II Editor
26 May 2017
NEW ARTICLE: The week ahead: Short and quiet "Rain is forecast, so it must be a Bank Holiday weekend in the UK, and Wall Street is off for Memorial Day. However, there are events to keep an eye on.Monday 29 MayBank HolidayTuesday 30 MayTrading StatementsAFI Development, Renold, Horizon ..."[link]
Eadwig
04 May 2017
Re: London prospects That's just the second phase of the project, so they may be in with a chance of winning further contracts there too.Considering work starts later this year I was surprised to see a finish date of 2021. I assume that must be for the whole development. Anyone in the area know at all? If that is just for phase two its going to take a long time to get those much needed affordable homes in place, and, perhaps more to the point on this board, a long time before any payback?Another example of build-to-let though, this time on behalf of a council. I hope its the forerunner of more of the same to come in the south east because my other brownfield-specialist affordable housing play, INL (Inland Homes) is struggling to re-achieve its pre-Brexit share price.Anyway, nice timing with the announcement, it helped reverse (almost) quite a little trend downwards that was developing and an especially nasty intraday fall, well over 2% at one point, the first dip we've had on TEF for some time.
donna blitzen
04 May 2017
Re: London prospects London prospects, and indeed TEF's prospects, are given a boost by the announcement this morning of a South Kilburn project to build 236 new homes - Telford's first development in conjunction with Brent C.C. See the rns for full details.
ookyfly
27 Apr 2017
Re: London prospects TEF is one of my largest holdings and I'm very comfortable with it. Their business model strikes me as extremely sound.
Eadwig
25 Apr 2017
"London Downturn Over" I've been back in the UK less than 2 weeks and have seen three or four different commentators, estate agents or professional organisations declare that the downturn in London housing has now "bottomed" or has "turned the corner".The latest in The Telegraph today. Humbert's estate agency have called the bottom of the market in prime properties as they open a new office in Mayfair.JLL property consultants say prices are still down and some vendors asking too much, but more realistic pricing is seeing sales begin to move again despite very low numbers of properties on the market.Due to uncertainties many people are putting off moves until the future becomes clearer (general elections always cause a hiatus in property sales, but I'm thinking of the wider Brexit implications), yet one more quote said that people wont wait forever and the signs are that many people who put off a move last summer are now planing to make it this summer.Other quotes I have seen about London property sales is that well over 75% of some developments have gone to foreign buyers. A strengthening pound may slow that, although I doubt it will bet THAT much stronger any time soon, and it should help keep inflation at bay to some extent meaning wage growth might just about stay ahead of inflation, the chance of a UK rate rise has reseeded and mortgages remain extremely competitive for those who can get deposits together.I haven't heard a builder call the bottom yet, and there is definitely more disparate sub-sectors of the London market than ever before after the stamp duty changes and the ill-thought out buy-to-let taxations which may well see small-time landlords 'cash-out' of their properties flooding the second hand market - but they tend average £2.1m according to JLL. Meanwhile build-to-let is quickly moving into the gap with some developers even using modular housing techniques for 30 storey skyscrapers for speed of build.A development at Battersea powerstation has put on hold the phase which would have introduced 100 new affordable homes while they move on to the development of the tube station instead. Affordable homes are the least profitable part of such developments, so this move may be replicated elsewhere by builders feeling the squeeze. Good news for TEF.Whatever the true situation, the market has got behind TEF in a big way once again and it wouldn't surprise me if we end up approaching the previous highs, or at least the highs achieved before the announcement of the @360p placement. The price is past that now, and the sellers at that level, and importantly has cracked the pre-Brexit level to reach 18 month highs. I'm just keen that if there is another placement existing holders get a fair crack at chipping in at the discounted price because TEF could have one helluva future with the stamp duty changes just about capping prices at £925k for many people, which leaves them looking directly at the sector in which TEF operates so well.I think the final results are going to be absolutely cracking when we see the details - and the all importance forward guidance too - on Wednesday, 31 May. Not too late to get on board. STRONG BUY for me.
uselessbaba
25 Apr 2017
Aquisition of Stone Studios E9. 25 April 2017 Telford Homes Plc('Telford Homes' or the 'Group') Acquisition of Stone Studios, E9 Telford Homes Plc (AIM: TEF), the residential property developer focused on non-prime London, is pleased to announce that it has exchanged contracts for the purchase of Stone Studios, a significant residential-led mixed-use development site on Wallis Road, Hackney Wick, E9. The 1.06 acre site, which is located between Victoria Park and the Queen Elizabeth Olympic Park, has detailed planning permission granted by the London Legacy Development Corporation ('LLDC'). Serviced by excellent transport links, including direct access to the adjacent Hackney Wick Overground station, the area has become a highly desirable location to live and work. The redevelopment by Telford Homes will deliver 110 new open market homes and 10 affordable homes along with 54,218 sq.ft. of commercial space including 32,540 sq.ft. of affordable workspace. Stone Studios, which has been designed by architects Pollard Thomas Edwards, has been shortlisted for a Housing Design Award 2017. The gross development value of the scheme is expected to be over £80 million and the Group intends to commence work on site later in 2017 with completion anticipated in 2020. Jon Di-Stefano, Chief Executive of Telford Homes, commented: "Stone Studios is situated in one of London's most exciting and fast changing neighbourhoods and we are delighted to have exchanged contracts for this significant site as it further enhances our already strong development pipeline. The location fits perfectly with our strategy of developing homes for sale in non-prime London and it is particularly pleasing that it already benefits from a planning consent. As a result, we can commence work later this year and deliver much needed new homes as swiftly as possible."UB.
Eadwig
07 Apr 2017
Re: Excellent RNS Rents going through the roof also, so buy-to-let or build-to-rent on a commercial scale (paying corporation tax rather than individual personal taxes) is suddenly big business, including for companies from abroad.The government has massively got it wrong on the tax changes to try to limit buy-to-let, which was just savers trying to get a return on their cash in the main. They are now taxed much more heavily and also can't afford the additional stress tests the banks have been forced to make. Corporations wont find that a problem in the same way.Meanwhile, TEF are noticeably changing over to build-to-rent deals. They've reacted faster than the big boys, it seems to me. "Increased focus on build to rent with a further two significant transactions announced in the last six months. Build to rent pipeline now represents 483 homes with a combined contract value of £232 million. Build to rent activity anticipated to increase in the next 12 months including the potential for longer term partnerships". More built-to-rent schemes have been added since the period covered by the trading update.TEF also avoid the exceptional levels of stamp duty now payable on properties over about £930k, I think it is, which hits many, many properties in London, and has killed off the market over £1 million from what we hear.TEF's average selling price was about £600k last year, from memory, due to their non-prime, brownfield target areas for affordable housing. "Robust non-prime London market such that the Board expects a mix of sales between build to rent, individual investors and owner-occupiers in the future".As the government is now getting less stamp duty than it was after the changes, I imagine they'll change something once they can get away with apparently reducing taxes on wealthier people (higher priced properties). It could be some time before a government thinks it can get away with that in the new political environment, although they have a second chance in 2017 to step back from the ill-thought out policy mix with another budget in November.Meanwhile, I can see TEF and others targetting the commuter belt rather than inner London properties where prices seem likely to remain flat or fall, and more and more people renting, including a possible return to bedsit-like single room rentals, probably within a managed or serviced building. It all seems to be playing into TEF's hands so long as they remain flexible as the government tries to get a sensible balance, especially around London, and meanwhile the housing crisis continues and supply continues to fail to meet demand.The government white paper may change things if they can effectively do something about our broken planning system, but no one wants a new housing estate replacing the green fields or woodlands at the back of their current property, so I'm not expecting too much.More likely there will be a shift to living in smaller properties, and renting them to remain flexible in the jobs market for the younger generation. Although less space may be acceptable for younger, single people, they will still demand high specifications and quality. This is why I see increasing moves towards managed rental buildings, with higher rents which will include some services and higher standards in terms of furnishings, laundry and cleaning services and maintenance. Much like modern, higher end, student accommodation, which often has a commercial property or two incorporated such as a convenience store and a gym.Some property companies are selling 25 year leases on the commercial spaces in this type of building and thus building up a rental revenue stream which will help seem them through any downturn in the housing cycle.In fact, if Brexit continues to see foreign student figures included in net immigration figures enforcing a cap on student numbers, that sector may quickly convert some of its capacity, possibly with existing buildings or changes to planne
dazedandconfused
06 Apr 2017
Re: Excellent RNS Some are leaving but others getting paid more (in pounds!) to stay at least short-term. Whatever happens the deepening skills shortage will mean higher house prices for Brexiteers and improved margins for Developers. I see no downside unless/until overseas investors stop buying in the main cities. Pound collapse only fuels their demand...
donna blitzen
06 Apr 2017
Re: Excellent RNS Yes it is excellent - but a concern has been expressed as to whether immigrant employees in the building trade will all be allowed to remain here after Brexit is effected. That matter needs to be clarified fairly soon.
ookyfly
05 Apr 2017
Re: Excellent RNS I too had hoped for a stronger uprating in sp today. But patience is key. Meanwhile there's a decent dividend.
Hydrogen Economy
05 Apr 2017
Re: Excellent RNS Indeed"Over 80 per cent of anticipated gross profit for the year to 31 March 2018 has already been secured and over 60 per cent for March 2019"That's impressive, one builder I could mention couln't claim much better than 80% of the profit for the current year in the final month! I guess the TEF claim needs to be read along with the risk statements but it shows great confidence. The strategy in a tough London market seems to be playing out much as the board said it would, plenty of reasons for optimism. The big question for me is why the market has undervalued TEF by so much and even after the recent rise it is hardly at a demanding SP. I live in hope of a re-rating, TEF and GFRD are my only remaining holdings of builders, neither is a typical builder, for different reasons. My TEF holding is small but happy to watch what happens. H2 .
ookyfly
05 Apr 2017
Excellent RNS I'm very satisfied with my large (for me) holding in TEF. Compelling business model in a house building sweet spot.
ookyfly
30 Mar 2017
Re: Telford announce 4th Build to Rent sale ... Mentioned in Tempus this morning as a p.s.
uselessbaba
29 Mar 2017
Telford announce 4th Build to Rent sale for £53.7m. Telford Homes Plc('Telford Homes' or the 'Group') Fourth Build to Rent sale for £53.7 million Telford Homes Plc (AIM: TEF), the residential property developer focused on non-prime London, is pleased to announce that it's joint venture, Chobham Farm LLP, has exchanged contracts for the sale of the first phase of open market homes at New Garden Quarter, Chobham Farm, Stratford, E15 to Folio London Limited ("Folio London"
. Folio London is a subsidiary of Notting Hill Housing Group, the Group's joint venture partner in Chobham Farm LLP. The contract with Folio London represents the Group's fourth significant build to rent transaction to date and involves the sale of 112 of the 297 open market homes at New Garden Quarter for a net cash consideration of £53.7 million. The development is underway and completion of the build to rent homes is anticipated in 2018. The remaining open market units, which form the second phase, are expected to complete in 2019 and will be launched at a later stage from the Group's Sales and Marketing Suite in Stratford. The sale is on a forward funded basis and will comprise an initial upfront payment followed by regular payments throughout the remaining construction period. As a result of this transaction the joint venture will no longer require any external debt finance for the entire New Garden Quarter development which saves significant anticipated funding costs and reduces the Group's longer term gearing requirements. Jon Di-Stefano, Chief Executive of Telford Homes, commented: "We are delighted to announce our fourth significant build to rent transaction which underlines our commitment to this emerging sector and in this case further strengthens our relationship with Notting Hill Housing Group. Telford Homes is now developing 483 build to rent homes across the four transactions that we have announced since February 2016 and we will continue to actively look for appropriate opportunities to increase this number in the future."
Eadwig
15 Feb 2017
Re: Testing post Brexit highs (again) Eadwig: "so the chances of a Bank of England rate hike have receded somewhat. "None this year or next year" as an analyst said on BBC yesterday I think is over-optimistic, however."Two more analysts on the BBC this morning both saying no Bank of England rate rise until 2018 at the earliest.I think inflation may force their hand later in the year, but I'm an amateur and these analysts do it for a living. The slower than expected rise in inflation yesterday appears to have confirmed their existing projections judging by their confidence.Worth mentioning, I think, because even though I don't think the first few rate hikes, whenever they come, will affect house sales (mortgages will still be extremely cheap), you can bet your life the markets hit the stock prices of house builders at every rise announcement.Also, if rate rises DID affect house sales negatively, I would expect the government to take measures to offset the effect given their target for new house completions by the next election - especially at the TEF end of the market.
