Supermarket Income Reit Share Discussion Threads

[williamcooper104] 04/3/2021 18:02

There's a lot of gated funds selling their better assets at moment

[chucko1] 04/3/2021 17:44

They do not need to raise equity as they have loads of headroom in terms of borrowing capacity. But yes, they have indicated they love assets at the current levels as needy sellers still sell. Speed is of the essence as the universe of possible investments for them is small and they need to grab any and all of them when within their investment criteria.

Equity markets still buoyant and the rule is to use liquidity when it is there, and not to go for the best price. I had though they might raise further equity after a reval of the portfolio taking the share price along with it. Especially with the current very low LTV. We will see how much they buy in the coming weeks, but the current pace is rapid.

[kinbasket] 04/3/2021 16:58

The prospectus has four pipeline targets totalling £230m. Plus a further nine potential targets.

[williamcooper104] 04/3/2021 16:00

I think it's that - always easier to raise debt than equity so raise equity while the equity markets are open Doubt they are doing it without a pipeline to fund

[jonwig] 04/3/2021 15:46

In #361 I doubted they would raise equity so soon. Obviously wrong call. But it prompts me to ask whether they made a good decision.

The most simplistic deduction is that they are taking cynical advantage of the premium and the opportunity to raise equity. The market reaction was - as always - to shrink the share price gap. In the longer term maybe the premium gap will not widen so much so making an equity issue less easy to negotiate, and this showing up in a permanently reduced nav premium and share price drag.

The PB offer is provisionally open until 18/03 so plenty of time to watch the share price and decide.

[apollocreed1] 04/3/2021 13:36

AJB are very good at that. Others don't offer the service

[bscuit] 04/3/2021 09:42

On a previous placing I got in touch with Stifel directly and arranged for AJB to contact them directly to take up the placing. I was applying for about £20k. Though I am HNW I don’t recollect the point being material.

[adamb1978] 04/3/2021 08:37

Thanks CWA1

[cwa1] 04/3/2021 08:36

Depends if your broker is one of the intermediaries for the offer. EQI usually are and it is easy just to apply directly through them. Others will be offering it too most likely

[adamb1978] 04/3/2021 08:31

I assume to get shares into an ISA via the offer you'd need to invest via Primary Bid and then transfer them into the ISA? i.e. you cant apply from an ISA directly?

[frazboy] 04/3/2021 08:12

Back to just above the placing price.. at least the discount is smaller on this occasion!

I wonder if they were getting the budget out the way prior to its announcement?

[janeann] 04/3/2021 07:42

Be difficult to get those new ones in my ISA!

[cwa1] 04/3/2021 07:41

LOL, didn't take long for another begging bowl to come around :-)

[jonwig] 04/3/2021 07:39

Well, mea culpa, I got that one wrong! (Sorry, Bscuit.)

The Board of Supermarket Income REIT plc, the real estate investment trust providing secure, inflation-protected, long income from grocery property in the UK announces its intention to raise approximately GBP100 million by way of an issue pursuant to the Placing Programme, at 106 pence per New Ordinary Share.

Interesting can participate via Primary Bid.

[alan@bj] 02/3/2021 11:53

Thanks Skyship.

[williamcooper104] 02/3/2021 11:49

Love RECI too - happy to hold both it and SUPR - RECIs short duration loans means it won't get wiped out with inflation I think you will get around the same long term returns from both RECI and SUPR - IMO SUPR has less risk than RECI Or another way of putting it - with RECI you need a very good management team (which you do have fortunately) whereas with SUPR you don't (particularly when it gets towards its targeted size)

[williamcooper104] 02/3/2021 11:45

There's better value in the sector - SHB/HMSO are cheaper - but they have their issues to say the least (c35 percent rent collections) - I don't think there's better risk adjusted value in the sector (IMO)

[williamcooper104] 02/3/2021 11:44

As a reit with a market cap of over a £1bn (which is where we are headed to with repeated share placings) they will get better institutional demand and will provide new and existing shareholders with better liquidity There's about 10 percent reversion within next 3-5 years, plus an extra c12 percent distributable income by getting to their targeted leverage - so we ought to see total divi growth over 3-5 years of c20 percent, and longer term returns of c8-10 percent

[skyship] 02/3/2021 11:04

alan

Well, many are frequently detailed on the CP+ thread; but to offer just three:

# AIRE@64p: Disc.=24.4%; Yld=7.0% (8,6% prospective)
# MCKS@200p: Disc=36.1%; Yld=5.1%prospective
# SREI@41p: Disc=30.3%; Yld=6.1%

For a pure yield on only a 6%discount, go for the perennial favourite RECI@142p; Yld=8.4%

[bscuit] 02/3/2021 10:47

Jon,

Historically my recollection is that placings have always been targeted against acquisitions and not merely to raise cash, but the value of SUPR for many is the income and without acquisitions the secure income may result in increased buying pressure, which seems to get dampened down by using the capital strength to justify more placings for targeted acquisitions rather than allowing the capital value to move up, which would provide an additional benefit for holders wishing to exit.

[jonwig] 02/3/2021 10:11

Bscuit - "Whenever the price goes up as at present I suspect another placing."

If they raise equity cash when they don't have target acquisitions it leads to cash drag on the balance sheet and an uncovered dividend for maybe a year. This tends to be frowned on.

They can make single acquisitions from their debt facility and would raise new equity only when they had made a few of these or intended buying a bigger portfolio.

As they said, they expect to increase present LTV of 27% to as high as 40%.

[williamcooper104] 02/3/2021 10:01

I wasn't able to buy it with Interactive broker so had to use HL IB are now allowing me to hold, not sure if they are now covering special fund segment or whether SUPR has moved its listing (it should if hasn't)

[bscuit] 02/3/2021 09:48

And yet it’s still in the specialist sub-sector. II wanted to buy it in the last two placing with one broker, but was refused as it wasn’t for retail clients- even though in one of our accounts it was already held - but AJ Bell had no problem.

Whenever the price goes up as at present I suspect another placing.

There may be better value in the sector, but for simpletons like me that involves much more research and being better informed than I feel I am.

[jonwig] 02/3/2021 09:19

They didn't say, but emphasised flexible balance sheet and higher LTV target, so I'd guess not ... not large ones anyway which could involve PIs.

[frazboy] 02/3/2021 09:13

Any chat on further raises, Jonwig?