The Local Shopping Reit Share Discussion Threads

[gfrae] 13/12/2017 18:20

And of course,there is the £5m of rental income to consider,less interest to pay and lower fees to internos. And incidentally HOW they only have 1 employee to make redundant.

[skyship] 13/12/2017 18:02

frazboy - "So, 35p is pessimistic, and potential 37 to 38p is still possible. These are a buy if they drift below 31p again."

Exactly how I see it!

tilts - you interpret my post perfectly. I've re-read it; and still think it makes perfect sense...

Anyway, no point for rows here - we'll see how things pan out in the New Year.

[frazboy] 13/12/2017 17:46

I'll join the chorus on this one...

HoW - although my numbers are not precise (I don't watch this avidly), I reckon that we'll achieve 95p in the £ for the 125 properties remaining this year (i've guestimated we've sold about 15 so far this year). Then, I'm assuming the company will bulk sell the remaining 40 or so properties at 85p in the £ to which I've added wrap up costs of £1m (I'm assuming that we break even, at the operating level, in the current financial year). On that basis we'll end up with perhaps a bit more than 36p a share. So, 35p is pessimistic, and potential 37 to 38p is still possible.

These are a buy if they drift below 31p again.

[tiltonboy] 13/12/2017 16:43

hillofwad,

Stop being so arrogant. The one thing that has been consistent so far is your misplaced negativity.

SKYSHIP seemed to be making a point that the properties were marketed as a portfolio, and not individually, so trying to draw a conclusion from that is pointless.

Agreed, that it is well known about LSR being a seller, but thus far even some of the dross has shifted at respectable prices.

I just do not understand why you believe that a large discount will be needed to shift properties, when there is evidence that those marketed so far have generally sold well.

Unless Allsop's have badly overvalued the individual properties (no real evidence so far) then hopefully they will continue to shift on a +5 to -10 (including costs) range.

167 properties to go, and I will continue to monitor with interest.

[redhill9] 13/12/2017 16:41

Hiilofwad, your concluding two paragrahs:

The investors I have spoken to who normally buy this product think they are a tad too expensive I have been informed by a couple of agents this includes the former Directors who as you are aware have a new company which buys similar stock

Surely you dont think they would have not hoovered up any bargains!
Nothing wrong with whats left but if you think its all going to leave the premises with just a whisper of a discount you are going to be disappointed.

Surely if you were correct in this statement LSR wouldn't have managed to sell a good number of their lower-end properties at acceptable comparisons to NAV as they appear to have done?

While a negative viewpoint is worth considering, yours seems less than realistic considering recent experience?

[hillofwad] 13/12/2017 16:40

So yes there will be a chance of individual properties achieving premium prices - but the majority looks as if they need to be discounted More than likely the quality properties have been valued accordingly and same rules apply

[hillofwad] 13/12/2017 16:24

"Whilst a portfolio sale is our preferred route for disposal of these assets, the indicative offers that have been received have fallen substantially short of the proceeds that the Board believes can be achieved through sale by auction or in smaller concentrated private treaty disposals. "

Skyship which bit of this RNS didn't you understand

[hillofwad] 13/12/2017 16:18

Skyship

As advised Allsop have formally offered a portfolio recently to the market and unfortunately there has not been a buyer who has stepped up to the plate with a high enough offer Fact Dont take my word for it speak to a any West End investment agent Its done the rounds

Your schedule of deductions is way too optimistic

The market has been made fully aware that LSR are winding down so all the wheelers and dealer have cast their eyes over it Whether Allsops have been marketing formally is largely irrelevant

The investors I have spoken to who normally buy this product think they are a tad too expensive I have been informed by a couple of agents this includes the former Directors who as you are aware have a new company which buys similar stock

Surely you dont think they would have not hoovered up any bargains!
Nothing wrong with whats left but if you think its all going to leave the premises with just a whisper of a discount you are going to be disappointed

[skyship] 13/12/2017 13:34

HoW - sorry, you always post as though you have an inside track here; but I suspect that may not be the case .... and that you are wrong.

Why?

Because it is a fact, oft stated during the sale of the 1st half of the portfolio 3 years ago, that LSR does not want to sell all the easy upside properties as that would diminish the chances of a group sale. They have to keep back many of the pearls; and the strategy then revealed and successfully acted upon was to sell from the bottom....NOT from the top.

So - Allsops have not been punting individual properties. They may have been the appointed party looking for a bulk sale - I know not. But for that so far no takers....not yet at any rate.

So, LSR return to the policy of individual property sales; for the time-being at any rate. I suspect we will see next year many of the properties being sold at, or at a premium, to NAV.

[hillofwad] 13/12/2017 12:31

Skyship

I think you have missed the elephant in the room Allsops have been punting the portfolio high,wide and handsome There are buyers but only with big discounts

The market is aware that each and every property is available and if any offers for these were for book or above they would have long since vanished

[tiltonboy] 13/12/2017 12:02

Hopefully we will see Private Treaty sales accelerate as well.

[skyship] 13/12/2017 10:23

The Statement suggests that a large portfolio sale of the remaining stock is not currently on the cards; however values are holding up well, LTV well down and borrowing expected to be cleared by mid'18.

The best of the statement is the inference that the portfolio is now of a far better quality than those sold in 2017 - average lot size now at c£320k v. the average of the 157 sales in 2017 at just £135k.

It was a deliberate policy to clear out the dross; and in 2017 they did that...and some. Sales were ahead of target.

So, with liquidation next year, one has to assess the share price of 31.5p versus what upside?

Well, take the current NAV at 42p.

# subtract 2p for sale discounts
# subtract 1p for sale costs
# subtract 1p for admin/liqdn costs
# subtract 1p for contingencies

PAYOUT - c37p....though possibly with a little annual income upside.

I believe that possibly to be too conservative; but the upside of c17% in 12months is certainly sufficient to make me HOLD; and possibly ADD upon any intra-day weakness.

The commercial auctions start up again in February so there will be constant news of disposals from the auction sales; and perhaps occasional news of private treaty sales. This drip, drip, drip of better news will gradually reduce the NAV discount.

One to add to your monitor if you don't already hold...

[hillofwad] 12/12/2017 13:49

Frazboy/Gfrae

Yes the BODS now seem to be doing all the right things . Cutting Inernos fee and maybe a few more private treaty sales at say prices up to 15% below book to get them away

The problem lies when they reach a point where the property numbers don't justify keeping the company going so they are probably going to have to kick out the final portfolio with a substantial discount and there will be other decomissioning costs too ,staff etc

The question is what are Thalassa going to do with their current investment -seems the only chance of making a show is if they take the company out

Maybe an offer will be arriving shortly and maybe 35p is enough for everybody to say goodbye Why would anyone want to pay more?

[gfrae] 12/12/2017 13:33

Isn't 35p very pessimistic ? During the course of the last financial year they have sold the bulk of their smaller geographically difficult shops,and despite the relatively high costs of these sales, NAV has only fallen from 43p to 42p.
They still have £5m of rental income,obviously diminishing and the remaining properties should be easier to sell, even if they cant be offloaded in one go.

[frazboy] 12/12/2017 13:13

I was happy with the numbers and the reduction in the base fee to INTERNOS, the only real blemish was plan B as opposed to plan A. I was trying to reconcile the results with the timings in the roadmap published last year - my take is we're 3 to 6 months ahead of schedule (albeit not the preferred schedule), and thus liquidation should occur in mid 2018 (the calendar year 2018). At 35p distribution that's only a 8% CAGR (assuming payout end June) - not bad, happy to stay the course, but I would hope for a bit more

[hillofwad] 12/12/2017 08:32

SKYSHIP


I wouldn't assume that just because the remaining properties are better quality that they are likely to achieve prices with lesser discounts to BV..


Its clear from Alsop's recent marketing that the only way they can get shifted en masse is with a generous discount .This has prompted the BODS to set to on the disposals by all means possible .

Some of the remaining properties are going to be those acquired by sale and leasebacks where the value is embedded in the quality of the tenant and length of lease As tempus fugit and the lease expiry date hoves in to view value diminishing

[hillofwad] 12/12/2017 07:47

Good news with the decision bringing it all to an end quickly .The market can easily absorb that amount of property and lease ends are getting shorter diminishing values

Maybe this will be the necessary encouragement now given to Thalassa to step up to the plate .Its looking increasingly like Grahame Whateley was always going to come out with the better part of the deal . Look like 35p all wrapped Up

[skyship] 12/12/2017 07:26

So, sounds as though a large portfolio sale not currently on the cards; however values holding up well, LTV well down and borrowing expected to be cleared by mid'18. Best of the statement may be the inference that the portfolio is now of a far better quality than those sold in 2017 - average lot size now at c£320k v. the average of the 157 sales in 2017 at just £135k.

[strathroyal] 11/12/2017 16:59

Skyship - Guide price was £140k, so I don't think the four sales would have been far off NAV.

[skyship] 11/12/2017 15:30

Lot 50 at the Acuitus auction was sold for £150k. Don't know what the guide price was; but the sale price yield was a very high 11.8%.

[hillofwad] 08/12/2017 15:51

Yes nothing wrong with Rowley Regis

[tiltonboy] 08/12/2017 15:28

Results Tuesday

[langland] 08/12/2017 10:30

Final results due next week.

[skyship] 08/12/2017 10:05

Don't recall the asking price for Lot 153 - c£60k I think.

So, the Allsops sale seems to have delivered a reasonable result c£440k net v. an anticipated c£370k net; thanks to that very good result in the W.Midlands.

Hope we've got many more like that in the portfolio...

[gfrae] 08/12/2017 09:16

153 sold after.