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To provide its shareholders with an attractive level of income together with the potential for capital growth by investing in a diversified portfolio of supermarket real estate assets in the UK.
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Hi CSDI, sorry for late reply, i have no doubt that RDSB will go back to £20 within the next 12 months.
If you are in a SIPP structure your options are quite limited for going short but i think you can still buy Short reverse ETFs on Tesla. I went short by buying put warrants but there are other means, such as going short via CFD and buying puts.
There are some very decent high quality shares on the continent but the main issue i have is that many dont offer dividend reinvestment plan like most do in the UK.
Hello FBT,
Cor blimey you've done well with RDSB. I got stuck with a 2018 purchase at £27, when went 50/50 with BP. Was happy with divi at $1.88 but got burnt wit the big cut. I've bought some more RDSB on the way down and sold some recently at 1429p that were bough at 1155p. I've got a couple of batches at 1330p approx but still got the stinker on hold. The divi is lower than I want and was thinking of swapping for BP to get the extra div. But it is not worth the risk as RDSB could easily make up more than 2-3% difference thru its SP. With 10% of my p/f in RDSB that's fair enough for me.
My funds are all in SIPP, so don;t think i can short Tesla. I have today bought SUK2 to short the FTSE and nearly went for S&P500 short. Only expect to hold for few days, and it is only 4% of p/f. Can't see point in chopping and changing everything with about 80% of p/f in high yield shares.
Would be interested to know how you short Tesla .
My shares are all UK focused and maybe need to learn to look wider-a-field
Cheers and good luck
Hi CSDI,
I got in today at 1.08, after having followed the SP for several months. My aim is to top up the position over time and hold it for life as it is one of the very shares that has an almost recession proof business model IMO. I am also holder of RDSB (average price of £10, manage to buy a tranche at £8.60), GSK, MNG, Bayer, Danone and Enagas.
I have some growth stocks that have given me more than +100% returns (lemonade, palantir) but i dont sleep well with these stocks and only buy growth stocks in order to grow my asset base and then buy high divvy stocks. Im also a holder of VLS and im short Tesla.
Good luck!
Hi All
A happy and prosperous new year to all posters and holders of SUPR.
I must warn you all that I have joined the rank of SUPR investors on Wednesday.
I have invested a small sum of 6.5% of my SIPP, as an income seeker (to replace higher yielding NCYF which is expecting a divi cut at some point this year according to its Manager "Franco")
I jumped on when the price was 106.6p. My aim is to achieve an income around 5.5% p.a with a view to LTH.
If NCYF SP drops sufficiently for my recent 51p sale price, then I may be tempted to return there if the divi yield is well above this one.
For those that do not know me, my name is CSDI - Crap Share Dealing Ideas.
I have a very bad relationship with shares due to the CSDI curse, which is due to "my natural ability to buy shares just as they drop like a stone, as well pressing the "sell" button just before they take off."
Good luck all - you have been warned
Cheers - CSDI (smiley face)
Quite....this is not a share I'm intending to trade, but the offer seemed an open invitation to do so.
A safe divi yield make this a core holding for me, and I don't lose sleep if it falls below the offer price. Just a bit surprised that with such a safe divi ir slipped, I expected a bounce back to c. 110 by now.
I’m a net buyer of SUPR for the next 10 years so I’m happy to snap up a 5.6%+ dividend yield if the market continues to value at these levels. Pleased to see the scrip dividend being voted through at the AGM yesterday - even cheaper to reinvest dividends!
Well, glad I sold at 108 and bought back in the offer, but can't believe we've now slipped below that price.
Well, that's useful to know. HL show my requested allocation in my account and have taken payment, but they are only shown as allocated and not live. And no statement frm SUPR either about it as far as I can see.
I expected a RNS today confirming both the allocations, and admission to trading.
Hi Genghis - does seemed to have worked - I did the same, selling (just after ex divi) and offering to buy back cheaper.
I was worried about dilution but have got them all back + a few extra with the profits.
Only a few pounds, but useful crumbs for the small guys...!!
I don't know if they did this on purpose to raise more shares, but it seems to have worked with the oversubscription.
I sold most of my holding hoping to get back in at the placing price.
Will have to see how that works out, hopefully not too much scaling down.
Looks like LTH’s got the heads up Thursday.
Investor call at 8.30am on Thursday
Looked good to me too. Have nt seen the investor call this am but hopefully I can catch up later.
https://www.londonstockexchange.com/news-article/SUPR/acquisition-of-a-tesco-supermarket-and-updated-kid/14684041
Great to see the final capital deployment of the money raised earlier in the year, taking the LTV back to c.40%. The 5.7% NIY must reflect a slightly aging building but in a good location and with 10 years still on the lease. Financed at 3m LIBOR plus 1.75% creates a lot of cash on cash and ensures geared RPI for shareholders. Great place for a lower-risk segment of the portfolio. I have topped up further this morning.
Sainsbury’s reported to be undertaking a strategic review of their JV with Aviva and the SUPR JV with BA:
“Separately, Sainsbury’s is carrying out a review of whether to sell a £1bn portfolio of 26 of its stores, owned jointly by the supermarket giant alongside Aviva Investors, Supermarket Income REIT and British Airways Pension Trustees.”
Suggests great positioning from SUPR for asset value increase on share of JV, upward reset of rents and direct asset purchases with BA in due course.
Thanks very much for the replies. I know I was being over simplistic but IO was doing so to get the kind of informative replies which you gave. In the short term I'm not too worried about inflation - high unemployment seldom produces high inflation; and we're likely to have that for some time. Besides are really high inflation rates a thing of the past in this country? They've been low for a very long time. Maybe 3% is high inflation!
@Genghis15: the 40% loan to value (not equity; that equates to 66.6% loan to equity) is SUPR’s own debt target for the amount of gearing they expect to have on the portfolio. The debt raise announced alongside this acquisition is commensurate with this.
You are right that if inflation were to take off there would be a risk of under-renting for the remaining term of the lease before you can re-lease. Obviously this is not a term they negotiated from Morrison’s (they bought the portfolio with the lease in situ from Santander pension fund) and on many of their other leases there’s a 5% cap, but having some cap would be a standard term. Ultimately the risk is priced into the 5% yield which, in my view, more than compensates for the inflation risk, given the huge spread over the comparable supermarket bond yields. Gearing the portfolio at 40% provides additional protection as it passes on some of the inflation risk to the lenders at very low interest rate, without adding too much debt risk. My view of course. DYOR
Given no new equity has been raised specifically for this deal, I'm not sure where your 40% loan to equity comes from?
They are taking on interest rate risk, and inflation risk. 3 month LIBOR can move fast, tho it's currently hard to see rates rising much, if at all.
But the inflation risk matters, imv ; sooner or later all this govt debt will have to be inflated away. wWy have they agreed to a 3% cap? That would be a deal breaker for me, and skews the benefit to Morrisons, who, like all supermarkets, will have no difficulty riding any inflation wave.
@Hardboy - they are not making 3% on a deal. Say pay 100 for a building, they borrow 40 and use equity for the other 60 (ie they are targeting 40% LTV). They earn 5 on the building each year (5% NIY). That means they pay 0.8 in interest cost (2% on the 40), leaving 4.2 on the 60 equity investment. That’s 7%. You’ll pay Atrato their management fee and some additional central cost but still leave plenty to cover the proportion of the dividend yield on a 90% payout basis. In addition the 5 of rent goes up by RPI each year (min 1%, max 3%) all of which goes to equity given the fixed debt cost. So you can add capital growth of 1.6% (1%/60%) to 5% (3%/60%) to your income yield for a total geared shareholder return assuming a stable yield of 8.6% to 12%. Not bad!
@Hardboy - these are FRI leases, so the tenant is fully responsible for the maintenance, upkeep and insuring of the buildings. They must return the site to SUPR effectively in its original condition. The spread over interest cost is one thing, the other important indicator of value is the spread over the tenant supermarkets bond yield. That is similarly high for what is a very similar credit risk. 5% NIY on Morrison’s credit feels like very good value and I expect the yield to tighten over the next year or so assuming interest rates remain as low as they are. Mid-4% seems more appropriate. That’s a lot of additional value for SUPR. The current 5.3% dividend yield is very attractive in my view. DYOR
Initially it sounds like good business - borrow at 2%, buy a property yielding 5% (today's acquisition.) But obviously there will be some on going maintenance and running costs to come out of that 3% differential. So if they are making less than 3% on a deal, how do they keep paying a 5% yield?
Q4 dividend as expected. Not 100% covered by earnings yet, so some ordinary dividend in there, but steady as she goes. Nice to see an RPI step up for the Q1 2021 dividend in September, when hopefully they will have delivered some more asset acquisitions and shown the full earnings of the new assets.