i think the trailing dpu/dps was something like 9+ % , which is really very attractive. not sure whether the recent earnings have factored in the selayang mall rentals or not, but like jordy said, 7.25% on the back of 9+% means an automatic dilution of yield.

if they aggressively expand, earnings will rise, but depending on the tools they use to expand and the various costs, dpu probably will still increase even with new acquisitions. so yield is sustainable depending on the tools they use. i think the more they fund by borrowings and loans, the more beneficial to minority shareholders

Not exactly 100% dilution on 9% with 7.25%.
As some are funded through borrowing aka leverage which rate won't be more than 6%, so you gain extra 1-2% through leverage.

The more the acquisition funded through borrowing, the more yield the reit can achieve, as long as the properties yield > borrowing cost.

Yes, the more the borrowing, the more the yield that can be achieved.
But recent financial crisis has give a good lesson. Once you cannot refinance the borrowing, the whole reit can collapse due to excessive debt.
So over leverage can be dangerous as well.

Is this like buying a house for investment purpose? i.e. If you manage to rent out the house higher than the amount that you have to payback, you are actually gaining the difference.

Exactly.
Just like your tenants are paying for your housing loan.

That's why more borrowing or leverage will drive up the reit income.
If you go to overseas reit, there are some reit (before financial crisis) are running extra-ordinary leverage, at good time, seems very good, but bad time, can bring down the whole reit.

Something on AmFirst to chew on...



FBSM sells land to AmFirst REIT

FBSM Holdings Bhd, an information technology service and systems provider, is selling a plot of land with a five-storey office building in Cyberjaya to AmFirs t Real Estate Investment Trust for RM51.5 million cash.

The disposal will allow FSBM to unlock the value and realise its investment in the building, it told Bursa Malaysia yesterday.

Am ARA, the manager of AmFirst REIT, will pay via bank borrowings, FBSM added.



Cheers to all.

thanks for clarifying cherroy.
edit: if i recall the calculations, it's roughly 50-50 borrowings and share issuance.

This post has been edited by teehk_tee: Sep 5 2010, 08:37 PM

Boy Arreit keeps shooing up! Should I buy now in case it really shoot up to 0.95? Or should wait until this period of heat cool down?

it should cool down gua, probably just hangat hangat tahi ayam / new toiletbowl.
assuming it can give out minimum 7.5 sen this year based on the old amount of share capital, post-dilution should be about 6.1 sen.
6.1 ... translates to about 6.7% gross.. but if add in the new income, maybe can achieve ~7% if price at 90.5 ..

its just my very rough calculation, i hope to sell high at 92-93, and pick up even lower at 83-85

This post has been edited by teehk_tee: Sep 6 2010, 05:42 PM

you think so? it can go down to 0.83-0.85?
but i was thinking, when looking at cmmt and sunreit, which both give low yield around 6.x-7.x% for current price, still able to keep their price stable if not even moving up further. I mean, after arreit increases capital, this alone seems to attract more investors.

you need some major correct, major issue around to send price going down, like downgrade of properties sector due to abc measures, fund major liquidation or specific reit issue etc. otherwise with low interest rate environment and BNM is expected pause the OPR hike, it is unlikely, we see major movement in reit price.

i was under the impression that m-reits were very much affected by yield? except for CMMT and Sunreit which i think is because of institutional investors. thanks for clarifying

---

Added on September 6, 2010, 7:31 pmi think current rise is just overreaction. my opinion is that its unlikely to remain above 88 for the remaining financial year. if im wrong then can't accummulate at 85 d

This post has been edited by teehk_tee: Sep 6 2010, 07:32 PM

AXREIT seems to be a tool for speculation now. Suddenly 1 lot traded for 2.15 during the first half, which boosted the price to 2.15. At this price, the yield at 7.44% seems to be pricey now. Is there going to be some good news coming out from AXREIT?

I also interested to know this. I watch its price keeps going upwards. And I also spotted the 1 batang push up today.

My last ARREIT lots bought @ 8.45-8.5 in June 2010. However, during that time no news. Now ARREIT got in the limelite so I think it should still keep above 0.88 for some time until the next big REIT comes along.

This post has been edited by whizzer: Sep 6 2010, 08:43 PM

There are more and more people are starting to aware of reit especially after years good proven record of consistent yield.
While a lot of instituitional investors and fund managers are struggling to find good yield stocks or investment around, so for the like of Sunreit and CMMT, there are plenty of interest from them.
We had seen many insurance funds, dividend funds are very keen on reit lately especially through private placement, and during IPO.


This is not speculation, this is making fun out of it.

Great to know that there are people out there who are willing to sacrifice for the benefit of making my REIT portfolio look good

He or she may also have the same intention, to look good on paper.

He/she can hold a couple of million shares, buying 1 lot at 2.15 which cost Rm220, can make the portfolio worth rise a few ten k more, and may be base on performance, and fund managers may get bonuses because exceeding the performance benchmark.
So the Rm220 is well spent and worth every penny.

In my honest opinion, ARREIT will definately go up & not down......yesterday it went up 2 cents......last price is RM0.905.....today much more perhaps or maybe add another 2 cents or more??


Remember MAYBANK gave the TP at $1.19 JUST A FEW DAYS AGO.....so, waiting to get it back at RM$0.85 is almost a near imposibility.......so let us all be realistic & not have fat hopes.


Cheers to all.



See what brother whizzer says.......


.......yours truely bought quite alot at what brother whizzer bought too.











This post has been edited by monkeyking: Sep 7 2010, 12:56 AM

Peace bro

Maybank actually only raise 3 cents up from 1.16 to 1.19. However, of the help from cmmt and sunreit's great marketting, reit gains a lot more attentions. Just wondering what could be a stable price for Arreit for now.