Supermarket Income Reit Share Discussion Threads

[hugepants] 20/11/2024 11:25

Ok yield isn't everything but still, makes you wonder why Blackrock are selling this down on a 9% yield. Maybe riskier than it looks.

[woodhawk] 20/11/2024 11:07

Anyone who has SUPR shares with IG Index might want to check their accounts. The recent dividend payment to my SIPP account is approx 20% short. I (and I'm told others) have queried this with IG who blame a third party. However their own accounting is wrong as my statement from them (the product of shares held x 1.53p) is incorrect. I find this quite worrying - that IG's accounting is misleading and the mistake not easy noticed. They have still not resolved the issue five days after I notified them.

[chucko1] 20/11/2024 11:01

8gggg, you have ignored just about everything the Board announcement said, and what was apparent from the initial Carrefour purchase.

The Carrefour purchase was at a yield spread superior to what was readily available in the UK.

Capital would possibly be available for expansion into Europe via capital recycling.

The comment about only having a small footprint (currently) in Europe is absurd - there is a clear intention to scale up this new geography.

As I have argued previously, EU purchases may be less risky owing to the likely increased stability in refinancing rates, with the tenant risk on a par with Sainsbury (as evidenced/suggested via current CDS rates)

On the issue of the non-purchase of the ASDA store, as I have also argued previously, let management make such decisions and if they are as blindsided or "asset-ignorant" as you are (merely) guessing they are, why are you invested at all?

It is likely that the better route is to make selective purchases as and when they become available (and may be the only feasible route), and maintain the exacting property attributes they believe are necessary. Far better to take a year longer building the preferred portfolio than regretting a given purchase for the length of the remaining lease! In fact, the argument is not even a close one as so amply evidenced by AEWU and the continual moaning about them waiting to reinvest.

[8gggggggg] 20/11/2024 09:55

My point is that ....1. The existing investment is so small it will have no effect on PandL and divi.2 An investment of £250m is required to make a significant difference.3 There is snowballs chance in....... to obtain bank loan at competitive price to finance this madness buying spree.3A. .., Board have ruled out my suggestion to raise equity.4. So it will not happen , and the existing investment will absorb valuable management time.5 Please concentrate on UK, already the Board attention lapsing as they failed to acquire the ASDA store that Metro sold last week.A wonderful investment that would have fitted our portfolio perfectly.BestDakas.

[m_kerr] 19/11/2024 19:32

My guess is that the seller of the acquired SBRY asset assume reversion at 20% below current levels, making it approx a 6% NIY.

[tonysss13] 19/11/2024 15:04

Blackrock been selling, below 5%

[laurence llewelyn binliner] 19/11/2024 13:41

Not invested here yet, but researching and getting close now, 6 pence income for 69 pence looks strong and sustainable, so the risk is will the share price soften more than 6 pence (or not) in the next 12 months..

19.08.2024 - 100% of drawn debt fixed or hedged at a weighted average finance cost of 3.8% including post balance sheet events. The company has a weighted average debt maturity of 4 years..

Next debt refinancing is 2026, so the likely cost impact from there out is higher..?, the derivative swap hedges have got the better of me so far.. :o)

To partially mitigate the interest rate risk that arises as a result of entering into the floating rate debt facilities referred to in note 19, the Group has entered into derivative interest rate swaps and caps.

[chucko1] 19/11/2024 12:36

Update: Tesco has a CDS spread of 48bps compared with Sainsbury at 68bps and Carrefour at 64bps.

By comparison, Metro is 107bps and Casino went up in smoke.

So SUPR are picking the clearly strongest name in France, currently. At that, a name no weaker than Sainsbury, according to current market levels. The market levels are a significantly better predictor of credit stress than those of ratings agencies.

[dartboard1] 19/11/2024 10:23

A bit rough saying they're not as financially sound. Lower operating margin but less net debt. Overall they're two companies that arnt going anywhere (ie nil bankruptcy risk) over the next 15-20 years.

[philby1] 19/11/2024 09:37

Supermarket Income REIT could be worth £1 a share - here's why

[chucko1] 18/11/2024 19:56

The thing about Carrefour, whether or not a decent store (in general), they are not as financially sound as Tesco. In fact, the French supermarkets are somewhat weak by comparison - or at least that was the situation when I last looked (a few years back).

But I really do not care as I would assert that this is an area which management (Green and Windsor) will be totally on top of - given that they used to try and trade these credit derivatives with me back in the day!! I have actually overseen loans made to (the corporations of) Metro, Auchan, Carrefour and two others that I now forget (Casino, I think was one), and hedged the basket with CDSs. It's a small world.

[nickrl] 18/11/2024 18:25

Prudential bought it back in 2013 so may have been a sale from M&G

[cyfran101] 18/11/2024 16:35

LondonMetric property sold today 73,000 sq ft large format Asda foodstore in Halesowen, for £28.0 million but not to us.

[ghhghh] 18/11/2024 16:33

Gross headline rent £35 per sq ft so high compared to rest of portfolio, hence yield

[marktime1231] 18/11/2024 12:27

I wonder which of SUPR's assets are the lesser performing ones which it says it is actively trying to recycle. Can't be easy to sell a property at a premium if you don't like it.

Buying 7.6% yield with debt costing 4% seems to make good sense. Presumably that debt cost is under pressure though. And I don't see what is wrong with a degree of European diversity if the deals are as good as the UK ones. Sticking with what you know is a fine strategy but having all your eggs in one basket is not.

[wskill] 18/11/2024 12:13

Pleased to see SUPR getting on with their knitting their yield of 8.7% is excellent well run in comparison to other high yielders.

[kenmitch] 18/11/2024 12:06

I agree with everything in your post chucko1. As those of us who have used them will know, there are some excellent supermarkets in Europe, including Carrefour. It looks a great move by SUPR.

[makinbuks] 18/11/2024 12:06

The acquisition announced today does look ideal. However, who is the seller and what is their motivation? why are they prepared to sell at NIY of 7.6% and what does that mean for the valuation of other holdings.

On the European front, I'm more inclined to agree with chuck than Dakas but I did think Tritax Eurobox was a no brainer following UK success and I was completely wrong

[chucko1] 18/11/2024 11:41

Could not disagree more - the EUR refinancings to come are likely to be less rocky than those denominated in GBP.

If you have insufficient belief in this management, then why invest? Management credentials is a large part of the value of any given REIT.

(as RGL amply demonstrates) (EPIC as well, to some degree).

Nevertheless, I sense that they see dividend cover hovering uncomfortably close to 1.0x, and so they are doing what is required to improve that position, including buying higher margin locations, whether in EU or UK, and driving costs to a minimum. Their comment this morning about rent increases covering higher likely refinancing costs is precisely what I expected them to focus on.

[8gggggggg] 18/11/2024 11:16

Too right,My suggestion will be to set up new fund SUPR.....Europe ....PlC.....and I wish them the best of luck .But it's not for me and a host of other shareholders, who were attracted by the clear vision.of the original concept.Google the latest acquisition, it's completely brilliant In Location .Petrol station ..Home deliveryEnormous car Park .Dakas

[cwa1] 18/11/2024 11:02

You won't be happy with this bit from today's announcement then?

· Following the initial investment into France earlier this year, and following recent engagement with shareholders, the Company will be seeking shareholder approval at its AGM to amend its investment objective and policy to provide greater flexibility to take advantage of appropriate earnings accretive acquisition opportunities in Europe. The Company intends to take an incremental approach to gradually increase its exposure to European assets.

[bondholder] 18/11/2024 10:58

Another concern is the failure to disclose the current rental value of the site. How far is it over rented ? Surely that is a crucial piece of information.

[8gggggggg] 18/11/2024 10:25

Today they bought Sainsbury' store for 49£m one deal , fantastic site . If they leave after 11 years brilliant redevelopment site ,prime location direct off ring road.Why bother with all the Caarefour secondary stuff , which will be a time consuming nightmare to sort out.and same cash commitment.I will demand at AGM from whole board, why they veered off across channel.It makes no sense, terrible decision,Dakas.

[cwa1] 18/11/2024 08:08

For completeness...



Supermarket Inc REIT - Acquisition and update on strategic developments

[laurence llewelyn binliner] 18/11/2024 07:12

Another purchase RNS this morning, GBP47M Sainsbury site adding to the rental income to support progressive dividends..