then even more reason to stay put (on a pure gut feeling with zero research). Hibernian, is Aviva, right? Aviva's Norwich Union and they've recently announced big mark-downs in values on their property investments and I guess this will be feeding into one of them. I don't think anyway there is a problem fundamentally with the process there from what I know and 'you' (Euro investor) will be hurting a little more due to the yield difference between £ & € when hedging it. Good article on it in the FT if you have an account. Good luck.
Hibernians spectrum bond going through the floor
- Thread starter johnodkc
- Start date
Thanx for the advice. I think I might hold on and take my chances. Surely it cant get much worse...!
A
Another John
Guest
I've just seen this thread
, the U.K. commercial property market has further to fall according to commentators in yesterdays Financial Times. The comments came from Schroders and others. They expect a further 10% to the bottom.
This market fall was well telegraphed by the large U.K. REITs falling 25% below net asset value early this year.
The Large REITs are now 40% below net asset value which with the effects of gearing are forecasting a 25% fall in U.K. commercial property.
I hope this helps.
Another John
, the U.K. commercial property market has further to fall according to commentators in yesterdays Financial Times. The comments came from Schroders and others. They expect a further 10% to the bottom.This market fall was well telegraphed by the large U.K. REITs falling 25% below net asset value early this year.
The Large REITs are now 40% below net asset value which with the effects of gearing are forecasting a 25% fall in U.K. commercial property.
I hope this helps.
Another John
What they are actually doing is advising people to cash in!
GET OUT NOW TO CASH
The UK correction is only starting and the subprime mess there is as bad as the states - Northern rock 130% "liar loan" mortgage anyone..........
Derryman,
Another well argued and cogent response. Sounds like the Financial Advisor in this case.
The typical kneejerk reaction is to encash when markets have fallen and only to re-invest when they have risen. Thus losing out on both sides.
If the Financial Adviser was recommending this investment 18 months ago and is now suggesting bailing out after a fall, it suggests that the initial premise for the strategy was flawed (on both sides?). If your timeframe is still 5 years or longer I would stick with it.
Another well argued and cogent response. Sounds like the Financial Advisor in this case.
The typical kneejerk reaction is to encash when markets have fallen and only to re-invest when they have risen. Thus losing out on both sides.
If the Financial Adviser was recommending this investment 18 months ago and is now suggesting bailing out after a fall, it suggests that the initial premise for the strategy was flawed (on both sides?). If your timeframe is still 5 years or longer I would stick with it.
I'd agree with Conan; actually seems like the 130% loans are a small part of the UK banking system and in any event wouldn't necessarily impact the activities of a commercial property fund (other than sentiment). All the banks in the UK have been reporting negative news relating to subprime, but importantly, not ugly surprises as in Merrill Lynch's case. RBS and Alliance and Leicester have both been better than expected. The real exposures are no longer sitting on the Banks' books, they've long gone elsewhere.
Conan - you would not be a financial advisor (you seem to offer quite technical pensions advice for a punter) - would you?
The OP was very clearly sold a product that he/she did not understand - the UK property market is starting to drop - he may have missed the peak to get out but is IMHO quite far away from the precipitous bottom - clearly an informed judgement call is to get out until he / she understands
I would advise moneyweek.co.uk or ft-alphaville if anyone wants an informed view of the UK markets - without the VI financial advisor BS.
BTW while we are at it - the irish property correction, the ISEQ correction - the signs were all there to see if the eyes were open and VIs shut up
Ah yes - I have ducked both bullets in the last year by being informed.
If it was a highly leveraged geared property investment with no capital guarantee and the fund is barring the exit with penalties - the prognosis is not good
If however they simply bought a commercial office in the city of London on an outright cash purchase basis (highly unlikely - haha) - the sky will not fall in
Derryman,
Rather that say "I told you so" (after the event) I have attempted to respond to the position that the original poster is in (rather than the one you think he should not have entered in the first place).
Am I a financial adviser (though that does not necessarily make my views less relevant). I have no connection to Hibernian.
Telling me (or the original poster) that the "signs were all there to see" does not change the current position. With hindsight the signs are always clearly marked. But the correction in the Irish Property market has been predicted for about the last 8 years (David McWilliams et al) The media etc are littered with those who have predicted 7 of the last two corrections. Looks like their time has come to tell us all how right they were.
But if you had been in Cash for the last 8 years or so (as opposed to UK property, Irish property or the ISEQ) would you be better off? I suggest not.
Can I again suggest that trying to time the market is like fools gold. If the OP can still take a 5 year view I believe the best decision (based on where he actually is) is to stick with it.
Just my opinion, I dont claim to be a clairvoyant.
Rather that say "I told you so" (after the event) I have attempted to respond to the position that the original poster is in (rather than the one you think he should not have entered in the first place).
Am I a financial adviser (though that does not necessarily make my views less relevant). I have no connection to Hibernian.
Telling me (or the original poster) that the "signs were all there to see" does not change the current position. With hindsight the signs are always clearly marked. But the correction in the Irish Property market has been predicted for about the last 8 years (David McWilliams et al) The media etc are littered with those who have predicted 7 of the last two corrections. Looks like their time has come to tell us all how right they were.
But if you had been in Cash for the last 8 years or so (as opposed to UK property, Irish property or the ISEQ) would you be better off? I suggest not.
Can I again suggest that trying to time the market is like fools gold. If the OP can still take a 5 year view I believe the best decision (based on where he actually is) is to stick with it.
Just my opinion, I dont claim to be a clairvoyant.
Two things you should consider: No other poster has an investment in this fund, so no one else is exposed to the same risks as you. Therefore, you should be somewhat circumspect on the advice given. Also, as this fund is closed, its factsheet or prospectus are not on Hibernian’s website so no one can analyse the product, and give you advice on it.
For what it’s worth, I think this is probably the same fund as the Hibernian UK Property Fund but you have bought a geared version. I’ve checked my holding in the non-geared fund and it’s down about 12%. Am I worried? No, because I think property funds are very long term investments (i.e. ten years min), also I don’t think that total property should be no more than 15 - 20% of your total portfolio.
If we are talking of the same fund, the 10 buildings in the fund have tenants and are providing cash flow (as they were when the fund was sold to you) but, as they are required to do so, the fund managers have marked down value of the buildings to reflect the decline in UK commercial property. As you have a geared fund, you will, therefore, experience more dramatic falls in value.
In the immediate future, I think that values of UK commercial property may well fall, and, in this connection, you could look at these post on the UK Motley Fool site: [broken link removed] and [broken link removed]
If this happens, you will suffer significant greater reductions in value because you are geared. (But you may also experience greater increase in value when / if UK commercial property recovers).
Also, based on the Motley Fool posts, it’s not beyond the bounds of possibility that redemptions may be suspended or (more likely) that Hibernian will continue to decrease the value of units – thus protecting investors like me who are in for the long term.
For what it’s worth, on the principle that you shouldn’t invest in anything you can’t afford to loose, I’d stick with it, but you are looking at possible continuing and immediate declines in value and a long time to recovery.
(I’d also shoot your adviser.)
Dear John
I hope you beat a hasty exit when advised several weeks ago - the fat lady is back in the dressing room and the stage hands are sweeping up, double or quits time I think.
"Hibernian has become the first fund manager to impose exit penalties on investors trying to flee Irish commercial property. The company imposed a 12.25% exit penalty on Thursday on those quitting its Irish property fund and a 24.9% on those leaving a geared version of the same fund. "
Fund moves to stop Irish property exit
Sunday Times Dec 16, 2007
I hope you beat a hasty exit when advised several weeks ago - the fat lady is back in the dressing room and the stage hands are sweeping up, double or quits time I think.
"Hibernian has become the first fund manager to impose exit penalties on investors trying to flee Irish commercial property. The company imposed a 12.25% exit penalty on Thursday on those quitting its Irish property fund and a 24.9% on those leaving a geared version of the same fund. "
Fund moves to stop Irish property exit
Sunday Times Dec 16, 2007
If you are invested in property you should have expected about 12% to be deducted from your value at some stage. It's pure luck if you avoid these costs, and certainly no penalty that you do incur them. If you buy any property and then sell it, you would incur about 12% costs in doing so (stamp duty at 9% is the main cost, but there are estate agent and solicitor fees, for both the purchase and the sale, making up the rest). These costs don't disappear by magic if you are investing in property through a fund.
Yes I can just see the small print that John was referred to -
terms and conditions apply,
share price can rise and fall,
currency fluctuates
and we reserve the right to SLAM the door on any nervous investors with a WHOPPING +24.9% tax on your already considerable +25% losses - nervous yet???
Ye Har -- the financial buccaneer rides again
terms and conditions apply,
share price can rise and fall,
currency fluctuates
and we reserve the right to SLAM the door on any nervous investors with a WHOPPING +24.9% tax on your already considerable +25% losses - nervous yet???
Ye Har -- the financial buccaneer rides again