Tritax Big Box Reit Share Discussion Threads

[lilly 01] 01/4/2020 14:17

Encouraging

[igoe104] 01/4/2020 12:21

Rupert Hargreaves: Tritax Big Box REIT
At this stage, it is impossible to tell which companies will survive the coronavirus outbreak. However, Tritax Big Box REIT (LSE: BBOX) looks better positioned than most.

As the outbreak has engulfed the global economy, the demand for online delivery services has exploded. Tritax owns an extensive portfolio of modern Big Box logistics assets, typically greater than 500,000 square feet, which are essential for companies’ online delivery infrastructure.

This suggests the business should be able to weather the storm. Management seems to agree. Over the past few weeks, executives have spent £500k increasing their holdings in the business.

With the stock now offering a yield of nearly 7%, it could be worth following these insider

[lilly 01] 31/3/2020 14:30

Thanks very much.

[skinny] 31/3/2020 14:15

The last disclosure (Reduction)was on the 20th :-

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Scroll down.

[lilly 01] 31/3/2020 14:02

Thanks, I couldn’t make out what it meant.

[8w] 31/3/2020 11:46

No disclosed shorts as far as I can see

[macc2] 31/3/2020 09:41

Am I reading the latest RNS correctly. Have Aviva lent some stock so that a short position can be opened?

[williamcooper104] 30/3/2020 04:43

Best thing they can do is as you say nurse it out, tread water - but also option up future development pipeline when markets are dislocated A small upfront cost in terms of fees for land options generates huge returns when markets normalise

[williamcooper104] 30/3/2020 04:40

In a normal market the premium to NAV rating needed to be sustained by development kicking off large earnings growth At the current share price if it can just keep earnings whole it will outperform the market Even in a credit crunch banks/funds will still lend (at a cost) - largely pre-let developments will be capable of being funded

[intelinvestor] 29/3/2020 17:39

'The reduction in NAV was due to an increase in the number of shares as a result of the equity raise and acquisition of Tritax Symmetry, analysts at Peel Hunt said.'

sharesholders value will keep getting eatten up if the company still persists on issuing more stock.


'We expect developments to be the main driver of earnings and NAV growth in the future and pre-lets are an essential part of this,” they added.'


How are they going to fund the developments?
Bbox debts have gone up
cash has come down

[cwa1] 27/3/2020 07:59

Nice to see the dividend nestling in the account first thing this morning. Long may it continue...

[warranty] 26/3/2020 22:28

Here we go, Next shutting down their on line operation due to CV-19 so pressure now being applied to others such as Amazon and M&S to shut down their warehouses too. Soon it will be only food retailers operating which must be a concern to BBOX revenues.

[spectoacc] 23/3/2020 15:39

@Porsche1945 - that was my initial thought, but then I remembered that it's not all about online delivery. Many are distribution hubs for a UK stores estate.

To have a big distribution centre, you've got to be a big co, but can you be sure there won't be company failures even at the top end, and requests to cease rental payments?

[porsche1945] 23/3/2020 15:35

I have a large investment in Tritax, I actually think it will come out of this stronger, everything is heading online. Hopefully Tritax will consolidate, no more share issues, no more developing, just nurse what they have until this storm clears, which it will. This is how you make money, real money, buying when things look bombed out. I never thought I would get the chance to buy into these at such a madly low price.

[bagsforlife] 20/3/2020 11:22

@muzmanoz I don't want to be a negative nancy but if any of Tritax's tenants pull the trigger on using CVAs to stay afloat and pay their rent to Tritax then that will still be a negative. When these assets are valued the covenant strength of the tenant is a big factor affecting the yield applied to the rent. Tritax's model is very low tenant risk. The use of CVA will see the tenant risk factor increase, which in turn will see the yield increase when the Tritax books are valued. A higher yield applied to the same rent gives a smaller asset valuation. Hence my view that NAVs will drop at the next update.

But we are up 15% on the day fellas. So I have a smile on my face.

[lilly 01] 20/3/2020 09:37

Admire the quality of the posts which is refreshing.

[muzmanoz] 20/3/2020 09:07

If things get so bad that major retailers look likely to fail, despite bank and government support, I can see cvas or administrations being used to shed poor performing physical stores or onerous leases but looking to keep the online functions. That's where the growth is.

[spectoacc] 20/3/2020 09:05

I'd worry about shops/retail/retail parks for that reason. Much less for Big Box. Saying that, I've taken profit on 2/3rds of what I bought. Trying to run the rest.

[bagsforlife] 20/3/2020 08:38

@deanowls don't really agree with your first statement. The warehouses are fit out to work for specific occupiers but one of the reasons BBOX is a good investment is because they are great sheds in great locations that would work for many different tenants in the market. Which is a positive to keep in mind if things do turn sour and we end up with vacant buildings.

Regarding your second point, I agree somewhat. I am not worried about tenants making an orderly exit from these assets by triggering break options. What I am worried about is a disorderly exit i.e. tenants unable to keep up with the rental obligations, which may result in lease forfeiture.

[deanowls] 20/3/2020 03:30

These warehouses are usually tailor made and pick for location in their overall strategy. They have massive bits of kit in and are surrounded by their workers. There is a massive amount to do to move operations and those current customers would be subject to break clauses. Very difficult to just walk away. These are not sheds with a bit of racking up. Read the next update, very calming and informative. If anything it talks of pushing more online.

[bagsforlife] 19/3/2020 23:45

@intelinvestor if we end up in a market where companies are failing and other tenants are "picking up the pieces" of what's left then that will be the absolute worst case scenario. Those resilient tenants that are left will be able to drive a much harder bargain due to increased availability, so we will see rent frees and void periods increasing (read Tritax receiving less rent). This will also lead to the valuations softening and therefore a diminishing NAV.

So let's hope we don't go down that road eh!

[intelinvestor] 19/3/2020 23:38

even if some do fail, other companies will pick up the peaces later when it all flat lines.

My main concern is the amount of shares in issue now than in 2015, and if this continues it is not in hand nor in the shareholders interests.

[bagsforlife] 19/3/2020 22:48

@deanowls good question. Probably those most at risk are brick and mortar retailers, who I expect to see less physical footfall over the course of the pandemic.

Looking through their tenant lineup, I think you would include Next, Argos, B&Q, New Look, Dunelm, TK Maxx, Matalan and DSG Retail as those that are likely to be impacted. But I don't have a scoobies about how resilient any of those entities are to the current climate.

Without diving into the books, my only proxy for tenant's performance is the share price. Next shares are down about 40% since mid Feb. Kingfisher (parent co of B&Q) have moved by a very similar margin. Dunelm share price is looking a bit more volatile. They hit a big peak in mid-Feb too and are down about 53% if you take the high point. TJX down about a third since mid-Feb.

Counter argument would be that these retail shares are perhaps oversold. I'm not a retail expert. But I'm sure bad news for any of these tenants will flow through to the BBOX share price. Albeit there is a good level of tenant diversification in the portfolio.

[deanowls] 19/3/2020 16:06

Which of their customers do you expect to go bust? Being a horrid thinking scenario and a million people died which it will be nowhere near that figure. There’s still 60 odd million people that require goods and services and if they don’t money will not matter.