Commercial property bloodbath not over

I recently suggested selling short shares in property group, Brixton, at 80.25p. This was good advice.

The latest price is 14.25p as investors wonder how the company is going to solve its balance sheet issues.

Effectively the company is stuck between a rock and a hard place.

Nobody wants to buy industrial warehouses, so any sales are likely to be at heavily discounted prices, which will raise uncomfortable questions about the value of the remaining portfolio.

Share issue will effectively consolidate destruction
Alternatively, it could go for a share issue, but with the shares down 96 per cent from the peak, this will have to be so dilutive as to effectively consolidate the destruction of shareholder value that has taken place.

The fate of Brixton has alarming implications for the whole commercial property sector.

...