Supermarket Income Reit Share Discussion Threads

[jonwig] 19/4/2023 17:42

scruff, chucko - I have more than pity, I have up-voted!

On EPC responsibility, it appears that the landlord must provide one for a new tenant:

An EPC informs the tenant about the energy performance of a property. It is a legal requirement for the landlord to provide a commercial EPC prior to your property being marketed. A copy of an EPC must be made available to prospective tenants at all times. A commercial EPC is valid for ten years from the date of issue.

It also appears that the landlord is responsible for paying for the cert and delivering it.

Also I read: "from April 1 2023, both new and existing commercial lettings must have an EPC rating of E or above."

I got all that (and there's more) from a google search. What isn't clear is whether the tenant pays extra for any upgrading required.

[chucko1] 19/4/2023 17:22

Scruff1, can I say what a welcome addition you are to this board in any case. I recall from the LLOY board that you are in permanent danger of matrimonial bruises.

Jonwig, have pity.

[scruff1] 19/4/2023 16:50

JON
Not sure what happened there (I should have checked it) and should have been - not just sheds. I realise how important it is to to write correctly but if I was to comment on all spelling mistakes and grammatical errors the wife would wallop me for being pedantic. Sorry too for being off topic after all time is short and there is so much to say about SUPR. Sorry Sir

[mindthestash] 19/4/2023 15:33

Thanks Jonwig. I'll certainly have a look at atratos model. I try and stay away from regulatory driven investment but there's no stopping the renewable juggernaut

Most leases I had dealings with back in the day tried to place regulatory compliance on the tenant for their use. Anyone know if the EPC requirement from new primary legislation allows the tenants here to dodge this bullet and hand the hospital pass to the landlord, cos that's how the press comments come across ie "you will be unable to let premises below EPC level B etc...

[jonwig] 19/4/2023 15:00

mindthestash - this isn't a new problem, and solutions are at hand.

For example, fitting your shed roof with solar panels can work wonders for your EPC:



(So how about Atrato's ROOF, which does just that?! Luck, or foresight?)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

scruff - you're off-topic. (And old fogies like me can't read text which isn't formatted and paragraphed properly.)

[scruff1] 19/4/2023 13:38

mind
Its what do you guys thinkjust sheds. Its anyone with an older property which they currently rent and had planned it for retirement income (and anyone who wants to rent - already the signs are that landlords are selling and rent rapidly rising as has happened elsewhere. Its also people with older houses. If you have a mortgage you could be in trouble or if were hoping to downsize that could be scuppered. As usual politicians have neglected to think through the consequences of 'hey Ive got a really good plan lets do this quick before the election' and given due diligence both barrels. They remind me of a drunk staggering through a garden of cloches

[williamcooper104] 19/4/2023 09:06

Yep that's woeful too The French have done a far better job

[jonwig] 19/4/2023 09:05

chucko - I don't think any country in Europe can raise a flag saying their policy is the best.

Germany is in the process of building a nationwide hydrogen grid (and attracting investment out of the UK). Their strategy appears to be that EVs are unsuitable for heavy road haulage (weight is the factor), and Mercedes is concenttrating on hydrogen trucks.

Somehow, Germany is managing to build gas storage at speed, whilst we're just Rough Cavemen here.

[mindthestash] 19/4/2023 08:59

hows this for an energy policy

Research from international real estate advisor Savills has revealed that a total of 185 million sq ft of all UK retail space is at risk of becoming unlettable by next year, if the Minimum Energy Efficiency Standards (MEES) are not met.

The figure follows ambitious targets set by the Government which will prohibit commercial buildings with an EPC (Energy Performance Certificate) rating of Grade F or G being let from next year (1 April 2023), with a longer term target for all commercial buildings to be rated a minimum of Grade B by 2030.

Has anyone any idea how these giants sheds with 200+ freezers are going to meet Grade B?

[chucko1] 19/4/2023 08:42

WC, if you thing policy is bad here, try Germany.

[scruff1] 19/4/2023 08:34

A bit of climate change may make it shorter too. Easier growing veg in the warmth and fortunately May June July and August should see a bit of global warming. A failed energy policy by successive govts has to shoulder a lot of the blame - as indeed quite a number of other failed policies.

[scruff1] 19/4/2023 08:27

I dont deny it but I dont know about you guys but I dont see 19% food inflation. It certainly isnt in Tesco for most basics

[spectoacc] 19/4/2023 08:15

Food just isn't coming down, and climate change may make it a longer term problem.

OPEC also seem determined to keep oil up.

But inflation will come down in time, it has to.

ZIRP is over tho. Someone needs to let the IMF know.

[williamcooper104] 19/4/2023 08:07

19 percent food inflationThat's basically 15 years inflation in one year - wow

[scruff1] 19/4/2023 08:04

Could have done with the economists being right for once with their inflation predictions. But pigs dont fly so down we go before going down again on Friday. Ah well zzzzzzzzzzz

[trikytree] 05/4/2023 22:29

I wanna try too

[nickrl] 05/4/2023 21:27

@chucko they entered into that swap in the full knowledge that the JS JV was going to wound up which was going to result in a big cash inflow so could end up over hedged if they go down the debt reduction route. Anyhow a maintained 6p annual divi needs c75m and that isn't covered from the current 95m NRI after op cost and interest charges even with the annual inflationary increase would be several years. However, clearly the opportunity is surplus cash from the JS JV which i reckon to be 220m which is what changes the above assumptions although exactly when they will decide between debt reduction, acquisition or share buyback remains to be determined but guess they will keep it on deposit somewhere so coverage will be restore quicker. Definitely a HOLD but as im currently not a holder happy for Shore Capital to boot it to the top of my watchlist.

By the way Atrato will receive £7.5 million performance fee from the JS JV sale so they've done alright.

[chucko1] 05/4/2023 19:26

Nickrl, the simpler explanation is that they saw rates going higher!

Everything else is tangential - the fact that the £41mn was paid means they have an offsetting asset on the balance sheet through in-the-money swaps. No change in NAV. However, they amortise this asset over its life using standard treasury accounting methods which has approximately the same effect as paying the higher rate. All that said, they can afford the dividend for the next four years or so and then it's a trade-off between direction of rates and rate of increase/decrease in inflation.

The key thing here is to evaluate the probabilities of the different rate/inflation paths. If we have 3-4% inflation over the next 4 years and stable rates (by definition as all is fixed), I'm fine with a 7%+ yield. It's what happens thereafter - continuing stable rates at 4% with 3% inflation (1% real rates) just about works, but there are other paths which are possible, some of them being beneficial and others not so. The key personnel at Atrato are quite capable of making a decent fist of evaluating this, and in the meantime, I assume they will be adding value via incremental development of some of the sites.

Literally none of this examined in the Shore analysis.

[chucko1] 05/4/2023 19:04

Got it!

I'm not as stupid as I sound.

[nickrl] 05/4/2023 17:48

Personally i agree with Shore Capital on shelling out 41m to protect the unsecured facility. Yes they've got a lower rate fixed for the loan life but it was SONIA+1.5% prior to being fixed at an avg of 2.6% vs 5.78% un protected at current SONIA rates for four years. So wont take much of a drop in rates to be out of the money but guess they wanted full protection or perhaps their advisers were at the opposite end of the spectrum to those employed by Aberdeen!

[jonwig] 05/4/2023 15:02

Spec - ✔️.

Almost all comment functions in the press don't need this, you just comment away, and do whatever formatting you want. ADVFN is an exception. ADVFN has another annoying feature - if you copy a link, it may zap it if it's on their "competitor " list.

[chucko1] 05/4/2023 14:59

I once had a vacation job coding in APL at IBM. I think I will have to practise on some totally unread board to avoid my blushes.

My ignorance is deeply shameful.

[spectoacc] 05/4/2023 14:52

Test

Hope no one noticed that took 5 attempts.

[jonwig] 05/4/2023 14:51

chucko - it's html language. If I showed you in detail, the post would be ruined by using html symbols to explain html!

I'll try though.

To put SOME TEXT in bold, type this: [B]SOME TEXT[/B]. or italics [I]SOME TEXT[/I] except don't use [ and ], use < and >.
For pictures it's more involved. Google "img src". Can come back to you.