Supermarket Income Reit Share Discussion Threads

[brexitplus] 26/7/2021 13:43

Interesting video on use of Artificial Intelligence, particularly relevant from about 19 minutes on.

[brexitplus] 23/7/2021 15:20

Agree. 35,000

[financeguru] 23/7/2021 15:10

just for disclosure purposes and so I don't take flack for ramping, I do have approximately 80,000 of these and I have no intention of selling any.

[financeguru] 23/7/2021 09:36

this is so good to own, no hassle, no pain, great dividend, good gain. what is not to like? Everyone should have it in their portfolio!!

[williamcooper104] 15/7/2021 12:57

Unfortunately as a European MiFIDed retail investor you can't buy it (where's Brexit when you need it :) - but you can buy calls and then have those assigned at expiry

[williamcooper104] 15/7/2021 12:14

choko1 - re interest rate hedges - this US ETF is interesting PFIX: Leveraged Interest Rate Hedge ETF https://seekingalpha.com/article/4439309-pfix-leveraged-interest-rate-hedge-etf

[chucko1] 15/7/2021 10:47

In the January presentation, it seems to me that (actually, it is what they said) the entire universe of supermarkets that could be of interest them was around £2.5bn. This being the case, Morrisons seems a distant prospect, never mind the price.

[cwa1] 15/7/2021 08:20

Indeed, and pay day is 20/8/21

[return_of_the_apeman] 15/7/2021 08:19

X-div today

[jonwig] 15/7/2021 07:18

The new fees arrangement announced just now introduces a new, lower, tier above £2bn of assets. They tell us their ambition is to become a £2bn-plus company.

Apart from fundraisings to achieve that, they've already admitted that acquiring Morrisons properties won't come cheap.

[jonwig] 14/7/2021 06:48

FT has an article on property options for a new Morrisons owner. For example:

Steve Windsor, a principal at Atrato Group, said financial buyers would pay high prices for freehold sites with Morrisons as a tenant on a 20-year lease. Atrato advises the Supermarket Income Reit, an acquirer of such freeholds.

“[Morrisons] could raise considerable cash just by reducing the freeholds to the same level as Tesco,” he said. The UK’s market leader owns just under 60 per cent of its stores.


Sale-and-leaseback could also be achieved without a third party buyer of the "opco, propco" model where propco is itself owned by the new owner
message seems to be that if SUPR, say, acquired properties it would not be on the cheap!

[rik shaw] 08/7/2021 07:26

Dividend declaration
interim dividend in respect of the period from 1 April 2021 to 30 June 2021 of 1.465 pence per ordinary share, payable on or around 20 August 2021 (the "Interim Dividend"). The ex-dividend date will be 15 July 2021 with a record date of 16 July 2021. The dividend will comprise a Property Income Distribution ("PID") of 0.585 pence per share and an ordinary dividend of 0.880 pence per share.

[skyship] 03/7/2021 16:28

I'm a big fan of REITs - hence the CP+ thread. There are many examples of just "BUY & HOLD"; but I've always been a trader - taking turns and moving onto another similar where I perceive better value.

It happens so often that one player gets ahead of itself whilst another languishes under a tap - as the charts on the CP+ header show so well.

[williamcooper104] 03/7/2021 14:30

Remember there's at least three good reasons why a successful reit should trade at a premium to NAV 1 the red book valuations assume purchasers cost of 6.8 percent, whereas all we have to pay is stamp duty on equity at 0.5 percent and a little bid ask spread 2 private market values assume a deeply illiquid asset that even in a good market can take 3-6 months to sell 3 buying into a reit gives instant property level diversification and reduces the property level specific risk of any one asset

[skyship] 03/7/2021 13:28

Not a holder, but just happened to be looking at the other propcos trading on a premium to their underlying NAVs; and likely to be hit by more equity issues as management takes the opportunity to enlarge the companies - as per LXI & SHED just recently.

SUPR - Sp 118p; NAV 104p (Dec'20); Yield 4.92%. NAV might well be nearer 108p now, so reducing the premium from 13.5% to 9.2%. So another issue at 108p/110p perhaps.

Could pay to switch into the admittedly much smaller:

AIRE - Sp 71p; NAV 85.13p (Mar'21); Yield 7.04% (7.75% prospective '22); Disc. 16.6%

[williamcooper104] 02/7/2021 18:23

It is - though the cap on RPI is likely to be c3 percent Being in Surrey there will be attractive alternative use values which mitigates (at least a bit) the covenant risk The story in supermarkets has always been that so long as the core business model is there then the covenant risk is lessened as another operator can more easily take over a supermarket site than a retailer or food and beverage operator could take over another operators premises Note the stress on lessened, an operator default would still be painful

[makinbuks] 02/7/2021 15:35

With base rates at 0.1%, 3.7% index linked for 24 years is attractive provided the covenant holds up. Imagine if that kind of yield compression were to be applied to the whole portfolio

[williamcooper104] 02/7/2021 15:25

Lidl store in Waybridge, Surrey (24 years with RPI uplifts) was marketed at 4 and traded at 3.7 Was a small store so won't have much asset management opportunities

[williamcooper104] 24/6/2021 17:39

BoE now saying inflation will go above 3 percent - which means RPI could get to 4 percent Getting to 9 IRR not looking too demanding; with a bit of extra leverage, a bit of inflation and just a little cap rate compression

[williamcooper104] 24/6/2021 09:27

I think that's right, huge sale and leasebacks won't crowd the market given the oceans of institutional capital, and it does offer scale opportunity for SUPR (in fact if anything it's the opposite, there's plenty of institutions who do not want to painfully build up a portfolio of £50m assets but who would jump into a £1bn sale and leaseback so you could actually see further yield compression) The lease contracts might have change of control on a lease guarantor, but an acquisition of a PLC/topco ought not to trigger that

[makinbuks] 24/6/2021 09:16

Agree with your second point so if the bid is successful there could be more Morrisons stores on the market. Regarding others in play however, who do you mean? Asda already gone, Sainsbury backed by middle eastern sovereign, so just Tesco? Second tier? Aldi, Lidl, M & S, Co-op? Again all no for a variety of reasons

[jonwig] 23/6/2021 14:43

Although I think they own only three MRW stores, all s'mkts are in play, potentially.
There are probably clauses in the rental agreements regarding change of ownership.

So, would this be positive or negative for us? Neutral, I think.

Second factor: PE doesn'r want to own stores (dead money) it wants sale-leaseback. I think this would be positive for us, as it provides a ready increase in portfolio size.
If so, another equity raise could be on the cards.

[chucko1] 23/6/2021 13:48

You may end up with other more than 5% if the overall targets they have set are met. That would be an IRR of circa 9% or so. It will take a bunch of time, but that is something one comfortably has with this most boring of stocks.

That would be 12x the current 10yr Gilt yield. Not so boring, after all.