The Swedish Corporate Real Estate Crisis [2022 to ?]

[EgonKuhn]

43 minutes ago, John Hjorth said:

 

Thanks, Egon,

 

Please also see CofB&F topic : The Swedish Corporate Real Estate Crisis [2022 to ?]

 

Swedish menu card [] :

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Now who are in control of their sch*iße, and who are running a semidead zombie business with big arm movements for borrowed money?

 

SBB has basically disingrated midair after I opened the topic mentioned above, others are chugging along as if almost nothing has happened, nose in the track, others more or less wounded and weak.

 

-It's a fascinating space. 

Changing gears to the right thread here. I guess "K-Fastigheter" is something else than "Wihlborgs Fastigheter AB", so "Wihlborgs Fastigheter AB" isn't there in this graphic?

 

The working hypothesis for all these Northern European and ultimately virtually all European REITs/REICs seems to be that Europe will never return to a growth trajectory again and that interest rate levels will therefore remain relatively low forever.

 

One can certainly take that view, but I would feel somewhat more at ease if they were reducing their debt levels much more aggressively. Yet I don't see that happening anywhere neither with Germany’s Vonovia for instance nor with the Swedish companies. Whatever additional rental income comes in is swallowed up by steadily rising interest expenses. Consequently they are essentially treading water when you look at FFO trends over the last few years.

 

Have you ever come across an example of a European RE play significantly deleveraging currently, moving toward a Debt/EBITDA ratio of for instance 5, like the major US multifamily REITs?

[John Hjorth]

Egon [ @EgonKuhn ],

 

I appreciate the discussion here. 

 

30 minutes ago, EgonKuhn said:

... I guess "K-Fastigheter" is something else than "Wihlborgs Fastigheter AB", so "Wihlborgs Fastigheter AB" isn't there in this graphic? ...

 

Please see green box called 'Fam Paulsson', upper part of chart, with a line to box 'Backahill', with a line [11%] to a box called 'Wihlborgs'.  - Yeah, the whole chart appears quite confusing, until one starts trawling  through some of the companies, looking at them.

 

You can call my approach a 'jockey stock approach' - trying to assess and judge who are competent and not inept.

 

Backahill is an awesome private company, doing its thing  mostly under the radar. The Paulsson family members are far from inept, to me. [ Link, Link ]

 

50 minutes ago, EgonKuhn said:

... Have you ever come across an example of a European RE play significantly deleveraging currently, moving toward a Debt/EBITDA ratio of for instance 5, like the major US multifamily REITs?

 

No, Egon [ @EgonKuhn].

[EgonKuhn]

1 hour ago, John Hjorth said:

You can call my approach a 'jockey stock approach' - trying to assess and judge who are competent and not inept.

I see. Of course I could stare at the endless rows of figures in TIKR for ages and still be none the wiser in the end

 

If I understand you correctly, your impression from three years ago has been confirmed, and you’ve stuck with the investment vehicles of Paulsson and Lundberg, or perhaps even added to your holdings from time to time?

 

Here in Germany my impression of REITs and REICs is that, while they somehow muddle through, they are ultimately treading water operationally. They are running, yet practically getting nowhere. Like a hamster on a wheel.

[John Hjorth]

43 minutes ago, EgonKuhn said:

I see. Of course I could stare at the endless rows of figures in TIKR for ages and still be none the wiser in the end

 

If I understand you correctly, your impression from three years ago has been confirmed, and you’ve stuck with the investment vehicles of Paulsson and Lundberg, or perhaps even added to your holdings from time to time?

 

Here in Germany my impression of REITs and REICs is that, while they somehow muddle through, they are ultimately treading water operationally. They are running, yet practically getting nowhere. Like a hamster on a wheel.

 

Egon [ @EgonKuhn ],

 

Let's have some fun - it's Friday, right!? 

 

I know on the distance personally, professionally the CEO of Backahill put there by the Paulssons - it's certainly not a coincidence - because he is a pure play, 100% distilled unreasonable, endlessly demanding, bad manners a$$hole, sucking every available kJoule out of everyone around him for his own benefiit alone - however, he may have changed since then by now, though.

 

At a moment in time I said to my boss, when I asked to be relieved from him [the Backahill CEO] in another context , getting an 'Absolutely NO!, -Period! - Just do as I ordered you.' : 'Ok then, but do never place me in a room with him, I may poor this little fat gnome out of the window!' <which got respected> 

 

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Pretty cool to have such a guy sitting around on boards watching over the Paulssons - and my - capital! 

Edited 18 hours ago by John Hjorth

[EgonKuhn]

2 minutes ago, John Hjorth said:

 

Egon [ @EgonKuhn ],

 

Let's have some fun - it's Friday, right!? 

 

I know on the distance personally, professionally the CEO of Backahill put there by the Paulssons - it's certainly not a coincidence - because he is a pure play, 100% distilled unreasonable, enlessly demanding, bad manners a$$hole, sucking every available kJoule out of everyone around him for his own benefiit alone - however, he may have changed since then by now, though.

 

At a moment in time I said to my boss, when I asked to be relieved from him [the Backahill CEO] in another context , getting an 'Absolutely NO!, -Period! - Just do as I ordered you.' : 'Ok then, but do never place me in a room with him, I may poor this little fat gnome out of the window!' <which got respected> 

 

- - - o 0 o - - -

 

Pretty cool to have such a guy sitting around on boards watching over the Paulssons - and my - capital! 

It's often better to not know so well, how the sausage is made

[Spekulatius]

10 hours ago, EgonKuhn said:

I see. Of course I could stare at the endless rows of figures in TIKR for ages and still be none the wiser in the end

 

If I understand you correctly, your impression from three years ago has been confirmed, and you’ve stuck with the investment vehicles of Paulsson and Lundberg, or perhaps even added to your holdings from time to time?

 

Here in Germany my impression of REITs and REICs is that, while they somehow muddle through, they are ultimately treading water operationally. They are running, yet practically getting nowhere. Like a hamster on a wheel.

Exactly. European REITs are just not great. leverage is too high. if things go good, the stocks just do Ok. If things go against them , the stock a solute get trashed and you are probably looking into diluted capital raises. I have tried in the past several, like Vastned, lured in by large discounts  to NAV. That did not work out and I sold after seeing the KPI‘s slowly getting worse.

I am invested in  US multifamily REITs which have lower leverage and are more tax efficient for me.

 

Why even try? I think there are many many better opportunity out there that European REITs.

[John Hjorth]

17 hours ago, EgonKuhn said:

It's often better to not know so well, how the sausage is made

 

LoLz!  [Never heard the expression before!]

Edited 1 hour ago by John Hjorth

[John Hjorth]

7 hours ago, Spekulatius said:

Exactly. European REITs are just not great. leverage is too high. if things go good, the stocks just do Ok. If things go against them , the stock a solute get trashed and you are probably looking into diluted capital raises. I have tried in the past several, like Vastned, lured in by large discounts  to NAV. That did not work out and I sold after seeing the KPI‘s slowly getting worse.

 

I am invested in  US multifamily REITs which have lower leverage and are more tax efficient for me.

 

Why even try? I think there are many many better opportunity out there that European REITs.

 

Egon [ @EgonKuhn ] & @Spekulatius,

 

@Spekulatiuss points above are valid.

 

Related to tax efficiency, @Spekulatiuss commment may as far as I understand relate to you, Egon [ @EgonKuhn ], while it is not relevant for me, holding this basket stuff in Danish tax deferred accounts [I get credit in Danish taxes for foreign withheld dividend taxes].

 

Related to why even try? I'll mention I have looked at the rest of Europe at that time, also, but never engaged in anything at that time.

 

In stead of trawling through long lists of listed companies I did download to a spreadsheet the total portfolio of NBIM [Norges Bank Investment Mangement], and turned on some filters [country, real estate] to take a tour in Europe looking around. [Link ]. [NBIM stocks likely picked by one of many investment mandates, Nicolai Tangen is too busy doing podcasts!].

 

I did not feel comfortable at any of that stuff, knowing nothing about local conditions, regulation and such.

Edited 13 minutes ago by John Hjorth