Tritax Big Box REIT

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Tritax Big Box REIT 3 Month Chart


Tritax Big Box REIT Discussion on Interactive Investor

Re: Latest share issue by jonwig1

  Tue, 25 Apr 2017 19:10:00 GMT

Eadwig - a preceptive analysis there, thanks! I think I'd add that valuations are decided on by cost of land plus discounted (and inflation-adjusted) cashflows over useful life less depreciation. They're also pretty cheap to build: less inner walling, less plumbing, electrics, etc.
I think in the future the land can in fact be reclaimed for housing. When driving on the continent I'm surprised at the density of housing close to motorways They seem to be able to erect screens between the estates and the carraigeways which block noise.


By jonwig1

Re: Short changed? by Davey Baby

  Tue, 25 Apr 2017 15:44:00 GMT

The PID in my A J Bell SIPP was paid gross (brokers can usually request gross payments from companies that pay PIDs). You could ask ii to apply to have your future PIDs to be paid gross. From the Tritax website:

The PID element of the Dividend will be paid net of 20% withholding tax (unless a shareholder is eligible for payment of a dividend gross and completes either a INTERMEDIARY – DECLARATION OF ELIGIBILITY FOR GROSS PID PAYMENTS FROM TRITAX BIG BOX REIT PLC or a BENEFICIAL OWNER DECLARATION OF ELIGIBILITY FOR GROSS PID PAYMENTS FROM TRITAX BIG BOX REIT PLC and sends it to our registrars Capita Asset Services.

LINK


By Davey Baby

Re: Latest share issue by TX2

  Tue, 25 Apr 2017 15:02:00 GMT

I think it is fair comment Eadwig that NAV is at best only a guide to present value based on recent sales and particularly with specialist property like "Big Boxes" could rapidly change due to supply and demand for this type of property.It does not obviously have an alternative use as you wisely point out.
We have seen valuations of out of town shopping centres starting to slip;these were once "flavour of the month" and thought invincible but the move to online shopping has changed their prospects as it has retail property generally in quite a short time frame.
Low interest rates have also flattered the valuation of property;a 6% gross return on a "Big Box" seems quite attractive making perhaps a 4.5% divi when you can only get 1% at the bank;but if interest rates increase and we can get the same return at the bank it seems less attractive.Particularly if the property company has to pay a higher rate on their borrowings which eats into their rental income,and we have to be mindful of the borrowing multiplier on net assets if property values fall.

In fairness I have made a reasonable paper return here (I have reinvested the divis including the present one in three open offers) but I admit I am rather over exposed to property,albeit spread over a wide range of classes of property.


By TX2

Re: Latest share issue by Eadwig

  Tue, 25 Apr 2017 03:10:00 GMT

TX2 et al.

I'm a bit unsure about the NAV in this type of REIT. Commercial properties like this generally decline in value over time, unlike housing, but I assume that is built into the rental prices. I would imagine such properties don't have a life expectancy much beyond 25 years and maintenance costs will increase over the years, and one or two major refurbishments may be required. Again, I assume that's built into the lease and rental agreement, but I must admit in my hurry to diversify into different types of property REIT, I haven't looked into it as closely as I should have.

The land should appreciate over time, ... but that will also depend on location for such a property and will be affected by population distribution and infrastructure which tend to dictate decisions on the placing of distribution depots etc.

There is also the chance of getting a different type of planning permission on the land in future to take into consideration. When the building has outlived its usefulness, if it is no longer a suitable location for the same type of use, how likely is it that it can be used for some other type of use? Being placed alongside motorways or rail freight lines or whatever, the land
may not be obviously suitable for many other types of use, such as housing, for example, which would usually be the most valuable use.

In other words, where is the 'capital appreciation' coming from which Tritax intend will enhance shareholder returns when combined with increasing rental income?

When you're looking 15-25 years down the line, there are many things that can change which might make current buildings unsuitable; possibly technological changes that we can't even really imagine right now. Ordering items online which are then '3D printed' very locally could leap frog this type of distribution centre for some products, just as a fairly wild, but not impossible, example (consider some modular buildings are now being '3D printed' on site, E.g. One 3000 square foot house being completed in a day by such methods right now in the USA).

I really wouldn't rule out any changes when you're looking at 'getting rich slowly' over a decade or two, especially as technology is increasingly important within distribution centres and the whole supply chain generally.

I wonder if anyone knows just how much of the above is as valid as I think it is, if the company has plans to deal with such things and whether or not such things to do with land are fully reflected in the valuation when calculating the NAV?

The web site says this about Strategic Location : "Traditionally, the ‘Golden Triangle’ in the Midlands has been regarded as a prime logistics location as it offers tenants access to 85% of the UK market in 4.5hrs driving time.

Big Boxes are strategically located in areas with strong transport connections, Access to major roads or motorway junctions is a must, but alternative transportation routes via airports, sea ports or rail are increasingly important for efficient goods inwards stocking and downstream distribution. [See what I mean about not being obviously placed land for use as housing, or even retail uses, should the site become less than optimal in its location in the future - Eadwig]

Increasingly, of equal importance to occupiers are locations that are close to large employment pools, ensuring their ability source suitably qualified employees in sufficient numbers from an area immediately surrounding a site." [Amazon have a stated goal of moving from 1000 employees per centre to 100 in the next generation to 10 in the following generation - Eadwig].

And about building specs: "Big Boxes are a relatively new phenomenon. This large-scale format did not exist in the UK before the early 1990s, therefore most high-quality Big Boxes are modern facilities constructed within the past 15 years.

Big Boxes have evolved into technologically advanced buildings. The specification will usually include ground floor


By Eadwig

Re: Short changed? by strapuk

  Mon, 24 Apr 2017 19:47:00 GMT

Finally got to the bottom of this, although no thanks to II.

The dividend paid on 04/04/17 was made up of 2 parts.
1.45p of the 1.55p declared dividend was a standard UK dividend, and so was paid with no tax deducted.
0.1p of the 1.55p was a "Property Income Distribution" or PID. These are paid net of 20% tax, which as we hold in an ISA II claim back from HMRC. This takes II about 8w to credit to your account, but you should get it back eventually. Quite how HL manage to pay the full published dividend up front on the due date is a bit of a mystery!

The dividend declared today of 1.6p is all PID, so we will only receive 1.28p on the due date, with II reclaiming the 20% tax of 0.32p and crediting to your account c.8w after the due date.

Phew, glad I worked that out. Keep your eyes peeled on your account though to make sure you do eventually get the tax back!

Just FYI, I will be taking up the 1 for 11 offer and wil also apply for the same amount via the open offer. As HL says, this is a "get rich slowly" share, and as my yield on cost is over 5%, I am happy to keep adding as these offers come along.


By strapuk

Re: Latest share issue by TX2

  Mon, 24 Apr 2017 14:37:00 GMT

I felt the recent share price was a bit toppy when compared to the last published NAV of I think around 126p;while a small premium to NAV may be justified it rather looks as if £1.36 was about as high as they could get the new issue away.
I will probably be taking up my basic one for eleven entitlement a fair proportion being covered by the last years dividends.The shares are in my opinion pretty fully valued at the offer price but so is much else


By TX2

Latest share issue by PhilipJD

  Mon, 24 Apr 2017 13:59:00 GMT

News at LINK . Given price of £1.36, share price has fallen quite a bit.

By PhilipJD

Re: Short changed? by strapuk

  Fri, 21 Apr 2017 09:52:00 GMT

Yes I had the same problem, but as it was less than a pound difference I couldn't be bothered to complain. II do seem to have an issue with paying dividends from REITs and other similar shares like P2P. Strange how HL can always pay the full announced dividend on time in my wife's ISA with them, when II cannot in mine.

By strapuk

Re: Short changed? by Floatingboater

  Fri, 21 Apr 2017 05:18:00 GMT

Well, II's response was as you guys pointed out.."Your dividend for your Tritax Big Box Reit Plc shares have been paid correctly. As this is a Reit share which part of the stock is paid as a PID, a Property Income Distribution, these are taxed at 20 per cent and the tax is then clawed back on your behalf.".

Yours sincerely ...

So if the part that is taxed at 20% is clawed back I assume we all may receive it at some stage?


By Floatingboater

Re: Short changed? by CeeAJay

  Thu, 06 Apr 2017 11:20:00 GMT

I think you will find it is because PID is taxed at source. REIT's usually issue their divvy as 2 components a PID (property income distribution) and non-PID dividend. The PID has 20% tax deducted at source. I guess you were expecting £3.29 as the PID component (3289 @ 0.1p). 20% tax on that is c66p hence the £2.63 credited to your account.

By CeeAJay

Re: Short changed? by Floatingboater

  Thu, 06 Apr 2017 08:54:00 GMT

My holding is 3289 shares in an ISA. II credited £47.69, then reversed that amount, then credited the same amount again.
They then credited a tiny amount, £2.63, so it's about 66p short i think. I'm not hard up for 66p but i'll send them a message and
see what happens. Thanks guys.


By Floatingboater

Re: Short changed? by Medway Man

  Wed, 05 Apr 2017 10:11:00 GMT

Hi all..all I will say is...on both mine and my wife's various REIT holdings within our respective ISA's....since Selftrade (who we used first) was taken over by Equinity, to become Equinity Selftrade (for us), we seem to get our divi's paid in full at the same time on the due dates, sometimes split in two amounts, other times as one amount..so I guess we are lucky on that front.

By Medway Man

Re: Short changed? by TX2

  Wed, 05 Apr 2017 08:32:00 GMT

The current divi is being paid 1.45p as a non PID dividend (ie normal divi) & 0.1p as a PID dividend.Although I use iii;my Tritax shares are held in an HSBC ISA;I note as of today I have been paid the non PID divi but not as yet the PID dividend,which will no doubt turn up in due course.
I think Floatingboater has ended up with a total amount of 1.53p because 20% tax has been charged on the 0.1p PID distribution which may still be charged at source on PID distributions not held in an ISA.


By TX2

Re: Short changed? by Eadwig

  Wed, 05 Apr 2017 07:13:00 GMT

Floatingboater,

Looks like ii have managed to mess up the taxable part of a REIT yet again. I also haven't received the full amount and I hold it in my SIPP. I had one amount added then reversed, then the same amount added again, which works out @1.449228269699431pps.

Another REIT I hold in there actually had its dividend paid out IN FULL (coincidentally also 1.55pps) but two payments were made and one was a day later than the other.

However, the differences were obvious, with 40% paid the first day then 60% paid the second day.

Its a bit annoying because I have re-investment on so obviously that DRIP hasn't worked out properly either (and has already executed, and a second attempt to execute it resulted in a secure message saying I didn't have enough cash from the payment to buy a share).

I also have a REIT in my trading account, and ii have messed up the tax on that in the past - but they eventually get it right.

I suggest a secure message and explain what you received and what you expected and which account it is in (I.e. tax protected or not), but see if anything else arrives today before you do it.

Let us know how it goes. I shall be doing the same.


By Eadwig

Re: Short changed? by Medway Man

  Tue, 04 Apr 2017 10:45:00 GMT

Could it be your broker treats the REIT part separately, and credits at a later date?

Selftrade who I use; before they became Equinity Selftrade, always (on my REIT holdings) did the REIT element either as a separate amount on the dividend pay day, or at a later date when claimed back.


By Medway Man