Supermarket Income Reit Share Discussion Threads

[williamcooper104] 14/9/2020 08:50

Nice Another 10-20bps of potential dividend increase

[perfect choice] 14/9/2020 07:29

And another acquisition this time a Tesco omnichannel store. That link to the KID document didn't work for me and if you go directly to the company site, you'll find the 2019 version. Requires some announcement/site update coordination SUPR!

RNS Number : 8182Y

Supermarket Income REIT PLC

14 September 2020

SUPERMARKET INCOME REIT

(the "Company")

LEI: 2138007FOINJKAM7L537

acquisition of a tesco supermarket and Updated Key Information Document ("KID")

Supermarket Income REIT (LSE: SUPR), the real estate investment trust providing secure, inflation-protected, long income from grocery property in the UK, announces the acquisition of a Tesco supermarket in Bracknell from a client of CBRE Global Investors for GBP39.5 million (excluding acquisition costs), reflecting a net initial yield of 5.7%.

Developed in the early 1990's, Tesco has a long history of trading from this prominent 7.3-acre site which comprises a purpose-built food store and a 400-space surface car park. The store has several purpose-built online distribution docks, supporting Tesco's online grocery business across the region. The asset is being acquired with an unexpired lease term of 10 years with annual, upward only, RPI-linked rent reviews (subject to a 4% cap and 0% floor). The acquisition will be financed via a GBP40 million increase of the GBP100 million RCF facility provided by HSBC. The increase will be priced at a 1.75% margin over 3-month Libor.

The Company has also published an updated Key Information Document ("KID") in accordance with the requirements of the Packaged Retail and Insurance-based Investment Products ("PRIIPs") Regulation.

The KID provides key information about the Company as an investment product. It is not marketing material. The KID contains information about the Company in a prescribed format and should be considered alongside the Company's statutory filings, such as the Annual Report, which can also be found on the website.

The full KID is available to view and download on the Company's website at: hxxps://www.supermarketincomereit.com/investor-centre

Ben Green Director of Atrato Capital, the Investment Adviser to Supermarket Income REIT, said:

"This omnichannel Tesco supermarket is an excellent addition to our portfolio. The store is situated in a prime location and is an important online grocery fulfilment hub, supporting both home delivery and click and collect."

[brexitplus] 10/8/2020 07:13

Another acquistion.

Supermarket Income REIT (LSE: SUPR), the real estate investment trust providing secure, inflation-protected, long income from grocery property in the UK, announces the acquisition of a Morrisons supermarket in Telford from Santander Trustees Limited for GBP14.3 million (excluding acquisition costs), reflecting a net initial yield of 5.0%.

Developed in 2012, the four-acre site is located at a prominent roadside junction in the centre of Lawley Village, a new 3,550-home development. The site comprises a 42,434 sq ft gross internal area supermarket (27,000 sq ft net sales area) with 220 parking spaces and an online click-and-collect facility.

It is being acquired with an unexpired lease term of 17 years with a break option in year 12. The lease is subject to five-yearly, upward-only, RPI-linked rent reviews (subject to a 3% cap and 1% floor).

[williamcooper104] 28/7/2020 18:00

Another acquisition £61m Tesco, 4.6 NIY with 16 years unexpired, RPI capped at 5 percent rent reviews Looks like all funded with a new debt facility at 2.1 percent - so ought to be notably accretive to earnings and dividend

[jonwig] 07/7/2020 06:50

I think grim has a good point, in that at first sight the cap looks a bit stingy for SUPR. But SUPR in return is getting a more secure income stream than many propcos could, and competition will depress supermarket margins, damping down end-consumer inflation.

As to UK inflation, index-linked gilts are behaving as though a rise is inevitable. I've bought a lot of the etf INXG which has been performing extraordinarily well. On the other hand conventional long-dated gilts are hardly signalling red.

[williamcooper104] 06/7/2020 22:13

2068 linker Pay £270 Receive back inflation and £100 capital That's just how crazy expensive inflation protection is (Sorry just checked - last time I looked price was 270 - it's now £309 - real yield now around negative 230bps)

[williamcooper104] 06/7/2020 22:10

That said 5 percent used to be the usual cap (mainly because many pensions have their RPI increase caped at 5 percent so that was all many pension funds need) - 3 is a little low

[williamcooper104] 06/7/2020 22:08

It's quite common to have caps on inflation rents in commerical leases PFI contracts and most ground rents tend to be uncapped Mind you anybody signing up to uncapped RPI needs head examining - and any investor in a hyper inflationary environment may not see the income - tenants do after all not always pay their rent :) It's a good yield with a degree of inflation protection Relative to gilts with no protection and no yield and linkers with full inflation protection and negative 200bps yield its a good risk/reward

[bscuit] 06/7/2020 20:32

If I recollect correctly there is a cap on some of the others

[grim] 06/7/2020 20:14

five-yearly, upward-only, CPIH-linked rent reviews (subject to a 3% cap)-not good if inflation takes off big-time.

[brexitplus] 06/7/2020 13:38

Video interview on acquisition

www.proactiveinvestors.co.uk/companies/news/923491/supermarket-income-reit-acquires--cracking-portfolio--of-six-waitrose-supermarkets-923491.html

[jonwig] 06/7/2020 07:11

Yes, it's Waitrose:



That's £125m of the £140m they raised in April spent on two deals.

[williamcooper104] 01/7/2020 21:06

Think this one is for Waitrose https://reactnews.com/article/supermarket-reit-steps-up-for-75m-waitrose-deal-as-expansion-continues/

[jonwig] 26/6/2020 10:08

Another RNS:

Further to recent press commentary, Supermarket Income REIT (LSE:SUPR) the real estate investment trust providing secure, inflation-protected, long income from grocery property in the UK, confirms that it is in discussions to acquire a portfolio of assets via a sale and leaseback transaction with a major grocery operator.

The Company will make further announcements in due course, as appropriate. There can be no certainty that the acquisition will be agreed nor as to the terms on which any transaction might be concluded.
I don't know the source.
They did a deal with Sainsbury's a while back.

[rik shaw] 26/6/2020 07:17

The Company confirms receipt of 100% of the contracted June 2020 quarterly rental payments.

No material uncertainty clause

The Company's independent valuer, Cushman & Wakefield, has informed the Company that it will not include a material uncertainty clause in its forthcoming valuation of the Company's portfolio (financial year ending 30 June 2020). This is in line with guidance from RICS and reflective of the underlying credit strength of its tenants and the sustained investment demand for grocery property

[perfect choice] 27/5/2020 13:55

Well I see SUPR finally went ahead with this venture to acquire a stake in Sainsbury's properties in conjunction with the British Airways Pension Trustees Limited on a 50/50 basis for 25.2%.

Chairman's comment "Our investment in this Sainsbury's property portfolio gives us an interest which we believe will be highly NAV accretive over the next three years. We will work closely with the co-owners, Sainsbury's and Aviva, to extend the leases and find a solution to the longer term ownership of the properties." and "the Board is targeting annualised NAV growth from the investment in excess of the Company's targeted annualised total shareholder return of 7-10%(1)", are significant factors from an investor perspective.


RNS Number : 9947N
Supermarket Income REIT PLC
27 May 2020
SUPERMARKET INCOME REIT
(the "Company")
LEI: 2138007FOINJKAM7L537
Formation of Joint Venture TO ACQUIRE a stake in a SUPERMARKET portfolio
Supermarket Income REIT (LSE: SUPR), the UK supermarket real estate investor, announces the formation of a 50:50 joint venture (the "JV") with British Airways Pension Trustees Limited ("BAPTL") acting on behalf of the British Airways Pension Fund to acquire from British Land Plc a 25.5% stake (the "Acquisition") in one of the UK's largest portfolios of supermarket properties (the "Portfolio") for GBP102 million.
The Company's contribution to the JV is GBP51 million, excluding costs which will be satisfied from its existing cash balances and credit facilities.
The Portfolio consists of 26 Sainsbury's supermarkets. It is a geographically diverse high quality portfolio of stores with a London and south east bias. It was created through two sale and leaseback transactions by Sainsbury's in 2000. Following this transaction, the freeholds of the properties are now owned by Sainsbury's (49%), Aviva (25.5%) and the JV (25.5%).
The Portfolio is funded by bonds, which mature in 2023. The rental income received from the Portfolio pays down the outstanding balance of the bonds to a final amount which will be repayable in 2023 by way of a refinancing or sale of the Portfolio.
The directors of the Company (the "Board") believe that the principal benefits of the Acquisition to shareholders are as follows:
-- High quality portfolio: the JV investment will give the Company an interest in a large freehold high quality portfolio of predominantly omnichannel supermarkets with strong property fundamentals.
-- Progressive valuation growth : the Board is targeting annualised NAV growth from the investment in excess of the Company's targeted annualised total shareholder return of 7-10%(1) .
-- Optimal capital structuring: the 50% JV investment interest is sized to minimise dividend cover dilution for the Company while maximising the total return to shareholders.
-- Attractive future pipeline: the acquisition gives the JV a stake in a significant portfolio and the opportunity to increase that holding at the appropriate time.
1 There is no certainty that these illustrative projections will be achieved
Nick Hewson, Chairman of Supermarket Income REIT, said:
"We are very pleased to have formed a strategic long term partnership with British Airways Pension Trustees Limited to facilitate this transaction."
"Our investment in this Sainsbury's property portfolio gives us an interest which we believe will be highly NAV accretive over the next three years. We will work closely with the co-owners, Sainsbury's and Aviva, to extend the leases and find a solution to the longer term ownership of the properties."
Further information:
The Portfolio
The Portfolio was created in 2000 through two sale and leaseback transactions which were funded by bonds issued under two securitisations Highbury Finance B.V. ("Highbury") and Dragon Finance B.V. ("Dragon"). Highbury and Dragon comprise 16 and 10 Sainsbury's supermarkets respectively. The offering circulars for the original securitisation transactions are available from www.euroabs.com.
Out of the 26 stores in the Portfolio, 23 are omnichannel, offering physical shopping, click and collect and online home delivery. The majority of stores incorporate an Argos. The average store net sales area is approximately 61,000 sq.ft. with an average gross internal area of approximately 79,000 sq.ft. The average site size for each store is 7.3 acres. Approximately 60% of the Portfolio is located in London and the south east.
The Occupational Leases
Sainsbury's occupies the stores under the current occupational leases (the "Occupational Leases") and pays 100% of the rents. The Occupational Leases generate an annual rental income of GBP53 million, with the lease rent subject to fixed annual uplifts of 1% per annum. They expire conterminously with the maturity of the bonds in March 2023 (in relation to Highbury) and July 2023 (in relation to Dragon).
The income from the Occupational Leases services the interest and principal repayments of the bonds. The bonds amortise out of the rental income to a remaining outstanding debt amount of GBP315 million on expiry in 2023. The debt due on expiry is expected to be funded by way of a re-financing or sale of the Portfolio.
At lease expiry in 2023, Sainsbury's has the option to extend the leases for a further term of 20 years at the higher of passing rent or open market rent, subject to upward-only, five yearly market rent reviews or to vacate the properties.
JV Investment Adviser and fees:
Atrato Halliwell Limited (the "JV Investment Adviser") will act as the investment adviser to the JV and is a newly established affiliate of Atrato Capital Limited. The JV Investment Adviser will receive an annual advisory fee payable by the JV only on the proportion attributable to BAPTL. There will be no additional advisory fee payable by the Company. The JV will also pay the JV Investment Adviser a promote fee based on the financial performance of the JV. The promote fee is a market standard, carry waterfall accruing from an 8% IRR but only payable by the JV if annualised returns to the Company exceed 10% at refinancing or sale.
Full store list:

Alperton, Ealing Road, HA0 Gloucester, Barnett Way, GL4 3RT
4LL
Alton, Draymans Way, GU34 Guildford, Clay Lane, GU4 7JU
1SS
--------------------------------------
Aylesford, Mills Road, ME20 Hastings, John Macadam Way, TN37
7NA 7SQ
--------------------------------------
Bromley, Walters Yard, BR1 Haywards Heath, Bannister Way, RH16
1TP 1DG
--------------------------------------
Chester, Caldy Valley Road, Hemel Hempstead, Apsley Mills, HP3
CH3 5QJ 9QZ
--------------------------------------
Chichester, Westhampnett Kettering, Rockingham Road, NN16
Road, PO19 7YR 8JY
--------------------------------------
Coventry, Austin Drive, CV6 Kidlington, Oxford Road, OX5 2PE
7NS
--------------------------------------
Denton, Oldham Street, M34 Knotty Ash, East Prescot Road, L14
3SJ 5PT
--------------------------------------
Derby, Wyvern Way, DE21 6NZ Leamington Spa, Tachbrook Park Drive,
CV34 6RH
--------------------------------------
Doncaster, Thorpe Road, DN2 Norwich, Queens Road, NR1 3RX
5PS
--------------------------------------
East Grinstead, Brooklands Shrewsbury, Hereford Road, SY3 9NB
Way, RH19 1DD
--------------------------------------
Eastbourne, Broadwater Way, Taplow, Lake End Road, SL6 0QH
BN22 9PW
--------------------------------------
Ferndown, Ringwood Road, Witney, Witan Way, OX28 6HF
BH22 9AL

[macc1] 04/5/2020 17:14

Video:

Here's a 5 minute investors overview of SUPR with the principals Ben Green & Steve Windsor:

[perfect choice] 01/5/2020 14:55

Also just gone ex dividend, looks like a 1p usual drop there but that is about it for now. Guess SUPR being considered worth holding on, considering relative income security and where would money go anyway (apart from holding as cash maybe) in what I feel now is a falling market with a tsunami of earning downgrades to come.

[bscuit] 01/5/2020 11:59

I would have thought the price would have drifted a little more following the completion of the placing.

[bscuit] 28/4/2020 10:57

My applications were five figure sums and allocated in full.

[perfect choice] 28/4/2020 10:35

Think scaling back was for large volume orders against the placing, smaller ones below a threshold untouched but don't know the exact threshold.

[bscuit] 28/4/2020 09:57

Says was scaling, but no details..

[perfect choice] 28/4/2020 09:39

Agreed, well placed for further store acquisitions within their targeted framework now and relatively secure rent income, when compared to other areas more likely to be hit by recession downturn once the economic impacts of coronavirus come through, but we always we need, etc so omnichannel supermarkets a good place to be IMHO.

[jonwig] 28/4/2020 06:27

I have the impression there will be lots of companies trying to raise new equity over the next year. Why not get in first?
"Strongest to the front of the line, please."