RE:NAVs Meaningless in Current Reit EnvironmentHey When2buy,
I find your point of view interesting. You describe BPY as just another REIT, which of course it is.
My thesis has been that BPY is the real estate arm of BAM that Bruce Flatt grew to prominence in and I read an article a couple years ago that BPY CEO Kingston is in line to succeed Bruce Flatt at BAM. The other part of my thesis is the acquisition of GGP, where they diluted shareholders substantially, was a stepping stone to a new real estate world for BPY. And it traded at a substantial discount to NAV and so there was upside and growth.
And so I have been waiting and waiting for the "magic bullet" and of further concern, Kingston has not resembled Flatt at all, in my opinion. And now the COVID panic.
So, I don't worry about the payout ratio. Lower the dividend or suspend it temporarily. The BAM people are creaters of value.
My question is, is BPY a pre-eminent TSX 60 real estate company, or NOT. The market is saying its not and BAM has a pathetic investment of US$4B in its "Flagship" real estate company. And its sitting under some $40 billion of non-recourse debt.
My updated thesis that Bruce Flatt either has the capacity to fix it or steal it.
I continue to bet he won't steal it! If he does steal it, I will never invest in a Brookfield entity ever again.
Vette