It might be good gains too over long term from here also … good luck!
From Twitter
This is interesting, may provide a gee up to #SUPR which owns lots of these type of properties.
SUPERMARKET INCOME REIT PLC
(the “Company”)
£170 MILLION DEBT REFINANCING UPDATE
Supermarket Income REIT plc (LSE: SUPR), the real estate investment trust providing secure, inflation-linked, long income from grocery property, announces the completion of a £170 million[1] refinancing through its first private placement debt issuance and a new unsecured bank facility.
€83 million private placement debt issue
The Company has signed and completed an agreement with a group of institutional investors for a private placement of €83 million of new senior unsecured notes (the “Notes”). The Notes have a maturity of seven years and a fixed rate coupon of 4.44%.
The Notes were priced on 11 July 2024 and the note purchase agreement was signed on 25 July 2024. Proceeds were received on 25 July and will be used to refinance euro drawings under an existing secured revolving credit facility with HSBC, which had been used to fund the recent acquisition of a portfolio of 17 stores from Carrefour.
£100 million debt refinancing
The Company has also refinanced its existing £97 million secured debt facility with Deka through a new £100 million unsecured debt facility with ING Bank N.V., London Branch (“ING”).
The new ING facility (the “Facility”) comprises a £75 million term loan and a £25 million revolving credit facility. The interest-only Facility has a maturity of three years and has two one-year extension options at the lender’s discretion. The Facility is priced at a margin of 1.55% over SONIA and benefits from forward starting hedges, which cap the interest rate at an all-in cost of 3.0% until January 2026.
Following the debt refinancing, the Company has a pro-forma LTV of 37%."
From RNS
What is very noticeable about the interest rate is just how low they are.
The fixed has a coupon of 4.4% for 7 years.
I struggle to believe that a RCF will be available at 4.4% in the next 3-5 years.
The RCF is SONIA plus 1.55% again the 1.55% is well below what I see elsewhere.
The reason is simple enough 100% rent collection. And clearly the lenders expect it to continue to receive 100% rent collection.
It’s also worth noting that the fall NAV (due to the rise in the discount rate) appears larger than other REITs.
So a good chance that the discount rate will fall significantly when interest rates fall?
Presently a 0.8% short on SUPR by JPMorgan.
That maybe holding it back but sentiment only.
My view is the risk/reward here is very good.
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SUPR
7 November 2024
Supermarket Income REIT PLC, announces that on 6 November 2024, Nick Hewson, Chair and Non-Executive Director of the Company acquired 75,000 Ordinary Shares in the Company (“Ordinary Shares”).
He now owns 1,405,609 Ordinary Shares in the Company.
“Following the above transfers of shares, Nick Hewson continues to hold 1,405,609 Ordinary Shares in the Company.”
Greedy!
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Directors purchases 20th and the 23rd December
https://www.lse.co.uk/rns/SUPR/
Purchase on the 20th
Supermarket Income REIT PLC, announces that on 19 December 2024, that Passaic Services Limited, a PCA of Benedict Green acquired 112,621 Ordinary Shares in the Company
Following the above acquisition of shares, Benedict Green holds 1,286,422 Ordinary Shares in the Company and persons closely associated with Benedict Green hold 1,501,740 Ordinary Shares in the Company. Together, Benedict Green and closely associated persons now hold a total of 2,788,162 Ordinary Shares in the Company.
23rd December
Supermarket Income REIT PLC, announces that on 20 December 2024, Sapna Shah acquired 48,781 Ordinary Shares in the Company
Following the above acquisition of shares, Sapna Shah holds 118,862 Ordinary Shares in the Company.
Still one firm shorting SUPR, JPMorgan
https://www.lse.co.uk/ShareShortPositions.html?shareprice=SUPR&share=Supermarket-Income
Odd disagreement between directors with inside knowledge and a very well resourced fund manager like JPMorgan?
The directors are not just showing support for the company by buying a few shares as these purchases and holdings are significant.
What does JPMorgan think is the reason for (in there opiion) the overvaluation? Is it specific to the REIT sector or SUPR itself?
Note BlackRock are increasing there holdings and possibly lending some of the shares to JPMorgan. So the rumour goes!
Allowing them (BlackRock) to buy more cheaply?
From a broker reference recent rns
Supermarket Income REIT PLC shares offer value and a dividend yield of 8.6%, said broker Stifel as it reiterated its ‘buy’ recommendation at 80p share price target.
This followed an update from the real estate investment trust about various recent portfolio initiatives, including the sale of one Tesco store, lease renewals on three other Tesco sites and the acquisition of a handful more Carrefour supermarkets in France.
Selling a Tesco store in Newmarket recouped £63.5 million at a 7.4% premium to book value from last June, which Stifel analysts said “provides useful evidence of the wider portfolio value”.
The lease renewals of the three shortest leases in the Tesco portfolio, adding an extra 15 years at an average 13% ahead of the estimated rental value, with annual RPI-linked rent reviews subject to a 0-4% floor/cap, are expected to contribute to positive capital value growth at the June 2025 valuation, the broker added.
As a result of the re-gearing, the overall portfolio’s weighted average unexpired lease term will increase to 12 years from 11 years, and the next material lease expiry is not until 2032 .
Looking at the shares’ 8.6% yield, with the dividend fully covered, and 22% discount to the current NAV forecast, Stifel said: “Even against a sector that has been particularly bruised over the last 6 months, Supermarket Income REIT’s shares offer particular value”.
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Presently trading at 71.2p middle.
80p doesn’t look particularly rich to me.
Assuming the next 3 dividends are the same as the first quarter it would work out at 7.65% dividend at 80p. For something that appears low risk and has an improved outlook that’s quite a reasonable dividend.
Note there are some short sellers.
Edit One short seller.
Yet more news from SUPR… positive to boot.
Buying the management company for £19 million saving £4 million a year.
Also giving up REIT status…not sure about the latter.
https://www.lse.co.uk/rns/SUPR/proposed-management-internalisation-qshoba9bd2zoui0.html
EDIT not necessarily giving up REIT status.
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Suprs fundamentals solid balance sheet hope you all took more shares when it was cheap👍 Performing in a bad market is a good sign and the dividend is covered
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It’s still cheap.
8% dividend and 16% discount.
There is much cheaper REIT’s out there BUT not on risk reward basis.
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If you look at the NAV graph over 5 years it falls quite extremely once interest rates rise.
It seems more extreme than other REIT’s. And of course once interest rates fall or to be more precise gilts yeilds fall, then we should see a significant increase in NAV.
The peak NAV was 115p which today would give you a 5.32% dividend. When gilts yeilds fall to 3% a rising yield on low risk investment of 5.32% is far from horrendous.
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I would say this is beginning to look like a beneficiary of the Trump tarrifs. Steady with a bit of share price gain and still on a discount (11%). Next NAV update is expected to be upwards.
Supermarket Income REIT (SUPR) seems like a solid investment, especially with its focus on acquiring key UK supermarket sites. The RPI-linked income strategy is appealing for long-term stability, and the potential for capital growth through active asset management adds further appeal. Definitely one to keep an eye on!
Update yesterday on a new joint venture
https://www.lse.co.uk/rns/SUPR/strategic-joint-venture-with-blue-owl-capital-tinx8vhs8jxdmzl.html
Note yesterday was also exdividend day.
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