Jordy, do you think REIT price has been rising sharply this few month starting this year, and going way ahead of fundamental?

jasonkwk,

No. In fact, the price is lagging the market. While fundamental is intact and prospects growing, the market will definitely follow suit.

I cant believe my reits counter performed much better than those "growth" counters... and I collects equivalent to one year FD interest quarterly.... What else can I ask for more?

Reit just recover from slump and fear of recession and back to normal range.

With inflation looming, properties valuation only has one way to go, i.e. up only.

I would say reit is outperforming but not net in the stage of 'way ahead of fundamental' as even at current pricing (which has surged quite remarkably, yield wise is >7% which is about 3x current interest rate, which still a justify point to stay at current valuation, although I stated before valuation has reach a fair point, aka fully valued.

But with interest rate is not going to shoot to the roof, there is little incentive for reit holders to dispose reit which carry >7% yield, so there is no incentive for big sell down, unless there is expectation to see a double dip, or potential economy problem that lead to difficulty in lease.

To look at fundamental is simple, how much reit yield can offer as compared to interest rate, bond rate. If the gap is quite narrow, then yes, it could mean valuation is too rich.


In fact, AMfirst is making all time high of RM1.20. I hardly believe and never expect can make >30% on even without timing/making the investment during the bottom or crisis time.

If get the timing right on Axreit, RM1.00, has made 100% gain even without taking account into the distriubtion along.

In fact, a lot of so called 'growth stocks' are struggling due to their own issue, despite the economy recovering and KLCI has made up a lot of losing ground.

I think REITS were grossly undervalued in the past bcos many investors failed to understand REITS.

Now more investors understood the product, then tends to approach the fair value.

In Malaysia, no matter how good a product is , if buyers do not get to see and believe, then slowly it becomes a bad product.

Just my view.

My first entry into REIT was in AXREIT for which I bought RM1.01. I can tell you at time in the middle of the subprime crisis, buying things like REIT was a real challenge to the emotion Thus, unfortunately I didn't buy much.

As mentioned, REITs benefitting from publicity surrounding it.

Reit is still unpopular among retailer investors.

In fact, a lot of people don't know what is reit.
They still treat it like a share out there, which share price hardly move one.

People are noticing REITs a lot more now.

Maybe some want exposure to Property but don't want to actually own one, so they go for REITs. In a way they treat it like a unit trust fund.

It is not about the education or the knowledge of REITs (as I believe anybody who reads StarBiz would have understood REITs by now due to the coverage). It is more of the mindset of most Malaysian traders. They want quick profits, therefore they resort to trading.

Among my friends and investors, I can safely say that I am the only one investing for the long term. Even my mother was reluctant as first, but after my convincing, she eventually wanted to give REITs a try.

More on REIT from theEdgeProperty ..
City&Country: On REITs and property stocks

Looks like ARREIT is gonna underperform for a while?

The dilution effects and the psychological impact of the cheaper placement price.

Good time to accumulate Judge your own though...

You think so?

If they don't put the RM519m to good use, we're looking at a 33% dilution to their dividend payout?

Snippet from Maybank report (also attached below) in April 2010
( I thought they have some purchases in plan which is why the private placement)
........................................................................................................
Acquisitions to complete by May ‘10. In Jan ’10, ARREIT proposed
the acquisition of two commercial properties (Selayang Mall and Dana
13 office building) for RM227m. This will be funded via issuance of
140m new ARREIT units (proceeds of RM119m, assuming 85sen/unit)
and LT borrowings of RM111m (5-year fixed rate). The acquisitions are
expected to complete by May ’10 and could generate additional
RM16m p.a. in net property income (at net property yield of 6.9%). We
maintain our forecasts at this juncture which have yet to include this.


Attached File(s)
 2010.04.14_MBB_ARREIT.pdf ( 82.93k ) Number of downloads: 54

There is a misunderstading for some REIT holder. One may assume it property value goes up and end up with a higher value when they revalue the REIT after some time. But different REIT have different valuation policy, some only comply with SC guildeline that is revalue it once every three years, or some may chose to revalue it every years.

So, buying on revaluations and appreciations must consider very carefully, as case such as Starhill REIT have just revalue their property, which resulted in a huge gain, and they only revalue it once since their listing, listed around 2006 and revalue it on 2009. At another hand, The Al-‘Aqar KPJ REIT recorded additional contribution to the income from the revaluation of properties in conformance with Financial Reporting Standard 140 (FRS 140) requiring the revaluation of all properties annually.

Generally,
Private placement is only being allowed when those money raised through it is for the use of aquisition + pare down borrowing.

SC won't allow for simply a private placement without much intention.

what u all think abt dijaya?

de.crystal,

Dijaya Corp is not a Real Estate Investment Trust. It is just a normal property developer-cum-property leasor. So I think it is not suitable to be discussed in this thread.

sorry i am new to the share market
so what are the counters for REIT?
been searching at the 1st post but cant find any

de.crystal,

If you look at the newspaper or Bursa's website, you will notice a sector named "Reits".