2009/11/19 Adrian Stott <[email protected]> > Martin Clark <[email protected]> wrote: > > >If BW had managed in the past to set up sufficient real estate to > >generate enough expected income to run the waterways, what would have > >happened now, in the depths of a recession, where their income from > >property has dropped below the expected levels? How would the shortfall > >have been made up? > > Most (almost all?) of the recent "losses" on real estate shown in BW's > books are the result of revaluing the properties it (still) holds. In > other words, they are bookkeeping losses ("uncrystallised"), not > requirements that BW has to make up by paying in cash. In most cases, > BW is still receiving rents on those properties it has leased out. > > As a result, the cash that it has to spend, derived from its real > estate operations, has been (relatively) little affected by the > recession. > > So, in your hypothetical, BW would still have the cash it needs to > cover its maintenance costs. Its profits on sales (and its capital > available for reinvestment) would fall for a while, though, as I > suspect it has the sense to delay disposals until the market recovers. > > So there isn't really a "shortfall". > > Adrian > > What a load on nonsense you talk. By this definition no one would ever lose any money on any asset; it would just be a matter of waiting until the asset value rose again.
Ever heard of the concept of 'yields?' The things that have been falling like a stone in the London property market way before the banking crisis? Steve [Non-text portions of this message have been removed]
