and the reported drop in land prices within and around London (around 3-9% for green field sites), I wonder if this is the correct time in the cycle to start holding off on land buys, especially with general inflation on the up.I appreciate it is a time for vigilance and additional caution, but ideally, at a minimum for a major builder, a regular addition to the land bank throughout the housing cycle should guard against an average over-payment for land over the cycle.To maximise profits, builders would like to buy land when it is priced low and ease off when it is at its highs, of course. But this suggests an ability to read the market in advance, by years where planning permission will be required, which is probably not easy to do even for specialists in the sector.This cycle has seen an extremely responsible approach across the home building sector with restrained purchasing and dividend payments during the fast growth years and very little 'purchasing' high growth through M&A activity. Trying to time the land market strikes me as a possible departure from this general responsible approach to a notoriously volatile market which harks back to the sector before the credit crunch. If BKG is halting developments in some places, then the fall in site acquisitions may still be just in line with their forward predictions of land use required to match growth. I'll have to look at the trading statement in more detail to be sure what is going on - of course 'just two sites' also depends on the size of the sites and numbers of homes planned for them, which csn be over-looked on occasion.I'm holding at the moment having averaged down in price after Brexit, but it wouldn't surprise me if there aren't further share price falls ahead for BKG as Brexit comes back into focus now parliament is back from its holidays.
shovelier
06 Sep 2016
Re: Berkeley Group halts work on luxury ... Yes of course there is basic quality control but inevitably corners are cut and it is well nigh impossible to continually inspect every aspect of every job. There just isn't the accountability with sub contract labour. The alternative is direct labour which has higher costs which have to be maintained during any lack of demand periods between sites.
