Maybe they have used those proceeds for stock buyback for themselves. Just guessing.
Regards,
Vikas
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Posted earlier… still following up with no adequate response … frustrating …
Request people to also write emails so that they know this is not going to be DIGESTED easily !!!
Speak up !!!
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If the company is dodging such questions, it directly points to the Governance issues. It is a red flag for all retail investors, would be good if we can raise this question together on a platform. Can we raise it with SEBI?
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Why someone will invest in NESCO instead of REIT.
Big work space providers would be the preferences would for the business IT Parks as to keep up with the competitor. Coworking space in Bangalore, IT Parks in Delhi gives out huge opportunities for these service providers, and who at that point tweak it according to customer prerequisites, deals with everyday office tasks and rents out to organizations. Everybody is up on their toe and upbeat toward the end.
Obviously once the current COVID scenario the demand had dropped down and it was depleted it’ll fit well for them to utilize all money their current structures and organizations which toss out for making all the more land.
better business mix than just real estate rental income, better management and balance sheet , past performance are some of reason for me to prefer nesco over reit.
Actually, NESCO and REIT are both plays on real estate but are fundamentally different. REIT is a relatively lower risk play with bounded upside. On the returns part, regulations and the very high occupancy ensure returns are likely to be very stable. However, there are no optionalities that can play out. On the other hand, in NESCO nothing is guaranteed - dividends or expansion. However, given they land bank, the potential return is much higher.
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adding into fundamental aspect:
Nesco is at 0.5% div yield where as Embassy REIT is at 7% div yield
Nesco is debt free,Embassy REIT is paying 60% of net profit as interest.
Nesco is pledge free, Embassy REIT has 80% share pledges
Nesco is concentrated at Mumbai where rental yield would be higher how ever has risk of over concentration in one city and possible disruption because of upcoming Reliance sez. Embassy has proven record of more than 15 years .
Nesco could show exponential growth in profit before earning mature at rate of rent growth rate where as Embassy REIT has mature straight line earning. growth.
Embassy REIT has advantage of more cash distribution but I see Nesco beating it handsomely in share price growth.
still it would be interesting to compare its return vs REIT over next 5 years.
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The 2% dividend yield is incorrect for Embassy. Total returns for last year was Rs 24 per unit to the unit holders and this year shd be 22-23 per units that is close to ~6.8% div yield.
Thanks Ajay. my bad. I went with screener’s data.
Yes, REIT for both Embassy and Mindspace is 6.5-7% range based on current rent. Also, significant part of it is tax-free as both REIT have gone with older tax structure in which tax is not applicable. REIT in my mind is very close to buying a commercial property in a fully developed office area - where upside is capped but you have peace of mind with a stable rental income. REIT minimizes the risk further as you are getting money from a large number of tenants (so tenant leaving risk is very low). In Nesco, one is clearly looking for growth with risks that are in line with an equity portfolio.
Disclosure: Invested in Embassy, Mindspace as well as Nesco.
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Hotel management can be outsourced to other third party sources too, but it entirely depends on the team on how they go about in doing it. The one and main thing is budget and need, so that will vary accordingly with their work too. I found that shared office providers like coworking space Gurgaon, Mumbai and Bangalore, this places have service providers to outsource your management.
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Exhibitions are being started from Feb, 12-14 feb there are two exhibitions and in march 8 exhibitions , this detail is available on their site under upcoming exhibitions , also out of them 3 are organised by NESCO only which is indicating positive sign as it will improve margins
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Commercial Real Estate: Deflecting the Covid Curve ball:
Asia pacific market including India picking up, green shoots visible & Some forward commitments have been made in the last quarter.
Rentals still holding except in Retail and Hotels.
Regulatory reforms in India for Reits in the recent budget encouraging.
Reits in India in office sector(ITES Sector)
Office is not just a building but now an experience with lot of emphasis on health, wellness and safety.
Amenities are an obligation for the landlords now.
Air quality, Temperature checks, UV light optimization, Voice enabled lifts, tracing and communication networks etc.
Occupiers are far more discerning.
Move from ‘WE-Space’ to ‘ME-Space’.
WFH will also remain and continue to stay.
Commute(especially in India) is a big challenge + Job Role.
Technology has brought much more flexibility.
Office is critical because we are all social beings.
Need for office space has reduced.
Many MNC’s not yet ready to come back to work.
Some activity reviving from April-May.
Grade A spaces will be the winner.
Occupancy improving across most of the business parks.
40% occupied by Tech Sector(unchanged yoy)
Tech, Financial, Consulting and Engineering sectors key clients.
Lots of hopes riding on Vaccination of majority by Q3CY21.
May reach 70-80% of the pre-covid levels by then.
Public transport availability critical.
Demand for townships on the rise-walk to work.
Need for larger spaces in Homes.
Weekend home sales have jumped.
Tenants are moving from CBD to Peripheral residential areas.
demand in tier2 & tier3 going up driven by WFH.
Emerging growth sectors:
Micro delivery E-retail now become a habit.
Ed-tech.
Health-tech.
Large developers - mostly family run ,have a Institutional partner.
Sector will become institutional play.
Use of Technology in property management is very low at this stage.
De-densification will soften the downward pressure on rents.
PS:please excuse if there are any errors.
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amazing tech, its impact on commercial real estate might be quite damaging for commercial real estate.
wfh isnt going to go away without a fight
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Update from the latest management meet. Source: Nirmal Bang.
NESCO-Management-Meet-Update-19-March-2021.pdf (507.2 KB)
Disc: Invested and adding.
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If you plan to invest in Nesco, this is a good enough time to start SIPping into the stock. The cash is not going away anywhere. While WeWork has reduced the office space rented by it in the new building, other tenants were still holding strong as of last quarter.
With cash flow from the exhibition business not coming in, construction of the new building may be delayed by a year or two.
disclosure:holding
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Can someone explain why NESCO stock is falling?Is it just due to COVID impact or something else.Considering Cash flow and No Debt,shows deep value ,may take longer time to bounce back.
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My thinking on this.
With second wave, again the exhibition hall will be taken up by BMC for few more months. And so no big exhibitions will be allowed for few more months. So obviously revenue coming from the exhibition centre is gone for the coming quarter for sure. And with second wave in full swing, again ‘work from home’ will be preferred by most of the corporate tenets. And few of them may totally opt out in coming quarters.
So all these risks are reflected in the current stock price.
This is my guess.
About investing in NESCO, it’s a perfect 'DULL & BORING ’ " GREAT" business available at FAIR valuation.Again my personal opinion.
Regards,
Vikas
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