Woolworths selling $900 million of property...

Got any really nitty gritty details chilliblue ??

Not looking for glossy summaries or overviews.....after the hard core detailed stuff.

probably at the top of the list

- Tenants not paying rent

Edit: Well woolies will lol, just the smaller shops operated by johnny bananas
 
probably at the top of the list

- Tenants not paying rent

That is if they're lucky to get tenants.

Woolies opened a new arcade near here a couple of months or so back as part of a new supermarket development.

Out of 8 shops approx, Woolies used one as a liquor outlet and was able to get leases in two (Bakers Delight relocating from around the corner and a fingernail parlour).

The rest are vacant.

The promised restaurant on the top level hasn't yet materialised.

The new arcade opened after a long period of building works, during which the local Retravision closed down and vacancy rates in the rest of the shopping strip rose (now around 10 - 20%).

The supermarket is thriving, but the small shops don't seem to be.
 
the main purpose i suspect is to increase the future Return on Equity of WOW shares which will increase the valuation. If the sales proceeds can be reinvested at a higher rate of return than the implied rental return, then the future ROE will increase.
 
On saying what I said earlier, all large property developers have timelines for all projects.

From the beginning to purchasing the greenfield site and waiting 10+ years for the area to catch up (or 50+ as Westfields is landbanking some its sites).

To whether they are sold as a finished centre with the supermarket lease locked up or they hold onto the site for redevelopment potential or they hold the property until their criteria changes.

These companies are doing nothing different to what the majority of us are doing.

Continuely re evaluating their assets and seeing where there money does best in.
 
.......and seeing where there money does best in.

Exactly. They have a massive amount of money to spend on the new hardware venture so it makes sense to flog off a few shopping centres at full price and pay the new owners 8%. That money will be put to much better use knocking Bunnings about a bit.

Gools
 
Or adding a lot more liquor shops, pubs and clubs with lots of pokie machines to the portfolio which is where the bulk of their money comes from.

It is scary when people think there primary business is the supermarkets.
 
That's right, lots more to them than meets the eye. The most interesting division I think is their Electrical sales in India. Has gone from $0 a couple of years ago to $150m or so the year just gone with very little CAPEX. Now that's some handy sales right there.
 
i was reading on morningstar that woolies are happy to keep them until they get good price.

A sell off of 900 mill in property from such a strong company obviously has had some close consideration

Regards,

RH

I have read they are doing a share buy-back at 700~ mill, plus still paying their normal dividend. This will probably will help resolve the discrepancy between their 09-10 FY cashflow position and the funds to do the buy back and pay a dividend.
 
Or adding a lot more liquor shops, pubs and clubs with lots of pokie machines to the portfolio which is where the bulk of their money comes from.

It is scary when people think there primary business is the supermarkets.

Pubs and clubs are like the thorn of Woolies.

Looking @ the 2010 end of year statement

Total group sales: $51.4bn
Total sales from pubs/hotels: $1.012bn

So Hotels compromise 1.97% of total group sales.

So i wouldn't consider the "bulk" being 2% of sales the main money driver of the business. Their primary business is supermarkets and they do supermarkets very well
 
Pubs and clubs are like the thorn of Woolies.

Looking @ the 2010 end of year statement

Total group sales: $51.4bn
Total sales from pubs/hotels: $1.012bn

So Hotels compromise 1.97% of total group sales.

So i wouldn't consider the "bulk" being 2% of sales the main money driver of the business. Their primary business is supermarkets and they do supermarkets very well

WOW is only in pubs and clubs to circumvent liquor licensing laws in QLD. I agree that supermarkets is still by far their most important business but that includes liquor sales (excluding those in pubs/clubs).

IMO, consumer electronics is the odd fit and is relatively unprofitable.
 
Pubs and clubs are like the thorn of Woolies.

Looking @ the 2010 end of year statement

Total group sales: $51.4bn
Total sales from pubs/hotels: $1.012bn

So Hotels compromise 1.97% of total group sales.

So i wouldn't consider the "bulk" being 2% of sales the main money driver of the business. Their primary business is supermarkets and they do supermarkets very well

Unfortunately you are under estimating that sheer buying power that their are able to attain buy holding those assets - not to mention the landholdings.

That is the reason that commenced buying pubs and clubs.
 
Unfortunately you are under estimating that sheer buying power that their are able to attain buy holding those assets - not to mention the landholdings.

That is the reason that commenced buying pubs and clubs.

spot on - it's like maccas - it's not about the food, but the underlying RE and value of said RE with a multinational tenant.
 
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