Tritax Eurobox Share Discussion Threads

[riverman77] 13/2/2024 14:51

Rates selling off again and all REITs down heavily again. Decided to bite the bullet here and switch into API to get cheap expsore to CREI - EBOX looks very undervalued but see more immediate upside in CREI once merger goes through. Variety of factors likely to weigh on EBOX for time being - Germany, big costly refinancing in 2026, client concentration - but hope to buy back if it goes to 45p.

[hpcg] 13/2/2024 13:42

A slowing economy in Germany makes it more likely the ECB cuts its base rate sooner rather than later. Once again I think investors are acting in a contrary fashion, though selling today looks to be exchange rate motivated as the Euro issue is unchanged.

[skyship] 13/2/2024 08:29

EI/Rimau

This from 30 Nov'23

Sale of asset in Bochum, Germany for EUR46.8 million

Tritax EuroBox plc (the "Company"; tickers: EBOX (Sterling), BOXE (Euro)) has successfully exchanged contracts for the sale of its multi-unit warehouse in Bochum, Germany for a price of EUR46.8 million to a leading pan-European real estate investment manager. The sale price is marginally below the valuation as at 31(st) March 2023.

Summary

-- 37,047 sqm building, purchased in November 2018 for consideration of EUR37.8 million.
-- A recently signed new lease in unit 3 was agreed 35% above the unit's current passing rent.
-- The headline sale price of EUR46.8 million is 3% below the external valuation as at 31(st) March 2023, reflecting a net initial yield of 4.88%.

-- Proceeds will be primarily used to pay down the Revolving Credit Facility as part of the programme to reduce the leverage in the Company.

Background

The 37,047 sqm prime logistics property in Bochum, Germany was acquired by the Company in November 2018. In August 2023, we announced the agreement of a new seven-year lease with LUCHS Gmbh at a level 35% above the current passing rent. The business plan for the asset has been completed, including a 23% increase in overall rent since acquisition. The sale enables the Company to realise a profitable disposal.

In the Interim Results announcement in May 2023, we outlined our intention to undertake asset disposals of at least EUR150 million over a 12-18-month period. The programme's aim is to lower the loan to value (LTV) ratio towards our preferred percentage range in the low 40s and to fund existing opportunities from within the portfolio. Following the sale of Hammersbach in the summer, this disposal demonstrates further progress of this programme and brings gross sales signed so far to c.EUR111 million.

Company commentary

Alina Iorgulescu, Investment Director, Tritax EuroBox plc, commented:

"The sale of Bochum is the second asset sold from our German portfolio following the completion of the asset management plan. The transaction continues the progress of the disposal programme outlined in our interim results and is aligned with our strategy of recycling capital to reduce leverage and fund higher-returning portfolio opportunities. The sale to a leading pan-European real estate investor, at a level close to valuation, highlights the liquidity of the properties in our portfolio, and evidences the continued investor interest in high-quality logistics assets. Further disposals have been identified and we remain confident of achieving our target loan to value percentage of low 40s over the next 6 to 12 months."

[rimau1] 12/2/2024 22:29

I flagged this in post 1275 but LT holders didn't see German implosion as a big issue. Share price suggests otherwise. Not a holder for this reason, like the sector but not the country risk at present although could be in the price already

[skyship] 12/2/2024 14:06

Tritax management fees: 1.0% (reduced from 1.15% in 2022)

Everything else II are waffling on about are transaction costs - common to all REITs

[elsa7878] 12/2/2024 11:49

FWIW from II.

Tritax EuroBox Euro Ord] [Tritax]
[ISIN: GB00BG382L74]


Investment: £10,000

Cost category
Our Costs (Standard commission rate 0.06 Foreign Exchange (FX) 1.5 Government Charges 0.5) 2.06%
Product Costs (Product costs taken directly from your investment by the manufacturer) 3.48%
Total 5.54%

Product charges are.
Costs that the manufacturer take each year for managing your investments
2.84%
Costs incurred by the manufacture buying and selling underlying investments
0.64%

[skyship] 12/2/2024 10:28

elsa - those fees you quote are totally wrong. As ever, likely to be HL misinformation based on KIDs absurdities!

[hpcg] 12/2/2024 10:22

elsa - I don't know where you get those fees from. I don't have an account with II, but I do hold the GBP issue with HL, IG and Barclays and am always perplexed when people say they can't buy like they would any other trust.

[elsa7878] 12/2/2024 09:38

Thanks and the fees? Over 5% in year one and ongoing charges of over 3% per annum?

Certainly does diminish the yield attraction...

[essentialinvestor] 12/2/2024 09:14

Tbf there is usually a wait for ii to answer.

Same with CREI, does not let me buy unless I speak to someone - KID issue apparently.

[hpcg] 12/2/2024 09:10

elsa - the currency risk is identical whichever issue you buy. Everything the company does is denominated in Euros.

[essentialinvestor] 12/2/2024 09:09

Yes there is, unless I've imagined buying them.

By telephone.

[elsa7878] 12/2/2024 08:54

* you can buy either through ii.
Ebox by telephone (at web rates).
Type Tritax in to the search feature and BOXE should come up - but you will pay a hefty FX % spread unless you hold cash in € already.


On II I have to buy BOXE there is no option to buy EBOX. So immediately taking some currency risk. Also for a £10k investment they say that in year 1 the charges would be over 5%. Is that correct? Thanks

[skyship] 10/2/2024 09:27

A spinning-top candle denotes indecision; often indicates a change of direction from recent trend. Better green than red, but I'll accept anything that might be positive!


free stock charts from uk.advfn.com

[chucko1] 09/2/2024 12:58

What is becoming clearer is that open ended European focused RE funds are having liquidity issues. We have seen this movie before and it always ends up with a bifurcation of losers and long term decent returns if you avoid the obvious traps.

I see EBOX ending up squarely in the latter category. Rough ride along the way in the near term, as we are now experiencing.

Note the price to book ration of PBB is paltry 0.2x - this is a bank which, as part of the old DePfa/HPFB merger previously got into trouble in its real estate lending. I know this bank inside out, and they had a policy of lending to strong countries' (i.e. UK/EU/US) RE sectors. Mad, mad, mad, mad, mad. All the people there are the same as in the 2008/9 fiasco.

RE is fine as long as risk management is good. That is what to look for.

[hpcg] 09/2/2024 12:23

Pyufak - I disagree with your macro commentary. The US economy is doing fine, UK and Europe not so. Both central banks are waiting to be clear that inflation is under control before cutting. The ECB can never be seen to be keen to cut rates, but nor is it the Bundesbank any longer.

I also disagree about CTP vs EBOX. CTP has enormous development risk and its LTV is already circa 200bps worse and going in the wrong direction. It has the advantage of size and diversification. I don't know if the industrial component makes it better or worse. EBOX has levers to reduce interest, for example it could make the bond secured rather than unsecured as now.

I was being sarcastic about the over-subscription on the CTP bond, I should have made that clear. At least there was decent demand.

[essentialinvestor] 09/2/2024 11:59

Subjective may be, but thought the FY conference call very clear on prioritising disposals.

Bought a small amount this week under 48.7.

[chucko1] 09/2/2024 11:38

Pyufak, what is your evidence for the comment "I believe management are under appreciative of tails risk". Have they made comments that support this position?

In fact, too much talk and declaring their hand could adversely affect their various negotiations.

Do you expect a running commentary to suit your individual risk tolerance?

[riverman77] 09/2/2024 11:00

I think the point is that EBOX are not going to have to do a fire sale of assets or do an emergency fund raise as you seem to be suggesting is possible. Now all this could change if we see another big sell off in property markets, but would have to be quite extreme - LTV would need to go to 65% before they are breaching covenants so we're talking significant further falls in property values.

[elsa7878] 09/2/2024 10:35

Excellent highly informative exchange of views on here. If only there were a few more threads like this on Advfn.

[pyufak] 09/2/2024 10:27

it isn't 'complete panic talk' and I do not appreciate the label; I have a significant holding of EBOX and as I stated in my first post decided to stick with it. In a cordial and polite exchange of views it is fine to agreeably disagree. I believe management are under appreciative of tails risk; you do not. If you consider alternative views to your own or the consensus bullishness here as panicking then I am happy to leave you in an echo chamber of bulls.

[riverman77] 09/2/2024 10:14

When I say interest rates I really mean market interest rates not the policy rate, and my expectation is for corporate bond yields to fall sightly over the next year or so, which should be good for EBOX. However, EBOX are not reliant on this and could still comfortably refinance at current market rates.

Complete panic talk from Pyufak - EBOX are not financially distressed and in a worst case scenario may have to rebase dividend (eg 20% cut which arguably already priced in and would still give a 7% yield). The commercial property funds you mention may need to sell physical properties to meet redemptions - they're not going to be selling EBOX! EBOX is a closed ended fund so will never be a forced seller. Obviously all this could change if interest rates shoot up much higher to say 6%, but as it stands and with inflation coming down there's absolutely no reason to expect this.

[pyufak] 09/2/2024 09:41

okay, I have more than made my point the past two days. Summary, since the Oct lows risk assets have rallied hard and funding rates have dropped dramatically. I agree with the commentary here there's a path for EBOX management here to secure a reasonable rebased dividend but I have at length highlighted if you passively 'hope' rather than take action we risk running into a mess and my patience is wearing thin ... as it seems by the share price is that of a lot of other investors.

I read on bloomberg terminal an article just launched - 1bn pulled from European commerical property funds in Jan; some funds considering gating. This could mean they have to sell what is liquid which would be things like EBOX. This is exactly the sort of mess I am talking about if we have to sell assets or refinance if it gathers pace... and i know not all commercial property is equal but in a panic people throw out the good with the bad

[pyufak] 09/2/2024 09:31

'hopefully interest rates have come down' ... markets are already priced for 200bp of interest rate cuts from the European central bank. This is what matters, and if the expectations that the ECB will deliver more or less than this amount of cuts. Currently the ECB are pushing back against market pricing for cuts (as are the Fed and BoE) due to continuing strong economic data. Inflation may be coming lower but the economy is not slowing as much as expect. If the market is wrong on that 200bp of cuts expectation, and management take no action near term to lock in financing rates, then we could have a problem