This Q, SADC1 has no rental income for 1.5 months.

To have more accurate picture of quarterly basic comparison,
The real/accurate comparison is on the realised income per unit, aka realised EPS, not DPU. As sometimes they opt 99% distribution, sometimes they can opt 90%.

The result is not that impressive, but I don't feel huge disappointment because double digit growth in never a realistic target to start with without leverage. I am comfortable if the income is steady and has slight improvement.

I never aim/expect for double digit growth from any reit.

But with borrowing being pared down, it is matter of time, they will again aim for new acquisition to boost their earning base. Just my guess, based on its management history or way of doing.

Unless we want to see real estate bubble forming, a 10% or more every year is not something as long term investors want to see. It is not sustainable to expect this kind

Annual increment of 5-7% in rental is considered very favourable already. Remember we are talking about increment rate itself only.

I would say don't put too high expectation when investing in reit, as it is very similar to owning a properth then rent it out. The most important thing is to see from long term perspective.
We don't want to see bubble forming then burst resulted difficulty in getting tenant afterwards.

Private placement price is based on market average price which cannot differ 5% from the market average price pre-determined.

This is pre-requisite when issuing private placement which approved by SC.

For existing Arreit holders, there is also amendment of the private placement proposal, which SC require them to amend which send out to every Arreit shareholders.

You can read the wording in between, and the amendment.

Private placement generally below one, as part of 'sweeten' deal.

No, private placement means private.

This is downside of private placement.
But advatange side of private placement is that existing shareholders don't need to fork out a single cent for it, while company can generate cash, provided money raised from private placement does increase the company profitability, which doesn't affect the dilution part of story.

Private placement cannot be more than 10% of existing paid up capital to prevent

Please refrain using capital letter, kind of annoying to others, and capital letter in forum means shouting at others.

You need to look at the structure of reit itself in term of hotelier business.
Reit might not and generally not involve in hotel business. They just own the hotel as properties which being rent out to the hotel management company.

Uncertainty about Stareit, which and yield of properties is not totally known. There are a few name like Japan Ski Resort which has signed some MoU for the acquisition.

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.

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.

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.

Disregard whether YTL holds how much the stake, if one doesn't like it, then just vote "no".
It might not has any material effect, but if there is significant minority shareholders vote "no", then it also sends the message to the management board as well. (besides disposing)

SC is going to change the new regulation on asset liabilities disposal issue in the near future as well.

I would say exercise your right/preference disregard the outcome, although one might think or in actual fact, it could be irrelevant.
You never know what happens next.

Treat it as fixed income instrument.

It is more like bond than equities.

You should look at its yield at 1.20.

If the yield at 1.20 is not attractive for you, then time to let go,
or there is little improvement in DPU, (eventually increase in yield).
or the yield is expected to go lower
or there is alternative investment that offer similar yield while less risky (like FD)
or there is alternative reit which is better in term of their properties portfolio and better yield.

Just raise a few point to consider, there may other many reason, and personal reason/preference as well.

Your consideration of yield should be at 1.20 or 1.50, when you decide/consider to sell time.
Because once you sell, you can get 1.20 or 1.50, not already 1.00 aka the worth is 1.20.

Me also looking at Qcapital, see it will below 1.00 or not.
Me also look see look.

Stareit initially want to add more, after adding last month or so.

But after read the whole proposal of the disposal of Lot 10 and Starhill then turn into hospitality reit, apparently, the realised capital gain and the proceed money raised will all being used to fund the new acquisition, so no extra DPU from the capital gain realised. While there will be period lose of income due to disposal as new properties is scheduled to be injected within 6 months after the proposal being carried out, so there will be 1 to 2 Q with low DPU. As both proposed disposal properties made up around 70%+ of current income.

Axreit full year DPU is expected in the region of 15-16 cents, so aroung 1.70 price range could meet your targetted yield.

Company resolution is passed on the basic of majority of shareholders agree aka on the basic of majority in shareholding.

Unless in certain special circumstance like going to be implemented "asset and liabilities" sale/disposal ruling proposed by SC, which need higher watermark or some special circumstances that majority shareholders can't vote due to legislation or ruling incurred (which to protect the minority shareholders interest issue one), most resolution are passed based on majority in shareholding.

Ho Hup tussle has a lot of number of shareholding as both parties didn't hold the majority stake of 51%. They need other shareholders to vote favourable them to win in the EGM.

The % of shareholding dictates whether the resolution proposed can be go through or not.

Yup.

The vote by hands is to reduce the red tape and hassle of need to verify shareholding when voting, it is just for simplitic solution, nobody want to wait hours for verify and calculate the shareholding in voting most ordidnary resolution which generally not much issue or disagreemnt to start with.

But it doesn't mean more hands will win either, as take this scenario like Stareit.
Even there are plenty of Staretit minority disapprove the sale of Lot 10 and Starhill, it cannot stop the resolution to pass through as well. As YTL as the major shareholder (99% chance) will request the resolution to be passed on the basic of shareholding number to pass through the resolution. After all, this is what they proposed one.

By no mean, I discourage or encourage shareholders to vote against or for this resolution. Don't get me wrong.

Vote according to you like/wish in the resolution should be one adopted disregard the outcome of it.

Another new private placement by Axreit to acquire 2 new industrial properties.

http://biz.thestar.com.my/news/story.asp?f...78&sec=business

Most research houses give good rating on Axreit, due to
1. it is the one that constantly grow their asset base and diversified. It is the one that seen most "hardwork" in growing their asset base.
2. DPU is on the upwards trend looking from long term, as new injection of properties mostly contribute positive to the company earning despite with private placement.
3. Asst is not limited to a few properties, and have range from offices to industrial.
4. Share liquidity is ok, whcih fund managers find little difficult to buy and sell.
5. Properties generally located in good area.

Having said that, at current price of RM2.00, I view it is about fully value already for near term.