Tritax Eurobox Share Discussion Threads

[ghhghh] 17/4/2024 16:04

Why no director buying and what will Segro buy? SERE too small, ASLI or EBOX?

[essentialinvestor] 16/4/2024 15:20

Interesting price again?.

[chucko1] 03/4/2024 13:43

A marginal miss on dividend cover in the short term should be pretty irrelevant when viewed alongside (weighed against) the targeted 4% per annum rises over the coming years.

It's going to be tight, especially if rates fall only slowly. However, the discordant rates music from the US has, in my opinion, (overly?) overspilled somewhat into the EU and UK where the fundamentals of each economy appear to be in meaningfully different states.

[williamcooper104] 03/4/2024 10:21

Unsecured debt so long as you don't have a lot of structurally senior secured debt won't be more expensive than secured debt (it can be cheaper)

[hpcg] 03/4/2024 10:17

At 4.75%, where CTP refinanced earlier in the year (actually 4.8% as a bit sold a bit below par) interest on the green bond moves from €4.75mn to €23.75mn which would be uncomfortable to maintain the dividend in the short term. There is just €2.25mn between 4.3% and 4.75% , so a bit more wiggle room but not a dramatically different picture.

I would expect holding company level debt to be higher than the single property SERE refinanced. Also, key word, secured. Seen like a vast amount of work to slice the entire bond onto individual properties, especially if everything is for sale, as early payment fees would kick in. Perhaps they should be doing that on their key long term holds, but with just a delta of 2mn in interest PA, 10mn over 5 years cost might eat up a chunk of that.

Edit - SERE data is consistent with what we know already, not a meaningful improvement.

[williamcooper104] 03/4/2024 08:21

Last I looked with reversion I was getting to they could keep the divi at a 4.5 rate (even if perhaps slightly uncovered for a few years) However, as the manager has committed to the divi if they do axe it we will likely see a wind down - so then the discount to NAV comes into play - albeit the share price would still likely fall before you get to NAV

[riverman77] 03/4/2024 08:13

The 500m EBOX green bond which is due to refinance in the next year or so is on a very low rate (below 2%) - even if they refinance at 4.5% then this will still take out a big chunk of their earnings - we could easily see a third of their EPRA earnings wiped out, although this could be offset by rental reversion. I ran some calculations on this a few weeks ago and made me a bit more cautious on EBOX and explains why they are so sensitive to rates.

[skyship] 03/4/2024 08:04

Excellent refinancing news from SERE today. Direct read across to EBOX:

Schroder European Real Estate Investment Trust plc, the Company investing in European growth cities and regions, is pleased to announce that it has completed the refinancing of a €8.6 million loan with the existing lender Saar LB, secured against its Rennes logistics investment.

The new five year facility is based on a margin of 1.6%, a slight increase from the existing 1.4% margin and is due to expire on 26 March 2029. The total interest cost has been fixed at 4.3% being the five year euro swap rate (c. 2.7%) plus 1.6% margin...................

.................


Raphael Berdot, Lead Investment Manager for France at Schroder Real Estate Investment Management Limited, commented:

"The lending appetite for well located, institutional quality logistics remains strong. With competitive margins and swap rates falling, the overall debt cost remains accretive when compared to the current asset valuation yield of c.6%. The availability of debt on competitive terms gives support to current values and liquidity."

[riverman77] 02/4/2024 21:18

Bund yields risen a lot too - probably explains the fall. REITs with a lot of debt, especially those requiring financing in the next year or two, are going to be disproportionately hit when yields rise, since this will determine the interest rate they'll have to pay when they refinance. Could take a meaningful chunk out of their earnings. CLI in a similar situation.

[dlp6666] 02/4/2024 21:16

Yes, but 10 year rates in, e.g., France, Germany & Italy ALSO went up today (by about the same % as the UK ones).

[skyship] 02/4/2024 20:57

And those rates are UK rates - nothing to do with EBOX who are Euro-based!

[hindsight] 02/4/2024 20:03

10 year rates rose today, amazing how sensitive to interest rates either way this is when there are other factors

[nickrl] 02/4/2024 19:26

mkt convinced rates aren't going down anytime soon - thing is they aint going up either

[cwa1] 02/4/2024 17:42

Bit of a drift today :-(

[spectoacc] 20/3/2024 14:57

We keep hearing about PPI - UK especially - but services is where much of the inflation's coming from. The goods side - & things like hotels too - benefitting from lower power prices.

Or put another way - until the holidays/flights boom ends, is inflation beaten?

[williamcooper104] 20/3/2024 11:08

https://x.com/andreassteno/status/1770377548033069172?s=46

[hpcg] 15/3/2024 11:03

I'm out. That was a struggle, even with my holding. Predominantly I have better uses for the cash, but I can see this re-visiting the recent low with rate drops looking less likely if the ECB are just going to wait on the Fed.

[makinbuks] 04/3/2024 18:00

Perhaps EBOX should move its quote to Paris or Frankfurt then?

[hpcg] 02/3/2024 15:10

Their, Cromwell's, financials are a piece of work.

2H 2023 NPI was 5.3% lower than 2H 2022 mainly attributable to i) divestments in 2H 2022 and FY 2023; ii) loss of income from Maxima as mentioned above; iii) lower rental income due to the rent reduction by government decree for 8 Italian properties; and (iv) lower turnover rent received by Starhotels Grand Milan, Italy, partially offset by (i) one-off dilapidation income received for Maxima; (ii) new substantial lease in Haagse Poort (the Netherlands); (iii) outperformance of Business Garden (Poland); and (iv) higher income from annual inflation indexation and positive rent reversion across the portfolio.

And, in small text

Occupancy calculations exclude: (i) Nervesa 21 redevelopment; (ii) Maxima which is under strip out works; and (iii) Grójecka 5 which is not allowed to be leased.

Interest on loans is more up to current IR but not fully. I think distributable income will drop again in 2024, at least H1 so yield a bit lower than 15.8c. To be honest it needs a lot more than the 30 minutes I have spent to work out whether it is a decent investment. There are difficult to process risks like Italian government buildings.

[skyship] 02/3/2024 11:21

EBOX came back with another comparator European REIT:

Cromwell European REIT trades on the SGX at E1.43 v. NTA NAV of E2.12 - discount at 32.5%. Dividend of 15.7c provides an 11% yield.

[martincc] 29/2/2024 07:59

EBOX not dropping out of FTSE250 in March, was penciled in to go.

[flyer61] 28/2/2024 16:03

Excellent and useful post Sky, thanks.

[skyship] 28/2/2024 14:42

No. SGRO on c10% NAV discount whereas the Euro equivalents all trade at their NTA NAVs or above:

# Argan (argan.fr): Epra NTA E79.1; Sp E81.0. Yield 3.9%

# Montea: Epra NTA E74.4; Sp E76.5. Yield 4.3%

# VGP: NTA uncertain, but trading at a Premium. Yld 3.5%

Thnx to Charles Chalkly, the very helpul IR at EBOX, for providing names of Euro players.

All much larger than EBOX with MCaps of cE1.5bn.

But shows the absurdity of the UK-listed REIT valuations; especially EBOX. Let down in no uncertain terms by the UK investment managers.

[flyer61] 28/2/2024 09:48

SKY...is there anything else in the 'European' space they might be looking at?

I agree with you that this trust must be in their sights.