In the month that Europe's listed property companies come together for their annual conference - this time in Berlin - PropertyEU turns its attention to the sector and analyses what it means to be in the public glare.
We hope you had a good summer break (if that is what you had in what seems like a busy few weeks), and welcome to the September issue. This month, we turn our attention especially to Europe’s public property companies.
When we do this each year, I am always reminded by how different it is to be in the public glare as opposed to running a private company. The benefits such as prestige, wider investor base and capital-raising advantages come at a price – accountability to those outside the business and often some lack of control over forces determining the share price. And, when the stock price doesn’t even move for a great business, it can be frustrating – just ask The Blackstone Group.
If things go really wrong, of course, it can be a humbling experience. As we report on page 38, Countrywide, the listed UK property services firm in which Oaktree Capital is the largest single shareholder, is an example of a public group enduring a torrid time. How that story ends remains unclear. Furthermore, public companies sometimes cannot win. For example, when debt is cheap the analysts will be on the earnings update call asking why the company isn’t taking advantage of favourable lending terms. When interest rates go up, they will
immediately express concern about leverage ratios. Which begs the question, what level of gearing is appropriate for a listed property company anyway? Well, one company believes many are being irresponsible right now. For an interesting take on debt levels among Europe’s listed companies, check out page 12.
But it is not all angst and frustration as a listed firm! There is the exhilaration of a successful IPO and the prospects for growth that come with it. And guess what? Sometimes share prices can even go up and stay above the IPO price for a meaningful amount of time!
Such a scenario is captured very well by editor-in-chief Judi Seebus in her interview with Corestate Capital’s new CEO on page 8. There are more articles inside this issue on the listed sector, which I hope you will enjoy. But we haven’t neglected the private industry either. We have our annual developers’ ranking, deal analysis and various market watch sections.
At this stage of the cycle, it is crucial to remain true to investing and client service principles that will stand you in good stead. The headteacher at my children’s primary school liked to quote Joyce Meyer: ‘Integrity means that you are the same in public as you are in private.’
Robin Marriott, Deputy editor-in-chief