Tritax Big Box Reit Share Discussion Threads

[sebfletcherrice] 18/7/2023 07:40

Exactly right - overlooked by many

[williamcooper104] 05/7/2023 10:16

Nice 660k big box let to Bowden's for 20 years Sold for £85m - 4 percent yield Highly likely to be above book value And will get put back into ground at 6-8

[dhoult12] 09/6/2023 18:45

Personally I think this and SHED for medium term are a good shout. Of course if we have long term hyper(or v high inflation) you lose but same in cash or realistically most bonds

[igoe104] 09/6/2023 17:57

A bank account isn't 30 odd % below its nav, so lots of future potential upside..

[yump] 09/6/2023 17:13

The comparison with banks and fixed interest bonds depends on getting your timing right. When there’s a sign that interest rates have peaked, how long would there be to move fixed rate savings into high yielding stocks ?

If they jumped, you’d almost certainly lose out on an instant capital gain, unless you were running a lower rate instant access fixed rate account.

[williamcooper104] 09/6/2023 17:02

Firstly it's a 4.8 yield that's well covered with almost no interest rate/cut risk; unlike many indeed most other REITs Secondly a 4.8 yield means it can raise equity costing a divi yield of 4.8 and invest it at 6-8 development yield It's the largest land bank in the UK; so it can rinse and repeat that to more than double the size of the company You need to compare the 4.8 taking into account that it's rock solid and that total medium/long term returns are > 10 percent Relative to putting in a bank I bough some LAND bonds maturing next year at a 6.3 YTM (there's virtually no credit risk in those)

[feddie] 09/6/2023 15:16

A bank account balance does not have a capital gain upside.

[scruff1] 15/5/2023 10:01

A bit slow today Skinny !!

[williamcooper104] 24/4/2023 20:51

Ebox does benefit from having nearly half its rent roll on uncapped CPI But it's still vulnerable; whereas you really need to hugely stress things for BBOX to be cutting its dividend

[nickrl] 24/4/2023 19:14

EBOX RCF is EURIBOR 3mth + 1.2 to 1.7 depending on LTV but can't find specific terms but given they will have used 130m of the RCF by the time cap expires this debt will be 4.46 to 4.96 based on todays EURIBOR 3mth rate so will account for half the interest charge upon expiry of cap. Of course if ECB keep raising will become worse although EU inflation looks on abetter trajectory than the UK.

[hindsight] 24/4/2023 15:56

Skyship, 40% LTV figure I have on spreadsheet. Its just I dont want to hold large size in 40% LTVs. Like the gross divi on EBOX so different world for me than BBOX but 40% LTV stops it being a 10% limit holding

[williamcooper104] 24/4/2023 15:23

And it's 40 percent LTV now - it was 35 at last balance sheet date but they guided towards a normalised 40 once capex was spent

[williamcooper104] 24/4/2023 15:22

That's the maturity of eboxs loans but it's rate sensitivity is greater than that given that EUR 150m of caps expire in 6 months Not knocking EBOX

[skyship] 24/4/2023 15:12

hindsight - EBOX has a 35%LTV; however fixed at 1.46% for 4.5yrs. So what is the concern there?

For the debt position see 14:30mins in this Presentation:

[williamcooper104] 24/4/2023 14:05

A good shed is a 5 capThe implied yield on bbox is about 5.2 The development land bank has a yield on cost of 6-8 So it can double the size of the company by buying at a discount of c15-40 percent below market So there's no question there's considerable value in the land bank

[hindsight] 24/4/2023 13:35

Options are a subject I know something about and if the landowner had good advice these could be worthless (bar some time value) but thats maybe short, again depends on the option clauses. Albeit limited 3% GAV

But thats not the point im really trying to make. Its the assertion that BBOX is worth more (less yield) than EBOX as it has a land bank with future development value. If this is now at market or below I see no edge for BBOX over EBOX

If someone wishes to argue BBOX is worth more (lower yield) than EBOX because the LTV is much lower so less risky, then thats a very fair argument in my book and one that concerns me with EBOX

[williamcooper104] 24/4/2023 13:09

Will look back but I suspect what's been happening is that as assets are developed and thus reducing the value of land held for development that some uplifts have slipped in to keep the value at the original cost value, nothing sinister here so long as that value isn't less than the open market value of the land - which it won't be Just highlights how the NAV doesn't tell you the full story, but the incomplete story does mean there's very little room for land values to create an accounting loss

[dhoult12] 24/4/2023 12:29

Held at cost subject to impairment review is categorically not mark to market.

If the value materially falls from original purchase price then you get the same value. Anything above purchase price will not be recognised as held at cost.

Only m2m is on those with planning consent. Would be surprised if auditors allowed unless it had been given post year end.

But then auditors always surprise with their "professionalism"

[williamcooper104] 24/4/2023 12:06

Held at cost subject to impairment review and some upwards adjustment for receiving planning Still 3 percent of GAV - so very limited balance sheet risk

[hindsight] 24/4/2023 10:45

Reads to me they do mark to market

However clearly they have not priced in the cliff edge where they pay out all the exspenses and find the min price + thier costs on the option is well above open market value

Naturally this does depend on the quality of the advice the landowner(s) recieved


Embedded value within land options

Under IFRS, land options are recognised at cost and subject to impairment review. As at 31 December 2022, the Group's investment in land options totalled GBP157.4 million (31 December 2021: GBP201.5 million) with GBP57.1 million being transferred to investment property during the year as certain options were exercised.

As the land under option approaches the point of receiving planning consent, any associated risk should reduce and the fair value should increase. When calculating its EPRA NTA, the Group therefore makes a fair value mark-to-market adjustment for land options. At the period end, the fair value of land options was GBP20.4 million greater (31 December 2021: GBP66.0 million greater) than costs expended to date. This movement in the fair value of the land options in the year is due to the adverse market conditions; although this impact is significantly lower than would be experienced had we owned this land outright.