Tritax Big Box Reit Share Discussion Threads

[rik shaw] 20/10/2022 08:42

Ex-Div this morning for 1.675 pence per share

[nickrl] 11/10/2022 10:55

So given they have some locked in contractual rent increases coming down the pipe plus new developments lettings it ought to make 7p here for FY so a forecast 5.5% yield on today share price They are reasonably well protected on borrowings for many years with only the RCF being used for development projects due late 2024 on the horizon so no interest rate threats to impair earnings. Estate is pretty high quality so no EPC issues to contend with to comply with the 2023 criteria so divi should be sustainable at these levels for a few years with small annual increase unless we have an economic collapse. However, its inevitable that NAV will get reduced but has the share price discounted that? Until we know where rates trajectory is headed im wanting 6% as minimum and covered by cash earnings.

[scruff1] 11/10/2022 09:24

An increase on last year then

[sleepy] 05/10/2022 15:35

Who’s going to pay the rent?

[williamcooper104] 05/10/2022 13:32

Wouldn't worry about that - that's Aberdeen/Tritex (the fund/asset manager) not bbox

[bodgeman] 05/10/2022 13:04

Hope bbox dont continue with the 1.7bn venture to build the british volt factory. It's such a shame that british volt seems to be managed by the chuckle brothers while many other countries are building or have built their battery capabilities. UK last again.

[williamcooper104] 05/10/2022 12:48

Stifel analyst, Alan Carter: "it's a finger-in-the-air guess as to whether yields rise by anywhere between 50bps and 300bps, the former of which would be containable, the latter catastrophic. Neither I nor anyone else has a clue on that outcome."BBOX is pricing in (last I looked; and don't assume my quick on the fly maths are right) about half of that at c180bps movement Long real rates; while very volatile are around 200bps out Points to BBOX not being cheap but being around anyone's best estimate of fair value

[horndean eagle] 04/10/2022 21:46

There is rental growth within the portfolio to factor in and they were also valued off a higher yield. They have developments coming on stream in coming years which should generate 6-8% yields. Vacancy rates exceptionally low in the space and higher rates will put off new developments. Prime west end london property is still selling at sub 4% yields (GPE disposal today).

[williamcooper104] 04/10/2022 12:51

At lead 100bps It's going to be volatile with the 14th October Perhaps a market to average into

[al101uk] 04/10/2022 11:38

Thanks Williamcooper104,

I think waiting for interest rates to settle is likely the best way to play it for now. It doesn't look likely there will be an interest rate cut in the next few months and bond volatility looks here to stay for a while.

Predictions of a 1% hike in rates at the next BOE meeting.

[williamcooper104] 04/10/2022 10:28

Forget about NAV (it's out of date) It's about 5.5 percent FFO yield (eg divi yield divided by 1.11 divi cover) If we think long gilts settle around 4 Then 5.5 (with underlying property yields of about 5 with 3 percent rental/CPI growth) looks pretty reasonable Plus as you say; there's the massive land bank That suggests that current share price looks like the right NAV

[al101uk] 04/10/2022 10:18

I like BBOX and it's strategy, but I can't get my head around how commercial property can be valued at £6 billion when at that level it generates such a tiny yield.

Net tangibles of 218p per share, but at that price and paying 90% it only yields 3%. 10 yr gilts pay more than that!

Even at the current price it yields under 5% in an environment where it seems all but certain interest rates will rise further.

Are people banking on long term rental income increasing, development projects or high interest rates being short term?

I like the busiuness, I'm just not seeing the value.

[williamcooper104] 27/9/2022 16:54

It is 30 year gilt at 4.7 Gilt yields > Italy and Greece I did think yields would go out Didn't factor in a fiscal event though Long long term of course higher yields means higher returns Short term - balance sheet is key

[rathlindri] 27/9/2022 16:37

This is a grim picture!

[williamcooper104] 25/9/2022 11:33

Doh - sorry - school boy error - confused div cover with div payout ratio You're right; it's 90 percent or 1.11x covered which is indeed the standard minimum (though can usually in practise get it lower if need be with capital allowances) So yep divi looks safe; there will be considerable rental growth by the time material amounts of debt are refinanced So it's a 5.3 property value, the development upside at £150m and a dividend that's pretty secure Only problem is of course our KamiKazi government; so who knows where share price could go on short term

[feddie] 25/9/2022 10:05

The dividend is well covered. The 90% is the payout, not the coverage. In the last accounts they show earnings of 3.73p vs. dividend of 3.35p per share, so the dividend is perfectly covered with earnings. REITs are required to distribute 90% of their tax-exempt profits.

[skinny] 24/9/2022 17:47

Amazing how these have been smashed.

I've been holding since December 2013 - lowest price paid 82.85p in March 2020, highest sale 243.05p in February this year.

I'll continue to hold and may even add again if they go much lower - high calibre customer list and proven track record (for me).

[williamcooper104] 24/9/2022 16:26

As probably the lowest yielding property makes sense though that bbox would take more of a bettering from gilt yields moving out

[williamcooper104] 24/9/2022 16:25

All getting battered; though bbox did start to sell of earlier - especially on the fiscal event

[scruff1] 24/9/2022 16:00

Unless you know of them William BBOX seems to be getting clattered a lot worse than other REITs (not that any are unscathed of course)

[williamcooper104] 24/9/2022 13:39

At current share price I'm getting an implied yield on the properties of 5.3 percent Divi coverage at 90 percent looks like it gets to being covered from near term reversion/asset management (though barely) No meaningful debt maturities until Dec 2026 So unlikely the divi gets cut unless by Dec 2026 rates are much higher Ave cost of debt is 2.5 percent - which is likely to rise to c5 percent long term Much better than EBOX which starts at a 72 percent divi cover

[williamcooper104] 23/9/2022 12:26

Yeah well that fiscal event went well :)