The Local Shopping Reit Share Discussion Threads

[frazboy] 05/4/2018 11:16

strath/tilts

I would like to think that the reason is that something is going on in the background, but i fear the more likely reason is that it's the holiday period, and folk aren't at their desks! If nothing pops up by early next week i'll plump for the former.

[strathroyal] 05/4/2018 10:40

fraz / ttb,

I thought the timing of the previous announcement was somewhat unusual as in effect they were only announcing the sale of 4 properties with the auction properties having already been advised and the private treaty/portfolio sales not yet sstc. Wondered at the time (and still wondering) whether they had a buyer lined up for the remainder.

[tiltonboy] 05/4/2018 10:05

fraz,

I concur

[frazboy] 05/4/2018 08:54

Surprised not to have had an update as of yet, given the pattern of recent announcements and the auction results. I would hope they’re waiting for confirmation of the price for the portfolio sale. And we should hopefully get a bit of forward visibility on any new PP sales and auction plans.

[skyship] 29/3/2018 07:35

Agreed, look forward to another Update. Yes, the ACUITUS site was down - kept getting ERROR/FAULT whenever I tried to access...

[tiltonboy] 29/3/2018 00:41

Only just seen the auction result as the Acuitus site seemed to have been down, and there was no comment on here.

I had hoped for close to 600k, so a result of 598k seems ok.

More money in the bank.

I think we should see a further update after the weekend, and it would be a bonus to hear of further PT sales as well.

[frazboy] 28/3/2018 10:04

Thanks Tilton, much obliged.

[tiltonboy] 28/3/2018 09:42

fraz,

There are properties that have previously not sold at auction, and there will be others that the advisors will recognise will be hard to shift. I'm hoping this rump will only amount to a few million in total, and a larger haircut on those won't make a material difference.

I had a pretty good idea what was left in the portfolio, but following the Private Treaty sales, I have lost track.

[frazboy] 28/3/2018 09:22

Tilton,

"Agreed that they may need to take a big haircut on a few"

What makes you say that? I ask because I would have thought it difficult - due to the various private treaty sales and the small portfolio sales etc - to be sure of what properties the company still has? Do you have some specific properties in mind? (Were, the properties in Wolverhampton examples of such?)

[tiltonboy] 28/3/2018 09:19

With an early flight from Wellington to Christchurch, I won't be getting up for the Acuitus auction. Lot 49 has been withdrawn, so only 3 to follow. Hoping for close to 600k for those.

[tiltonboy] 27/3/2018 20:58

You have been very consistent in your assertion that a discount would be needed to clear out a portfolio, and have variously quoted 15-30%.

I was alluding to the roadmap announcement of a rump portfolio of 200 properties, with a value of £55m. Given that the portfolio is now sub 100 properties, and £30m, it looks like the managers have not had to take the level of discounts of that quantum. Agreed that they may need to take a big haircut on a few, and agreed that there have been no jewels found, but we still continue to receive decent prices on recent sales, and that comforts me that 36p is achievable.

[hillofwad] 27/3/2018 12:25

Tilts

Well this is what you said in your last post

"It is pretty evident that the large portfolio sale they alluded to is no longer going to happen, because they have already sold parts of it piecemeal."

You seem to have confused my post as referring to the marketing of the mega portfolio-I guess??? where I was referring to the"significant portfoilo" highlighted in their recent RNS which unless you know different is happening

All I originally said was its likely that a sale of a "group" of properties. more than a few ,portfolio medium ,big or mega is likely to attract a discount!!!

[tiltonboy] 27/3/2018 09:53

I no longer have a clue what you are talking about!

[hillofwad] 27/3/2018 09:45

Tilts -You seem to twist my words Why do you think this has fallen through?

This was the announcement on the 14th March .


"
The Company is also progressing a number of private treaty sales and has agreed terms, subject to contract, on 29 properties (total book value £11.3 million), including one SIGNIFICANT PORTFOLIO SALE . A further 20 lots (16 properties) are scheduled for auction during March. "

[stemis] 26/3/2018 20:17

It is the concern though. If these assets are saleable at little discount to NBV, then what are LSR waiting for?

[tiltonboy] 26/3/2018 19:45

hills,

You play with words!

It is pretty evident that the large portfolio sale they alluded to is no longer going to happen, because they have already sold parts of it piecemeal.

The big haircut we going to have to take, is on a decreasing number of assets, which will number less than 100 following the current round of auctions.

Sure there will be some “sediment̶1; but it may be thinner than your earlier comments.

[hindsight] 26/3/2018 13:51

Hillowad, may I ask what your estimate is of us shareholders final return at the end of the day. Personally hoping for 36p

[frazboy] 26/3/2018 13:48

Hillowad - a couple of other remarks

This is from the November press release:

"Since the last update on the sales programme, the Company has completed sales, or exchanged at auction, on a further 22 properties for an aggregate sale price of £2.6 million, representing a 3.7% discount to carrying value before sales costs. Many of these assets were fully or partly vacant (32% by area, in aggregate)."

It would appear that the lease length isn't as critical as you keep implying, in achieving good valuations. Admittedly, these properties were at the cheaper end of the scale.

And the final point, what surprised me at the last auction was that the two properties which had Games Workshops (a pretty robust company at the current time) as tenants (with longish leases if i remember correctly), were two that struggled to to sell. This is rather odd, and goes against intuition, but if you could explain why that would be, I would be all ears - I fully appreciate there may be nuances here that I'm not aware of!

[frazboy] 26/3/2018 13:35

hillowad

I think folk think you're being unduly pessimistic. The latest auction indicates healthy demand for property which is not on out of town retail parks - the read across that you're implying is yet to pan out. We only have ~100 left to sell once this Thursday's auctions have passed (we may even have less than that, as I may have misunderstood the company's statements). Do bear in mind, that over the last few weeks the company has informed us of 69 property sales (if you include the 4 at auction this Thursday - which I'm more than happy to do).


The only material unknowns are what we'll get from those final sales, and, what the aggregate price was for the lump of properties sold with the book value of ~£11m. Even assuming say, a 7.5% discount (prior to sales costs), a 36/37p return looks eminently achievable, even with a decent discount on those final properties.


Out of interest, did you every dip your toe in?

[hillofwad] 26/3/2018 13:15

Lots of defensive reaction to a fairly basic comment that a portfolio sale is likely to have quite a large discount all things being equal


Well if the portfolio is now history I am surprised they haven't announced it as its a significant sale. These sales can be long drawn out affairs especially if there is finance raising by the buyer.


My comment on Corals.Banks(or similar) etc was purely highlighting that the value of some of the shops is to some extent determined to some extent by the quality of covenants and lengths of lease

The names were just examples All the current turmoil in the sector will increase investors concerns with leases getting shorter

The last reval. was in September another 6 months off the clock on the leases

[skyship] 26/3/2018 08:21

HoW - you were referring to BIG stores, not BIG covenants.

[tiltonboy] 26/3/2018 08:16

Where are the bank assets?

How many Corals have we got left?

Looks like a large portfolio sale is now history, but continue to sell individual or smaller portfolios.

From what I've seen, there have also been numerous lease renewals which you always fail to mention.

[hillofwad] 26/3/2018 07:57

Tilts

Not in dispute they have done pretty well at auction with modest haircuts overall The point I was making to Skyship is that LSR has a mixed portfolio including "BIG" covenants like Corals

As you say they have recently sold well

However its likely that with a portfolio sale this will attract a hefty discount which is more than likely to be 10%+ .Some of the properties since last valuation will have eroded due to ends of leases closing in

We will soon find out

[tiltonboy] 26/3/2018 00:17

Of course there will be a discount, but as each set of sales continue to go through at or relatively close to NAV, the final result becomes a little easier to ascertain. We are not looking for 42p, but 36p looks achievable. If another 25 assets were to go at sub 10% discount, then my confidence would be re-inforced. The company is now ungeared, and looking at the auction results looks relatively untroubled by High Street woes. Having a near 10% yield gives some comfortable.


I wasn't aware that we had any banks, and as for Coral's we achieved some stunning results.