Times are getting hard and in the next fortnight 4 of the UK's biggest homebuilders /developers will announce half-year trading updates and the news will not be good.
Taylor Wimpey is in talks with its largest institutional shareholders for a £500 million bale-out as we hit the lowest levels of house sales since the 1970s. Barratt is £1.8 billion in debt and is in discussion with its lenders and Persimmon and Redrow are also set to make announcements.
If you thought that Commercial Group Properties (CGP) had a problem with a fall in share value from 350p to 115p then compare this with Wimpey falling from 350p to 62p and Barratt's drop from £10 in June 2007 to 65p this month. One begins to wonder if anyone will be in a position to build homes at Westwood Cross or cover our country-side and aquifer in warehouses.
The Bank for International Settlements (BIS) is predicting that the world economy is heading for a deeper crisis than was expected and some of the world's biggest economies may move into deflation. On China, last year it described the Chinese economy as 'unstable, unbalanced, unco-ordinated and unstable'. It has not said the same this year but has said that the effect of a US slowdown ( 20% of Chinese exports go to the USA) could cause a sharp fall of Chinese imports to the US and problems for Chinese exporters. One must assume with an 11%/15% fall in the value of the £ that Chinese imports to the UK will not only be more expensive but will also slow down as we all concentrate on petrol, gas, electricity and food price rises.
I am not a developer or businessman but it seems to me that Chinamex may well be wondering if it can really afford huge expensive 'Gateways' all around the world at the moment. This would not be good for CGP. I should imagine also that CGP is holding its breath and keeping its fingers crossed that its debt will not cause it problems and that its share price will hold as others tumble around it. If we are finding cash-flow a pinch at the moment, you can bet that others are too.
Click to expand the historic Thanet pictures, some thoughts on shops and
shopping in Ramsgate and of course a Christmas ramble
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So starting with some archive photos of Ramsgate shops.
Of course back in the day Ramsgate was full of, "are you being served"
shops, a situation base...
14 minutes ago