Supermarket Income Reit Share Discussion Threads

[8gggggggg] 11/11/2024 09:26

Does anyone know when the AGM is, ? I was advised 10 days ago that the date had been changed.....but no mention when that might be.?Dakas.

[mindthestash] 08/11/2024 15:59

What I've read makes no mention of changing the way each property is approach so yes I would expect the current individual lease possession to be rated separately.

There's also no mention of any changes to the landlord and tenant legislation which I guess would be required to shift any cost liability from occupier to landlord for current leases. But I guess if that's what they were thinking they certainly would not mention it now. Elsewhere I came across babble about making landlord pay more for empty properties so this too might be a factor in rent negs in future.

I can see impact on rent new lease/renewals negotiations if occupiers property costs have increased but no really sure what the sums involved look like, De minimus or significant in terms of other peoprty cost so that they bite into market rents

[williamcooper104] 08/11/2024 15:54

Yep - the low site coverage has often been over looked My nearest Tesco (Colney Hatch Lane) is in a c7-8 acre absolute prime London last mile logistics site with huge resi alternative use values

[williamcooper104] 08/11/2024 15:49

Most infra assets are wasting assets - eg fixed life projects and with renewables while the assets might be extended often the lands rented. There's likely some residual value in the grid connection But they're priced as wasting assets, whereas commercial property rarely is - capitalising head line rents to perpetuity is still the way its done (or at best headline with some allowance for maintenance capex)

[nexusltd] 08/11/2024 15:31

@ mindthestash #2324. Thank you. How is a site with a number of "sheds" e.g. multi-let industrial, or retail park treated?

From past experience I believe that each individual lease separately considered. Is this correct?

[mindthestash] 08/11/2024 15:10

A simple guide (ideal for me) on labours business rate thinking and some of the next steps.

I think it looks like big sheds by rateable value will pay more even if they are retail or indeed hospitality sheds (to the extent latter exits).

hxxps://www.mills-reeve.com/publications/autumn-budget-2024-business-rates/

[jbarcroftr] 08/11/2024 14:10

From memory John Riblatt was keen on buying Supermarkets back in the 80 s
25 year fri leases at 6% plus initial income
When asked what would happen at the end of the lease he just said I will have a fully serviced 8 acre sites

[spectoacc] 08/11/2024 13:44

Personally I see most of the renewables ITs as little more than annuities - they hold wasting assets, and their business model was to continually issue new shares at a premium to buy more, & extend out their finite lives indefinitely.

That's now over, so you're buying into an income stream of an asset that will eventually be worth zero (some dispute this).

In fairness, the few paying very well-covered dividends do have retained earnings to refresh the asset base. But as you say, when the earnings are beyond holding co level, it isn't always easy to tell.

But - how much of the above is now in the prices. Quite a bit, I reckon, in a way it wasn't before.

Rental property is also a wasting asset. Less so at SUPR (repairing/insuring; hopefully always in demand) but eg even the warehouse co's, if there's a recession & a spate of insolvencies, there's no dilaps.

Or looked at another way - first Retail, now Office. Rental property, renewables, & plenty more are wasting more than they're perpetual.

But everthing has a price.

[williamcooper104] 08/11/2024 13:11

Well they're not going to round down

[riskvsreward] 08/11/2024 12:59

I have small starting positions on most of your list and am hesitating about when and at what price to add on those positions. The questions that are hard to get an answer with some conviction is how reliable are those NAVs, and how sustainable are those great dividend yields. Remember dgi9 and grid used to claim high NAVs and paid big dividends. Luckily I have not bought either of those two.

[spectoacc] 08/11/2024 12:13

@nickrl - ASLI starting to look interesting again here. CLI may be tempting a few p lower, FGEN wrote off c.2.6% of NAV this am & is down 7.5%. FSFL/BSIF/NESF all on tempting yields/discounts, TRIG too, which I think of as better quality (rightly or wrongly).

There's obviously a theme with all the later ones, & not lost on me that the world may be changing & hence cheap for a reason. But I don't think it'll change many business models here. Climate change isn't going to go away.

Perhaps SEIT, GCP on the list too. GSF if feeling brave (everything has a price). Could get a blended 10%+, with divi growth, and a lot of asset backing, with a selection of the above.

Mind you - DGI9 shareholders (of which I'm one) thought that once.

If the world is changing in terms of future interest rates, everything with debt to roll is going to have to re-rate (AGR worth a mention, at lows).

[nickrl] 08/11/2024 12:10

@specto where you seeing better opportunities?

[spectoacc] 08/11/2024 11:40

Whatever rates reform arrives will surely raise more revenue net.

Still like/hold SUPR but there's a lot of Opportunity Cost out there.

[mindthestash] 08/11/2024 10:54

This looks as stable a property bet as any. Getting near to 9% yield with gilts half that. Haven't checked corporate bond of occupiers but will do so. Maybe rent increases dampened by recent events but compensated by yield.

Labours Rate review and defenses thereof in leases will be my next job. Can't see them deciding a landlord should escape a tax opportunity for them. Where the axe will fall? Small high street or large sheds
How much discretion left to local government (disaster) and how much centrally directed?
On the plus side it might be nobody in gov has the slightest clue what rate reform looks like?

[1knocker] 08/11/2024 10:52

Harris was utterly vacuous. Asked any question, she had no answers, just cackled and tried to talk about Trump.

Also, like the man or not, Trump has some remarkable qualities. 4 years of attacks on him through the Courts in numerous simultaneous claims and prosecutions, funded by the limitless budget of the nation and many states in an attempt to ruin him, his businesses and his family and to imprison him, would have broken just about anyone else. Even in his late 70s he had the guts, energy, stamina and resilience not only to survive that but to run an election campaign (during which he survived an assassination attempt by a miracle and a few millimetres). US election campaigns are incredibly gruelling at the best of times, and he had the additional problem that the Harris campaign had vastly more funds.

With Trump, it pays to look at what he does, not what he says. A lot of what he says sounds pretty stupid, but is 'I will end the Ukrainian war in 48 hours' really any more unrealistic (or untruthful) than saying that a host of spending commitments are 'fully costed and funded' without additional borrowing or tax increases? Or any more dishonest than declaring that you will restore integrity to politics while wearing a suit and glasses ('transparently' declared as 'office support') gifted by a rich mate to whom you are planning to grant an all hours Downing Street pass?

And if Trump has a wandering eye and hand, don't we have a PM whose wife can't trust out of her sight? But a veil of silence has been drawn over the reason for that. Reprehensible and immoral, sure, but not relevant to whether either can do the job.

[laurence llewelyn binliner] 08/11/2024 10:34

#mwj1959, thanks, that was some of the info I was looking for.. :o)

2024 annual report - The company has a weighted average debt maturity of 4 years, a weighted average debt cost of 3.8%

So near term what is the likely impact to the interest costs as renewals flow through from 2026..? Gov 10 yr gilt rates are heading the wrong way currently at 4.5% and hurting the FTSE outlook..

[mwj1959] 08/11/2024 10:10

On the debt front (from the annual report) maturities are as follows:

FY26 £126m
FY27 £50m
FY28 £50m
FY29 £180m
FY30 £350m
FY32 £70m

So there is a re-financing required next year and it may be costlier than it was, but in the general scheme of things its not going to move the overall debt profile dramatically. What happens FY29 onwards is much more significant.

But clearly any uptick in yields is going to weigh on sentiment towards the company as it will with many other REITs.

[kimboy2] 08/11/2024 09:58

IIRC the debt falls in 2026 and I think they were paying 3.8%. Was it about £110m. Don't think any increase in interest rates would be material.

[ppceh] 07/11/2024 17:55

I’m told selling is at least in part because SUPR has a lot of cheap debt that falls due next year? The budget driven change in outlook is causing current sell off.

[cwa1] 07/11/2024 17:20

If you are referring to the normal, every day, UT then that is certainly NOT remarkable

[crumppot] 07/11/2024 17:10

Someone just purchased over 1m shares in the last hour!
Must have seen the director's purchase

[crumppot] 07/11/2024 16:49

Managed to add to our holding today below 70. These look underpriced.

[marktime1231] 07/11/2024 12:55

The Chair diving in at 69p is reassuring.

An interest rate cut as expected, never mind the cautious outlook that further cuts will be gradual.

Sainsburys confirming expansion plans despite the inflationary effect of higher NI, which the CEO says would cost in the order of £140M pa compared to sales volumes which are north of £32B and rising 4% pa.

All good.

[mister md] 07/11/2024 07:06

75k shares director purchase

[mindthestash] 06/11/2024 22:19

Worried more about property attibutal cost in the business rate tinkering and the landlords lease defensability from a revaluation surge in occupier cost.
I'm thinking staff costs are defensible or at worst rent damper but possibility of cost transfer to hated landlords might be an issue.
I need to educate myself DYOR but if anyone has quick summary I'd be pleased to hear it so I have a starting point.
Labour hates landlords