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The week's question
In March 2025, in the thread "Re: OT, out", Umm asked the members: "Do you think it is because America is made up of magical soil that makes businesses based in America magically profitable?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: mungofitch ✹✺🐝 SILVER
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Number: of 22352 
Subject: Re: Unite Group (UTG), UK, falling knife.
Date: 03/02/26 10:42 AM
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So basically every single sale across these 10 sites, was sold at around 1% discount to the most recent book value before the sale...
All the evidence to date in the last year, across 10 site sales, including both London & non-London sites, suggests Unite's book value estimates are accurate and that they can achieve those prices.


I personally would not take too much comfort from this *specific* point. There have been cases of extremely large and reputable funds, that later turned out to be in a spot of bother, selling some properties at or above book value apparently for the purpose of demonstrating publicly that their book value was fair across the portfolio. Which it wasn't.

The thing is, the properties sold are never a random sample...they're some unknowable mix of the ones that they wanted to sell for valid business reasons, the ones that they COULD sell, and the ones that could be sold for a price that looked good relative to their current book value. Property managers know full well that investors look at the recent sale history and habitually draw the wrong conclusion from it.

I am absolutely not saying that is the case here, and my comment is nothing to do with Unite. But I am willing to say that, across the entire property sector, a firm selling some properties at booked value is not ANY kind of evidence that the portfolio in aggregate is worth its booked value. (Perhaps even slightly negatively correlated: if they were good managers, they'd probably be selling their worst dogs, and those are the ones most likely to have impairments when it comes to real world hard money sale prices).

To push an analogy past the point of usefulness, it's like someone without a source of stock quotes (there are no quotes for individual properties) reasoning that since I could sell one of my stocks for twice what I paid for it, they must all be worth about twice what I paid. Without knowing precisely why I sold that particular one, there isn't much you can infer.

Jim
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This community has written 589 posts about Non-US Stocks. The article-length ones it recommended most:
Greggs PLC (GRG.L) · 21 recs · 2025
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Unite Group (UTG), UK, falling knife. · 13 recs · 2025
SKAN · 11 recs · 2025
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