Supermarket Income Reit Share Discussion Threads

[elsa7878] 05/11/2024 19:34

Guessing gilt yields heading up post budget and the budget increasing staff costs particularly for supermarkets (apparently) is not helping here.

[marktime1231] 05/11/2024 16:18

It better aligns the manager with shareholders, but it doesn't give them a magic wand to make the discount disappear. If you were the manager how would it make a difference to what you do? I suppose it means the manager shares our pain at low times. But to ease the pain we still have to wait things out.

[tradez4dayz] 05/11/2024 13:25

Lxi used to use it but not sure of many others

[marktime1231] 05/11/2024 11:50

This fee arrangement sounds progressive. Any examples of it being used elsewhere?

[chucko1] 05/11/2024 11:04

I agree - as I have previously maintained, better to have capital markets experts above RE experts. Different breed. It also helps to put into perspective the decision to venture into France - trust management to manage.

Additionally, considering the new government's direction of travel regarding tax, spending and (wilful) ignorance about issues relating to economic efficiency, having a management who can negotiate a more volatile rates environment could prove to be of meaningfully incremental value - even if that means a reduction of possible negative value.

[williamcooper104] 05/11/2024 09:17

Excellent news Goes to show that we have the benefit of having one, alas one of the few, external managers that really cuts the mustard

[parob] 05/11/2024 07:42

Been looking to take a position here. Today's news is the trigger.

[rimau1] 05/11/2024 07:33

Nice precedent for other REITs too. We have been discussing for a while on various BB's mainly around the winddowns of how NAV is no longer the most appropriate guide of REIT business valuation. Great news.

[spectoacc] 05/11/2024 07:31

Fee to be based on mkt cap not NAV, a good move.

[dartboard1] 04/11/2024 14:11

That's like saying what's the difference between BHP and the FTSE100... ones an individual stock, one is a broad measure of stocks across the index

[1safetrader] 04/11/2024 13:38

Anyone familiar with UKRE ETF? How would you compare this with SUPR REIT, both are north of 7% yield!

[1knocker] 01/11/2024 10:03

Very difficult to know what to do at present. The last few years I have done very well with Uranium, but I can't say i have much idea at present as to what may be the 'next big thing'. Silver perhaps? I like the bullion better than the miners, and have quite a bit of it.

I went overweight on oil and gas last year as well. That certainly has not played out over the past 12 months.

I was very lucky with Tritax Eurobox though, as I bought it for the income and within a couple of months it rocketed on a takeover. I sold out and put a chunk of the money into Enquest 9% loan notes at 95 and a bit. That still looks a good bet to me, but steer well clear of the Enquest ordinary shares IMO.

I also like the look of HICL, and have built a bit of a position there, and increased my holding in Smiths News. That looks good for a while provided that the management stick to the knitting and doesn't get cute with acquisitions now that the company is debt free.

The Schroder real estate investment trusts also look interesting. Not likely to set the Thames on fire, but the dividends look fairly safe.

[chucko1] 01/11/2024 09:54

"tax/borrow and spend" ...

... not forgetting "waste".

[laurence llewelyn binliner] 01/11/2024 09:01

1Knocker, interesting comment as always, I have had EBOX/BBOX/SUPR on my radar for 2024 and trying to pick the safest place for sustained dividends to build a position.

Progressive dividends here in year 7 with the share price under pressure from increased debt interest from refinancing off the next to ZIRP low was always going to get more expensive, near term that will not change as it cycles through, but I have yet to try and break down their debt and renewal points with corresponding cost increases, I was using the share price to tell me that.. :o)

c71 pence entry does look good value for 6 pence income for 2025, share price has been pretty flat for 18 months..

Our new Gov tax/borrow and spend policy is going down a treat..

[hindsight] 31/10/2024 19:07

Never say never Specto but 1970s much more likely at present

[chucko1] 31/10/2024 18:57

"So this looks like as clean a shirt as any from the dirty washing pile."

SOHO seems cleaner still. With Atrato to be the new IM and with rents uncapped as is the case with SUPR, the risk has now been slanted in favour of the former if you consider the additional risk to yields from yesterday's budget.

Note the muted movement in SOHO as compared with things like SUPR and especially BBOX. If yields were to spike, say, a Truss-esque 200bps, the likes of BBOX, SREI, PHP etc. would be far more exposed. There would been remaining yield spread left in those three, whereas there would be some leeway in SUPR, SOHO and a few others of similarly good quality yielding 8.5% and above.

The wind down candidates with imputed yields of 15% and more and of short duration are unaffected by the Gilt mess, and represent a decent risk management tool. Similarly (especially), ASLI which basically is a Euro balance sheet enjoys both a low current price with funding scenarios diametrically opposite those with GBP balance sheets.

Enjoy the madness, although the probability of a crisis affecting us all badly is material.

[spectoacc] 31/10/2024 18:53

It's not so long since interest rates were 0.1%, but I'd wager neither that, nor 120p, are returning.

[1knocker] 31/10/2024 18:30

LLB, don't bank on borrowing costs falling.

Historically, inflation goes hand in hand with high energy prices and vice versa, and the magnitude of government borrowing is such hat its burden can only be kept in check by reducing its value through inflation. Similarly high growth tends to coincide with low energy prices and vice versa.

Work out for yourself what tax rise it would take to reduce the national debt by, say, 5% and ask yourself whether such a tax rise will be levied and applied to debt reduction, or whether resort will be had to inflation. Expect inflation to remain well above 2%, with periodic spikes ('cured' by a government 'intent on keeping inflation down', of course - LOL).

The budget seems to me to turn the page back to the 1970s. Perhaps appropriate now that we have a Chancellor who looks and sounds like Olive from 'On the busses'!

The rents here are index linked, and supermarkets are pretty sound tenants.

So this looks like as clean a shirt as any from the dirty washing pile.

You are fortunate to be building a holding at 70ish. most of us are nearer to 100, some in 3 figures. it is not so long since this was 120p!

[mpage] 31/10/2024 18:26

Your missing the refinancing risk of their debt. This is a problem for many property-related vehicles collecting rent. We really don't know the shape of the landscape in, say, 2029. SUPR divs are what's left over from the gap between rents in and debt financing out. Rent rises are capped at 4%. One risk is that dividend growth of SUPR could be really rather meagre - I think this is why they have gone to France, the spreads are a bit wider.

[spectoacc] 31/10/2024 17:29

I'm a holder, but you're perhaps missing that SUPR is a financial vehicle, which will (& does seem to) trade on Gilt yields.

[laurence llewelyn binliner] 31/10/2024 16:55

1Knocker, we meet again, looking to start building a position here in the near future, 70 pence looks a very good entry for the strong dividend income so long as it is sustainable long term..The REIT pays out 90% earnings and a model I like, their rents are very unlikely to go down and debt should get cheaper over time as they refinance..What am I missing here..? (if anything).. :o)

[1knocker] 31/10/2024 16:37

Managed to pick up a few at 70.1 just before the close.
We have just had a budge for the 1970s. A copybook exercise for producing stagflation.

[return_of_the_apeman] 31/10/2024 15:30

8.7% @70.5p

[dartboard1] 31/10/2024 13:12

They're only just covered on the dividend 1.01. Revenue is fixed with very secure tenants and grows with inflation, so I would say yes, secure, but no room for much growth of divi. But at 8 percent who's complaining ...