Secure Income Reit Share Discussion Threads

[bondholder] 17/7/2020 09:59

Invesco UK fund outflows widen to £4bn as performance woes prompt investor exodusGood bye.

[adae] 13/7/2020 11:00

Not sure how much faith to place in NAV - will be the usual "material uncertainty" clause.

Good to see Alton Towers back open , and hopefully the Travelodge IVA will be the end (for the time being) of the trouble there.

If they're expecting a bumper 2021 (2nd wave anyone?) then I agree they'll likely pay the divi out of capital.

Directors bought in big at around 250p, is heading back there.

[belgraviaboy] 10/7/2020 12:52

Just been working through the numbers to try and work out what the dividend situation will be.

As far as I can tell, given the various deferrals and write offs, pretty much all the rent recieved in 2020 will be taken up by finance and admin costs.

That is not to say SIR will not pay something out of capital. Given the management are waiting the Travelodge CVA not to be challenged to announce the dividend suggests they are going to pay something - as they can't pay a dividend lower than nothing.

If things go to plan, 2021 would be a bumper year for rental payments as the (Merlin?) deferral is repaid.

Perhaps more interesting is where the NAV is going to settle. The very historic NAV of 430p will fall, but at 256p, there is a significant margin of safety.

[belgraviaboy] 09/7/2020 13:26

I would not be surprised to see SIR actually buy more Travelodge sites over the coming months...

There are going to be some distressed sellers out there

[bondholder] 24/6/2020 14:15

Absolutely agree. Patience will be rewarded.

[nickrl] 24/6/2020 14:14

SIR first out with June rental qtrly update probably helped by TL issue being resolved but at least very transparent.

In summary they've collected 100% of what they've billed BUT thats because they've agreed £8.9m deferral for June and same for September before this rent is restored in Dec 20. Also saying the deferred rent will be paid back in Sep 21 so pretty good position.

Update on divis will be made on 23/7 if TL CVA scheme is approved on 19/7.

[smidge21] 24/6/2020 07:43

Strong buy issued yesterday with a 60% upside target (444p). Fully let, 21 year average term. 40:60 fixed inflation linked rent mix. Travelodge discounted and not likely to establish precedent. Fwd EPS yield of 6.2% (end 2021) the current fwd NAV discount (28%) is excessive. PT based on 3.9% 2022 EPS yield. Re-opening will unlock value

[bondholder] 23/6/2020 15:08

Adae that sounds entirely reasonable.

[adae] 23/6/2020 06:57

Be interesting to see, but if they didn't cut it before (on the uncertainty), not sure they'll cut it now, when they know the shortfall is temporary.

[bondholder] 22/6/2020 15:50

SIR have around 230m in cash at bank so 28m over 2yr shortfall from TL not fatal to paying full dividend. Merlin have raised 500m bond so plenty of cash for next 18months at least.

[nickrl] 22/6/2020 13:15

With the level of income forgone on TL can't see how they can maintain the dividend unless they are going to tap into spare cash. Merlin must hurting as well so dividend probably should be cut to 50% however as they have a lot of skin in the game they may think differrently.

[adae] 22/6/2020 07:33

Hoping they maintain it, now there's some clarity over Travelodge. This is what they said last time:


"The board will continue to keep dividend payments under review, recognising the importance of maintaining a balance between retaining funds for opportunities should they arise, appropriate cash reserves given the uncertain duration of the pandemic and the desire of the company's investors to preserve their dividend income."

[redponza] 22/6/2020 01:08

Dear all,
SIR has not announced any dividend cut yet, right?
With the dust settling on travelodge, what do you think the rate of cut will be if there is any?

[adae] 20/6/2020 07:00

@nickr - that it is, but makes me think Leslau has some alternative tenants (Premier Inn or the "NewTravelodge") lined up already, and you can bet it'll be near the previous rent and not the new one.

Provided no court challenge to the CVA, we now know the worst-case, and the potential upside (the profit share). But we still have some possibly decent newslfow ahead near term, as they work on stripping Travelodge of leases and putting in paying tenants.

In fairness, if it wasn't time-bound, SIR would just be losing more rent - a new tenant wouldn't have to make up the missed rent, so the shorter that period, the better.

Directors bought in size at what, 250p I think? I reckon they'll do well.

[nickrl] 19/6/2020 19:51

Adae, indeed and good see that Leslau looked beyond the immediate threat and worked that option into the CVA although it looks like its time bound to initiate from my reading.

[adae] 19/6/2020 15:16

This is & has always been the key for me:

"The Company and its advisers are in preliminary discussions with alternative hotel operators with a view to establishing the best options for maximising shareholder value. There is a variety of different lease and partnership models employed by investors and hotel operators and the Company is assessing the potential for any of these to add incremental value over and above the existing lease arrangement with Travelodge."

[bondholder] 16/6/2020 21:18

Glad that there seems to be an agreement in prospect. Any other outcome likely to be destructive for all. Budget hotels likely to outperform most other types of accomodation in a recessionary environment.

[nickrl] 16/6/2020 20:30

Adae/Bondholder, there's no happy endings in the current environment but good they've squeezed a bit more out of this and with an escape hatch of break clauses don't believe anything better on off.

You never know TL with its simple offering and minimal communal areas may do well out of staycations.

[adae] 16/6/2020 18:35

Excellent news, thanks for sharing that Bondholder.

" - proposing to increase the share of profits that would be handed to landlords above a £200m threshold
- pledging that shareholders would not be able to take money out of the company until landlords had been fully repaid
- making it easier for property-owners to exercise break clauses in their contracts with Travelodge
The vote on Travelodge's Company Voluntary Arrangement (CVA) is due to take place on Friday.

Crucially, Secure Income REIT, the vehicle headed by the property entrepreneur Nick Leslau, is expected to vote in favour of the revised proposals.

Secure Income, which is Travelodge's biggest landlord with 123 hotels, had been agitating for an improved deal."


Particularly like the break clause proviso - is high time Travelodge were ditched from as many sites as possible.

Could all have been managed so much better.

[bondholder] 16/6/2020 17:07

https://news.sky.com/story/coronavirus-travelodge-sweetens-landlord-deal-to-seal-crunch-vote-12007930

[bondholder] 15/6/2020 15:35

The thing about the current TL offer is that once you blow away the fairy dust they are only putting up £10m in new money and retaining 100%equity. The landlords on the other hand have to permanently forego 144m of rent. If TL decide they need more cash in two years they can do another CVA and no account is taken the rent foregone now. TL talk about liquidation as an alternative. How much will they recover of the 440m senior creditor notes in that scenario ? The answer is not very much after the banks have taken the first 100m. Not realistic. If 10m is the most they want to put in then something else needs to be on offer.

[nickrl] 15/6/2020 13:39

Not sure administration will really help in current environment unless your convinced there will be a quick bounce back or a staycation boon?.

At least TL are offering part of the cake if it comes good over next 18mths so better to push for improved terms on the CVA i would have thought.

[bondholder] 15/6/2020 13:15

https://www.hotelowner.co.uk/24900-travelodge-landlords-could-reject-cva/

[adae] 15/6/2020 06:29

Thanks @Bondholder. Is good the Landlords' Group can basically call the shots, tho what a Travelodge bust-out would look like, I don't know.

[bondholder] 14/6/2020 16:27

Travelodge Landlords' Group Seeks Detailed Information on PlanJune 14, 2020, 9:25 AM The Travelodge Owners Action Group, a coalition of Travelodge landlords representing more than 400 hotels, called for more information on a proposal to restructure the company.The group is seeking "detailed clarification" on some of the terms of Travelodge's current proposal before a June 17 deadline for an initial vote, according to an emailed statement from Viv Watts, who co-ordinates the group.The landlords are calling for "greater transparency" as the voting deadline approaches and "urgently requesting detailed clarification on the options promised to landlords" in Travelodge's proposal. "Without added clarification, landlords have the strength in numbers to oppose" the proposal, according to today's statement.The online creditors' meeting is scheduled for June 19, with an announcement on whether the so-called CVA proposal has passed as expected on the same day, according to the action group statement. CVAs are a type of U.K. insolvency process that allows firms to cut rent without affecting financial debt if at least 75% of creditors and property owners agree.BusinessFlorida Cases Rise 2.7%; Beijing Locks Down Areas: Virus UpdateJune 14, 2020, 11:59 AM EDTDo not sell my information (California) Privacy Policy