Supermarket Income Reit Share Discussion Threads

[chucko1] 04/10/2021 10:28

I saw the use of the word "exclusively" in the context of the PrimaryBid RNS, but the word was used ambiguously as it might have indicated that the way of applying through PrimaryBid was the exclusive use of their APP. The intermediaries may be referring to those advising people who must still use PrimaryBid.

The previous offer was exclusively PrimaryBid.

[jonwig] 04/10/2021 09:43

Unless I've read it wrong, there's an intermediaries offer, too. It's not yet on my broker's list (ii) but I expect it to be soon. (Not all brokers will get involved.)

[brexitplus] 04/10/2021 09:41

How can I make this work with HL.

[drg] 04/10/2021 09:25

So Primary Bid again is the only mechanism for PIs to directly participate in the Offer. ISA and SIPP holders will have to use the secondary market instead.

[nitnia] 01/10/2021 17:17

Anyone know about tax in SIPPS ?

The dividend here is part PID part normal div.

PID has 20% withheld but non PID is paid gross.

Is this correct and can you reclaim the tax?

Thanks in advance

[drg] 30/9/2021 09:03

Call me cynical but from a chart perspective it all makes prefect sense now, including the spike closes at 125 and 117.

[chucko1] 30/9/2021 08:44

Yup, I had thought that they would wait a while until they had a need for a further raise. This looks like the raise of all raises!

I expect the offer to be heavily oversubscribed and a serious dent put in the limit of the upper amount of £450mn. That is about £650mn of buying power at target LTV.

For one, I will be buying loads at 115p.

[brexitplus] 30/9/2021 08:40

From Proactive Investor

Yesterday

SUPR trades at a 3.1% premium to the wider UK real estate sector and yields 4.9%

Supermarket Income REIT PLC -
continues to be driven along by strong sector tailwinds says Berenberg, which reiterated its share price of 135p and 'buy' recommendation on the grocery chain landlord.

Today

The grocery-focused real estate investment trust has identified eleven properties that would fit its portfolio.

Supermarket Income REIT PLC (LSE:SUPR) announced plans to raise £100mln via a placing and an offer for subscription.

Shares will be placed at 115p each, a 4.2% discount to Wednesday’s closing price and a 6.5% premium to the company’s last reported EPRA NTA per share as of 30 June.

The grocery-focused real estate investment trust will use the cash to make more acquisitions, diversify its portfolio and capitalise on its strong position in the UK supermarket market.

The firm’s investment adviser, Atrato Capital, has identified opportunities including four assets with a total value of £180mln, with three of them currently under exclusivity and an additional asset in advanced due diligence.

It has also found a pipeline of seven assets with a total value of £420mln that meet the group's acquisition criteria.

Supermarket REIT said the proceeds of the placing will allow it to buy some of the target assets, and if it raises more cash it will consider buying more assets on the pipeline.

"The sustained growth in grocery sales, including the increased penetration of online, is driving value creation in the supermarket investment market,” said chairman Nick Hewson.

“The company has carefully grown its portfolio to over £1.4bn through selective and accretive acquisitions, whilst delivering investors a stable and growing income return.”

[financeguru] 30/9/2021 07:56

shareprice already written down by brokers by 2.5p

[williamcooper104] 30/9/2021 07:40

Snap them up

[brexitplus] 30/9/2021 07:38

Where does that leave us?

[janeann] 30/9/2021 07:37

cant work out from that how exisiting shareholders apply...... will we get a note from our broker inviting us to participate

[jonwig] 30/9/2021 07:27

The Board of Directors of Supermarket Income REIT plc (the "Board" or "Directors"), the real estate investment trust providing secure, inflation-linked, long income from grocery propert y in the UK, announces its intention to raise approximately £100 million by way of a placing (the "Placing") and an offer for subscription (the "Offer for Subscription", together with the Placing the "Initial Issue") at an issue price of 115 pence per New Ordinary Share.

... discount of 4.2 percent to the closing price of 120 pence per existing ordinary share ... and a 6.5 percent premium to the Company's last reported EPRA NTA per Ordinary Share as at 30 June 2021 of 108 pence

As if that weren't enough:

In conjunction with the Initial Issue, the Directors intend to implement a Placing Programme to enable the Company to raise additional equity capital through the issue of up to 450 million Ordinary Shares over the course of the next 12 months. The Placing Programme will allow the Company to tailor future equity issuance(s) to its pipeline, providing flexibility and minimising cash drag.

For the record,I think there are 811m shares in issue currently.

[financeguru] 30/9/2021 07:24

Looks like it is worth taking up the offer on the new placing. 4.5% discount not to be sneezed at and the company is well run too. Any thoughts?

[brexitplus] 29/9/2021 13:57

Hi Chucko - yes lots of positives, particularly 2022 and 2023.

[chucko1] 29/9/2021 10:08

So did I!

Nothing new in this presentation from the January one. But the thesis is so compelling I think that is just what I would have wanted.

[brexitplus] 29/9/2021 09:02

Agreed. Excellent presentation, and I even had a question answered.

[pdt] 28/9/2021 15:30

Good presentation this afternoon. Interesting look at the economics of the omnichannel stores and how the "last mile" delivery has become increasingly cost effective compared to dark store fulfilment. And store yield compared to bond yields make the SUPR model even more attractive.

[makinbuks] 24/9/2021 12:59

Hard to disagree with any of that. As always I take what Libernum have to say with a large pinch of salt but their assumption looks reasonable to me

[drg] 24/9/2021 09:24

Accounting rules are a bore, but for investors in Supermarket Income Reit they are the key to rising returns. The appearance of lease liabilities on supermarket balance sheets has prompted more grocers to start buying back their stores, as the cost of debt is more attractive than retail leases.

Higher demand means increased property values, which for the supermarket landlord translated into an 8.5 per cent rise in the underlying value of the real estate investment trust’s portfolio last year. Those gains helped to push the Reit’s EPRA net tangible asset value up 7 per cent, ahead of analysts’ forecasts.

Yet if supermarket valuations are rising, it also means that the commercial landlord is having to stump up more for acquisitions — and it is very acquisitive. The portfolio has doubled in size over the past 12 months, with 20 stores bought for a total of £541 million, partly funded by two equity-raisings generating £341 million.

Income potential is the big attraction to shareholders, and it’s why the shares have been afforded a premium of roughly 8 per cent to even forecast NAV at the end of June next year. The payment is progressive and increases in line with inflation. For the 2021 financial year it paid 5.6p a share and is targeting 5.9p this year, which would leave the shares yielding about 4.9 per cent at the present 119¾p price.

In contrast with the broader retail property sector, those quarterly dividends are backed by a secure rental income stream. Rent collection was at 95.5 per cent last year and about 90 per cent of rents have fixed, upward-only uplifts or inflation-linked rises.

The loan-to-value ratio is comfortable enough at 34 per cent, around the midpoint of the target range. It still has just over £155 million in undrawn debt to access, but investors should expect further fundraisings once potential acquisitions are nailed down.

Analysts expect the Reit’s asset value to continue its trajectory. Liberum forecasts a net tangible asset value of 110p a share at the end of next year, rising to 114p at the same time in 2023. The shares aren’t cheap, but the reliability of the income should compensate.

ADVICE Buy
WHY Generous dividend yield backed by secure income

[alan@bj] 24/9/2021 09:00

Gets a mention in The Times Tempus column today, with a Buy recommendation.

[jonwig] 24/9/2021 08:15

chucko - yes.

william - pension funds hold cash (or T-bills or under 3-month gilts) anyway. SII simply limits real estate investment to a capped multiple of that.

[chucko1] 24/9/2021 08:02

Solvency II is a 2009 EU Directive. No one likes it, so its lifespan as it currently stands for UK insurers is uncertain at best. In many respects, like a lot of EU financial Directives, it is badly thought out as it was largely uncontested in the shadow of the GFC.

[williamcooper104] 23/9/2021 18:38

Hence the BP pension scheme JVing with SUPR There's a lot s2 regulated entities can do to lessen the capital hit

[makinbuks] 23/9/2021 17:22

Solvency II only applies where the insurer has an obligation, eg writes annuities or has bought out pension scheme liabilities. A pension fund itself, DB or DC is perfectly able to invest in such assets