The Local Shopping Reit Share Discussion Threads

[badtime] 19/1/2016 11:49

Thanks for the posts Sky

[skyship] 19/1/2016 10:25

...& this from the leading Auction house competitor - ACUITUS:



The next report should be in early February.

[skyship] 19/1/2016 09:47

Interesting reading - suggests there should be plenty of buyers if Internos would only be more proactive with their selling campaign!

[tiltonboy] 04/1/2016 07:52

lol...

We had just moved to the shade when Morkel dropped Bairstow, and would have been on!

[badtime] 03/1/2016 22:15

Tilts I've not spotted u in the crowd yet ..they keep on zooming in on women in bikinis....so if you could ask Mrs Tilts .....:)

[tiltonboy] 03/1/2016 19:28

truly remarkable stuff. The heat is intense which makes even more remarkable. We have to keep moving into the shade, and my fair lady has been struggling.

I'm expecting some pretty significant inflows this year as LXB, JIGI,and JPEL return cash to shareholders. Additionally I believe the LSR price will finally reflect its NAV as further properties are sold.

Hopefully there will be some interesting re-investment opportunities along the way.

[skyship] 03/1/2016 15:08

Outstanding cricket from the Stokes/Bairstow duo. Hope you were there to see it Tilts.

I've made LSR my 2016 NAP over on the JDT thread:

[badtime] 03/1/2016 13:12

Tilts...warm enough for you?

[my retirement fund] 31/12/2015 11:53

This is the sort of investment you need to attend the AGM and speak to the board to get a idea of things - anyone been ?

[topvest] 31/12/2015 07:39

Hopefully we will get some material value creation here in 2016. Management have performed very poorly in my view. Surely in a strong property market they can sell properties yielding over 9%, even if they are tertiary in nature? Maybe they are waiting for the market to improve sufficiently to maximise stakeholder outcomes, but not sorting this out in 2016 would be risking the market heading back down again in my view. Time to get on with it please!!

[my retirement fund] 30/12/2015 18:04

Certainly seems to be a quiet buyer there.

[tiltonboy] 30/12/2015 15:42

Flew into Cape Town this morning. Never planned to do more than the three days!

[badtime] 30/12/2015 14:48

So howcome u didn't get to stay for the last day? I assume u are going to Cape Town for the 2nd test

[tiltonboy] 29/12/2015 18:08

Shame Bairstow fluffed the stumping!

Early flight to Cape Town in the morning.

[badtime] 29/12/2015 15:34

Nope I don't mind u saying :)Useful wicket by Finn just then

[tiltonboy] 29/12/2015 13:51

Odd decision to get out if you don't mind me saying!

[gfrae] 21/12/2015 14:30

I should have said "bought out",and as you imply it is only the net present value of future payments.
They can't repay the remaining swaps early,they are a condition of the loans,and anyway they only have another 6 months to run.
Internos take their commission from the capital returned to investors less recurring profit,thus there may be an incentive to keep recurring profit low.

[rohkap] 20/12/2015 20:12

Its not a write-off. Its a termination payment to close it out early. Termination was post year end so you will see it in the interims. Closing out the swaps early does not bring any economic benefits as the swap was valued at approximately that level in the year end accounts ie the termination payment equals expected net cash flows from now to expiration. It makes the company cleaner from the point of a potential portfolio sale which is a good thing and it also uses the cash on balance sheet earning zip. Hopefully they will do the right thing now and start paying down more debt early and close out remaining swaps early. They dont need to hold £12mm cash. Would have thought £5mm is more than sufficient.

[gfrae] 18/12/2015 14:45

NAV before interst rate swaps has gone down from 47p to 45p from memory the "movement in the fair value" is less than last year I think it was about 2.5m before.
I think the write off is separate,but has it been written off against the p+l ?
It would, of course, be to Internos's benefit to underestimate income and overestimate capital appreciation.

[skyship] 18/12/2015 14:19

Redhill - do you think the £1m swap costs write-off is part of the impairment shown as "Movement in the fair value of the interest rate swaps 1,728)"?

Or does it appear somewhere else I've missed?

Whatever, the more I read, the more I like the outlook; and I would expect an announcement on the marketing of a select portfolio early in the New Year.

Decided to join Tilts, so added another 20k @ 26.98p...

[gfrae] 18/12/2015 11:09

Pretty dismal,I would say. £20,000 profit on a relatively lowly geared high yield portfolio.
As others have said from next summer interest rates will go down to 3% odd down from 5.3%,so on £50 million odd of debt will save about 1 million a year.
This should make them much more saleable and increase eps.
Buying out the 2017 swap will also improve earnings.
So I would say NAV of about 45 (The remaining interest rate swaps will have expired by then )is achievable ie no change,plus eps of say another 3p by the end of 2017 for a total return of 48 p ? If they can sell the balance of the properties at NAV .
Less Internos's fees of course.

[tiltonboy] 18/12/2015 10:12

As mentioned in 1178.

[langland] 18/12/2015 10:04

All other things being equal............the interest saving is worth 2.8p per share.

[redhill9] 18/12/2015 09:42

The statement is full of detail.

Indeed it is.

While remaining cautious about LSR management's ability to deliver a full encashment within the timescales, and disappointed that the NAV hasn't progressed despite selling some properties at a premium, I am encouraged particularly by the section of loan financing.

Worth a read for anyone who hasn't already:

In April 2015 the facilities provided by HSBC were restructured, with the removal of the payment in kind (PIK) margin that had applied from January 2015. This considerably reduced the interest payable over the lifetime of the facility. In order to facilitate this change certain amendments were made to the loan to value ("LTV") and interest cover ratio ("ICR") covenants. Additionally a loan repayment of GBP6.9 million was made, immediately reducing the LTV ratio to 72.5% compared with the revised default LTV level of 82.5%.

Other changes to the facilities included the introduction of an LTV ratchet which unlocks lower interest margins and reduced amortisation requirements at lower levels of gearing. Amortisation instalments are paid on each interest payment date, currently calculated at 0.45% of the aggregate loan balance outstanding.

Additionally, the restructuring removed the obligation to hedge interest rate exposure, subject to continuing to satisfy the ICR covenant. In October 2015, this facilitated the termination of the interest rate swap which was due to expire in January 2017. Only cash trapped in accounts controlled by the lender, comprising sales proceeds of geared assets, was used for this purpose. This will reduce future interest payments, increase future ICR, and allow more cash to be released from the loan pool through higher operating cash flow.

The savings in interest payments (PIK and cash margins) from debt renegotiation and swap termination, are estimated at GBP2.3 million over the remainder of the loan period, compensating for the small reduction in covenant headroom, and the GBP1.0 million swap termination payment. The Group also holds a considerable amount of cash which could be deployed to repay debt in the unlikely event that a loan covenant is at risk of being breached. Furthermore, the revised debt terms and the optionality provided by the LTV ratchet improves the attractiveness of the portfolio to potential purchasers.

Immediately following the refinance and swap termination, the average cost of debt, including margin was 5.3%. Were the restructuring of the HSBC facilities not undertaken, the cost of debt would have risen to 7.2% immediately and higher thereafter as the PIK interest ratchet increased. The two remaining interest rate swaps expire in July 2016 following which all debt will attract interest of 3 month LIBOR plus a margin of between 1.75-2.0% dependent on the prevailing LTV. Current LIBOR forecasts suggest the cost of debt will fall below 3.0% at this time.