The Local Shopping Reit Share Discussion Threads

[tiltonboy] 15/11/2018 15:18

Allsop - Lot 116 - Bolton - Sold prior

[hillofwad] 15/11/2018 11:26

Fraz True good Point I guess when bought it could have aspired to £1.5m but looks definitely like a potential 20%+hit arriving from £1.35m

What is evident that far from saving the best til last it looks as if the remainers were those properties they hoped they could add value by renewing and restructuring leases etc

[frazboy] 15/11/2018 09:59

Scburbs - thanks for pointing out that the maximum valuation of the Hastings property can't be more than £1.35m - HoW take note! Which is not to say that I'm expecting massively over guide

[frazboy] 15/11/2018 09:24

Tilton,

Lots 51, 53 & 79

Guide: 660k

Occupancy not so good here. And lots 51 & 79 are ~50% ASTs.

But I guess the good news is that the 7 others are probably being negotiated by private treaty, and thus far, private treaty sale prices have been closer to valuation. so if my maths is correct, and subject to 9 in Allsop, 3 in Acuitus, we have 15 (7+8) in total, which are probably being sold by private treaty?

[frazboy] 14/11/2018 16:48

i wonder if they've sold the others... i'll have a look later

[tiltonboy] 14/11/2018 16:44

Only three properties in Acuitus as far as I can see.

[hillofwad] 14/11/2018 15:42

Skyship

Be very surprised if they get that

Scburbs

It looks like they were waiting to see if they could swing Argos on this one before hitting the market .Clearly that has failed .I guess they would have accepted £45k pa if they had hooked up for a long 'un

The problem is they have had oodles of time to sort the lease out so investors are going to factor in a hefty vacancy

Maybe they have given The Italian Way a capital incentive to sign up for an extended lease.That would be a logical explanation .I don't think investors will be fooled by that one

[scburbs] 14/11/2018 15:10

Interesting property. Argos is a big red flag, but they have actually made progress with this property. In the last few weeks they have persuaded the Italian Way (whose lease didn't run out until end of 2020 so 2 years to run) to sign a new lease at a 6.7% increase to 2035 which suggests potentially not over-rented and implies current trading at the restaurant unit must solid.

Property also looks to be in a good location (at least good within Hastings).

The Argos unit is massive, but the other rents don't suggest the rent is too high.

Unfortunately they will probably get a far too low offer for this property because of the Argos unit, but someone could probably do very well out of it. If Argos stay great (albeit they have clearly refused to sign a new lease), if not a purchaser could split into 3 units and relet. The fact that Italian Way plus 3 others have signed lease in the last couple of years or so show it should be doable.

As at 31 March they only had two properties with a book value over £1m. These had a book value of £2.35m collectively.

[skyship] 14/11/2018 13:50

Overly pessimistic - I would guess c£1.25m

[hillofwad] 14/11/2018 11:50

hxxp://www.auction.co.uk/commercial/LotDetails.asp?A=1058&MP=24&ID=1058000104&S=L&O=A

So they were saving the best to last ! This has overtones of Airdrie Leasehold with upward only reviews. A big chunk This could end up anywhere Argos holding over @£63k pa Why haven't they taken a fresh lease ?

The market will only think the worse

This could conceivably be sitting in their books at £1.5m

This one definitely worthy of a sweep

I am going for £930k

[strathroyal] 12/11/2018 09:42

frazboy - no. It seemed to me that the smaller properties were holding up well, probably because the tenant was often prepared to buy at or around valuation.

Disappointingly the medium price properties (200k+) seemed to have become an issue and I put that down to the fact that once it became clear LSR were the sellers, these properties struggled to get to the reserve and seldom exceeded it, making a loss inevitable. The larger properties have consistently struggled.

So while 33p still seems on the cards, the margins are not enough to warrant reinvestment. I don't know if the sales could have been handled better as commercial property is not my area of expertise but I was disappointed that, once a first and successful online action had taken place, these were not carried out on a more regular basis.

[frazboy] 11/11/2018 19:50

Agreed tilton, it was a bit speculate, and having thought about it a bit more I would expect guide to be around £2m, perhaps a bit more, for the acuitus propertties. There is a large degree of uncertainty here for the reasons you outline. If you really wanted to make a better guess you could go back and calculate the average guide of every property in both auctions and use that to calculate a better guess (assuming previous prices were a reliable indicator...) which also begs the question why do certain properties end up with Acuitus and some with Allsop? Judging by the last auction results achieving guide is around 15% below valuation (?) and infers around the 33p level for return.

One other more pertinent point, the properties at the Allsop auction have nearly all been occupied, so operating incone will remain higher than I might have expected until the wind up.

[tiltonboy] 11/11/2018 19:17

fraz,

Haven't got a scoobie how I got to that figure...lol...

We do not know the value of the 10 remaining properties, as we do not know what price has been agreed on the package of 8 properties, and we do not know the book cost of the 9 in Allsop.

[frazboy] 11/11/2018 18:49

Thanks gents

I only get a guide of £4.19m tho. Interesting to note that ~50% of 112, 126 and 130 are made up of ASTs. Might help the prices hold up a little better?

And that leaves ~10 properties to be seen in the Acuitus catalogue with a total valuation of around, or perhaps a bit less than, £3m, to sell..?

Strath, did you buy back in?

[frazboy] 11/11/2018 18:49

Thanks gents

I only get a guide of £4.19m tho. Interesting to note that ~50% of 112, 126 and 130 are made up of ASTs. Might help th prices hold up a little better?

And that leaves ~9 properties to be seen in the Acuitus catalogue with a total valuation of around, or perhaps a bit less than, £3m, to sell..?

Strath, did you buy back in?

[tiltonboy] 11/11/2018 17:50

Thanks strath - edited

[strathroyal] 11/11/2018 14:36

Hi Tilts, I've got just 2 more, 131 (on LSR gallery as Hulme)and 141 (not sure why this is advertised as Office).

[frazboy] 10/11/2018 22:16

More like £3.8m?

[tiltonboy] 10/11/2018 19:28

Edited thanks to strath

Allsop lots on 4th December:

Lots 104, 112, 116, 126, 130, 131, 132, 138, 141

Total guide 4.19m

[hindsight] 01/11/2018 15:01

One minor concern for me was that remark by Duncan (in the Thalassa HY update?) as regards not allowing the distribution of cash without his approval. And his recent behaviour with the issuance of the preference shares at Thalassa, for what reason? I don’t see that it is in his interest to block the distribution but the boy is a bit of a maverick.

Does he know of some businesses that would consider a reverse into a cash shell. Unfortunatly not the time for it at present but in 6 months who knows

[frazboy] 01/11/2018 14:48

good for you Tilton, added a few yesterday at 30.4

[tiltonboy] 01/11/2018 14:41

I'm picking stock up at 30p

[frazboy] 01/11/2018 14:28

they will also make an operating loss in the period 01/04/2018 until cessation of operations. they did make a profit in the previous half, but only just, and they did also say that, many of the operating expenses (incurred in that period) related to preparation of properties coming up for sale, so the question is how big will that loss be?

however, it's difficult to see a return of less than 32p, and, there are only 3 to 4 months to go...

[gbjbaanb] 01/11/2018 14:12

So is that:

£3.2 (recent 15 properties) + £16.4m (cash) + £8 (£9.9 * 20% discount) = £27.6m

at 82.51m shares gives 33.45p per share. Current share offer price is 30.6p so I'm unsure why I shouldn't fill my boots and wait until early 2019.

Sure, the sales proceeds of the remaining might be a lot worse than a 20% discount and the winding up costs might be large, but unless they come to £4.5m, there'd still be profit in buying them now.