Hey.. You right. Maybe maybank calculator koyak at that point

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Added on March 24, 2010, 7:01 pmAlso.. looks like it has the highest asset value. I wonder how much would be left after the rationalization ?

This post has been edited by whizzer: Mar 24 2010, 07:01 PM

But ST debt is only 9m out of the total 114m, it couldn't be 92% right?

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Added on March 24, 2010, 7:23 pmI favor Tower REIT which is valued 30% under it's NAV, the most undervalued among all.
But I wonder why there is so little discussion here.

This post has been edited by kbandito: Mar 24 2010, 07:23 PM

some typo errors made by Maybank.

You can discuss it too.

Why must you wait for people to discuss your reits ?

You can bring it up here, to share more with us.

This post has been edited by SKY 1809: Mar 24 2010, 08:14 PM

As long as the rationalisation or selling of its properties at or around its NAV which is expected to be, NAV won't change.

In fact those rationalisation process will realise the capital gain/properties valuation appreciation which is distributable if they wish to.
But just my wishful thinking which I don't think it will. My view only.

Invest in Reit, the primary concern is about yield, not about how much undervalued on its NAV (although it is an important as well, just it is secondary to the earlier factor).

It is not about short term debt vs long term debt at current point situation. As at current point, bankers are willing to lend and credit facilities are available, so short term debt or long term debt is not much an issue. Long term debt will become short term when come or near to its maturity as well, it is all about timing. As long as refinancing is achievable with ease, this is a none issue. And focus should shift to secured interest rate on the loan.

Reit share pricing is primary towards yield issue, not on NAV. So you see reit price generally pricing at around 7-8% across. They follow the yield instead of NAV.

Reit is not popular here, so seldom being discussed in general, no surprise, as many investors here still not fully aware and fully understanding about reit due to the fact reit is boring and somemore low liquidity which make reit volume is low and price generally move little.

I had also entered Stareit on this prospect of valuation appreciation from disposal. In your opinion, what are the possible risk to this? One that I can see is that we maybe forced to pay a premium for YTL resort properties.

This post has been edited by whizzer: Mar 25 2010, 12:26 AM

Valuation appreciation is already reflected in NAV (from Rm1 to Rm1.20), just the selling of the properties will realise the gain.

The primary risk is about newer properties injection, which not yet being disclosed.
Since there is no info on it, we don't know the future yield which is the primary risk of time being.

REIT is a very good alternative to FD. But I rekomen anyone to maintain AT LEAST an FD equivalent to 1 month's net salary as 'emergency fund'. The rest of your surplus cash you don't intend to invest for long-term can park in REIT to eearn superior yields.

Whatever loans taken by REITS, the proper way by right should be settled off every now and then when the loans are due. It should not be " Refinancied " let say every 4 years or so.

The refinancing method used by REITS indicates there is a major weakness in the system, possibly they are earning insufficient cashflow to pay back the loans taken when due . Meaning they are just merely serving the interest when due.

This could be the downfalls of REITS in Singapore, I guess. And the downfalls of certain industries from time to time , cannot be attributed solely to the banks for non supports. LCL is one such I can think of.

Companies have to manage their own cashflow very well. And the job falls under their management , not the bankers.

Under normal circumstances, loans such as revolving credits or ODs that are needed for working capital of an entity , will be renewed, as the financing of working capital is an on going process.

But it should not amount to 30 or 40% of the gearing ratio.

And for commercial property loans taken by the companies, banks do allow a longer tenure of 10 years to pay back , possibly up to 15 years ( needed to reconfirm on 15 years )

There is a saying that long term assets should be financed by long term debts, the proper way. Those who are involving the the financial management of the companies would agree to this point.

Just my view.

This post has been edited by SKY 1809: Mar 25 2010, 08:35 AM

Borrowings for UOA (UNITED OVERSEA AUSTRALIA) reits are term as revolving credit which they have to choice to decide how much they are going to pay on that particular month.

The way they calculate their interest are base on

A% + COF.

COF (COST OF FUND) will vary from time to time.

This post has been edited by darkknight81: Mar 25 2010, 08:14 AM

deleted.

This post has been edited by SKY 1809: Mar 25 2010, 08:34 AM

Why is Axis carrying such a premium compared to its peers? Other REITs have fractional price to nav per unit and comparable yields.

Are people placing a premium on the property diversification alone.

I would say yes. If you look at others, Hektar purely on suburban retail, while UOA on office properties. Axis quite diversified. And the number of properties they have also quite big compared to the others, thus its risks are quite distributed. Hektar only have 3 properties, imagine if something were to happen to either 1, 33.33% (assuming equal contribution from each mall) of its income gone.

Also, generally REITs are priced around their yields. Axis is about 7%++, while Hektar and UOA about 8%++. So, the difference is not really that big in that sense.

Btw, only these 3 REITs are within my coverage, so I'm only comparing among them.

too add something beside what prince hamsap said, AXIS REIT is also the only Islamic REIT in Malaysia. I don't know what is the criteria of a ISLAMIC REIT, alot of syariah fund are shareholder in AXIS REIT.

Not true that AXREIT is the only ISLAMIC REIT. The others are ALAQAR & BSDREIT.

thanks for the correction,want to say AXIS REIT is the first ISLAMIC REIT.

There are still lot of arguments in the market of what is called a true Islamic Reit.

So one should not use this Islamic factor as an overweight to buy.

Things like sin businesses , traditional banks earning interest and coffee/entertainment outlets selling non halal food and drinks should not be allowed to operate in REITs Premises. Some argued that.

This one was brought up in certain forums elsewhere.

Just my view.

This post has been edited by SKY 1809: Mar 28 2010, 11:34 PM

Islamic REIT:

Haram activities (vice, alcohol, entertainment, conventional banking, among others) are not allowed in the properties in their portfolio, or if I'm not mistaken there's a limit i.e. not totally prohibited. Can any muslims here advise?

2ndly, their financing must be by syariah-compliant instruments/banking.

AXREIT coming down.

No disrespect to Islam, but won't that restriction limit the range of properties and potential tenants AXIS can get? Some of their occupancy rates aren't 100% and what if Carlsberg or whatever comes calling

NAV do change when properties are revalued, there is an unrealised gain in most REIT.
The primary concern of yield should also add by the earning power of REIT, since most REIT distribute 90% of their income for tax free purpose.

If gearing should be a problem , consider wise that any equity may require to pay an hefty 8% return for unit holder, compare to 4~5% of interest.