Logically REITs are for long term, cashing out due to short term investment objective may not work.

On the other hand,  if you do DCA if unit price sinks , you may find your  average effective yield goes up in the long run. Unit price may go up if tenant is found.

The exceptional case is they  cannot find a tenant at all.

Then you can blame it on luck again

I don't think the CEO position is a big issue. Company can always apply extension from SC/KLSE to fulfill the requirement.
Atrium is relative small operation company, with 4 warehouses to manage which should be quite easy.

Atrium's concern should be put on lease renewal issue, which one of its warehouse lease is expected to end this year second half, if not mistaken, correct me if I am wrong as I don't know or find any update whether negotiation is taking place to extend/renew the lease yet.

I do not  think it is so difficult to find a replacement.

Just that they may have someone in mind ( from within ) the company.

The reason that they have not promoted him/her up, could due to the expectation not made, or more time is needed to judge their performances.

They just cannot simply promote one just because there  is no CEO.

On the other hand , whatever savings if any,  would be passed back  to you in the form of  dividends, as more realized profit .

So not totally bad from investors point of view.

Sorry i would like to make correction on my previous post the latest gearing ratio for UOA should be 39% not 43%.

Refer to UOA ANNUAL REPORT, the average interest for borrowings is 3%. Base on my calculation on the properties yield which is around 8% with respect to latest valuation. It still provides a lot of margin. Lets assume this interest rate rise to 4% within the next 3 years we still have quite a number of margin for that. So i am quite comfortable with UOA NEW acquisition. Base on my own calculation after deducting of the interest expenses the project EPS shoud be at least 16 cents per unit!!!!!!

So for me i will hentam UOA REITS KAO KAO 

I think he may miss out the dilution on the private placement part, just my guess.

It is unlikely to see reit can achieve EPS grow of 50% with just one or two acquisition through private placement and borrowing.

In normal circumstance, market reaction on the share price is quite effective to reflect whatever news or development. As we see reit price generally well position in the range of 7-8% yield across, which most investors are comfortable with that kind of yield range.

Of course i did include the dilution and even the extra interest expenses UOA needed to pay in future and considering the extra interest hike of another 0.5 % even.

Of course if you guys look from the private placement of course the future EPS does not change much. But don forget the RM 270million loan which was raised through borrowings with interest rates of around 3.5% in future (last year borrowings interest was 3% we add another 0.5% for future interest rates hike). So as i said previously the margin is quite high. So in short leveraging is very important in managing reits

EDITED VERSION

Yes , you are right.

If he does not factor the costs of running the new buildings, then his investments, I would say is based on Best Case Scenario

Obviously unlikely to happen.

He could be penalised ( by the market ) for doing all the hard works.

Hopefully, I am wrong.

I get what you meant. Thats y i am saying the dividend should be 16 cents in my previous post (you can refer it back) after deducting all these expenses but in my calculation is actually 17 cents as per attached which is the ideal case. I am lazy to take these exact figures  into considerations but i understand what you guys meant so i already deducted 1 cents out from it. I am not an analyst i just want a rough estimations. Eventhough you are analyst you also cannot get the exact figures  as occupancy rates do determined the overall returns.

For you guys saying is easy but it took time to compile all this figures so i got to make some assumption on this and that.  . Even for the interest rates part i assume it to be 3.5% this year but in actual fact it is 3.25 at the moment.

If you really read their annual report you can see the EPS growth for the past few years. So who say reits don have growth? Its all depends on how you manage it.

Thats why i put a lot of "ASSUME" as this is just a rought estimations. I did not get paid for all these  .

As i said earlier, leveraging is very important in reits... The margin between the properties yield and interest rates play a very important role. So i believe it is the right time for UOAREITS to acquire two building blocks before the interest rates raise further. The margin is around 4% and with RM 270 Million loan... it is around RM10.8 million extra you see.

Actually no need to calculate much from here we already know the effect on future EPS. Those with some basic in math can calculate this out. 

Total new units after private placements is 422871776. So RM 10,800,000/422,871,776 = 0.025 CENTS extra here. Previous EPS is around 12 cents. So including this 2.5 cents should be added up to 14.5 cents.

But this all depends on UOA REITS TOO, maybe they want to allocate more money to pay off their borrowings.

NOTE : Current borrowings interest is only 3.25 i am assuming 4% interest and properties yield i am assuming 8% here which is quite fair. So there are margin here in actual fact it should be more than 10.8 million.

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Added on March 22, 2010, 1:28 pm

Sifu Jordy,

You missed out the contribution from the private placement….Thats why your earnings per unit so low…Let me explain to you more clearly. Is my fault of not explaining properly. 

245,948,700 units = (EPS 12 CENTS for 2010) = 29.51 Milliion
RM 230 million raise through private placement ( 176923076 new units)  assuming yield of 8% (after deducting all the expenses )  = RM 18.4 MILLION.
RM 270 Million through borrowings at 3.5% interest rates  (Assuming yield of 8%) that’s means margin of 4.5% = 12.14 Million
EPU = RM  60 Million / (422871776) = 0.14 CENTS.

In conclusion acquisition will definitely increase future yield with 1 condition below:

1. Acquired properties yield must be higher than interest rates and almost equal with current yielding.

I don think i need to explain further on these. Simple maths will do.

Yes i admitted my previous figure seems too optimistic however i am not agree on your previous post stated the EPU before and after acquisition are equal. 

The 1 cents deducted from the 17 cents net rental was really not enough as we need to deduct property operating expenses + Manager's fees + trustee's fees etc and even tax. But i believe these two blocks of building are quite new so the maintenance cost should be quite low.

Thanks Jordy. I think the idea behind reits is "ALMOST" same as we buy a house for investment. We loan through bank and collect monthly payment to repay the debts. In the end we owned the house. It will took few decades to settle the loan same goes for reits.
The yield will improve in future as due to below factors:

1. Increase in rental rates.
2. Reduce in interest payment.

What I'm uncomfortable about Stareit is I'm not sure (once it turns into a hospitality REIT owning only hotels and resorts) how it gets income to pay us dividends.

For industrial, retail and office REITs, it's pretty straightforward. They have tenants, and tenants pay rental.

How about hospitality REITs? I presume they have to rely on individual visitors and tourists, and there are bound to be dry seasons - which in turn, could affect dividend payments.

Correct me if I'm wrong.

Submitting Merchant Bank : - 
Company Name : AXIS REAL ESTATE INVESTMENT TRUST 
Stock Name  : AXREIT   
Date Announced : 20/04/2010 

EX-date : 30/04/2010 
Entitlement date : 04/05/2010 
Entitlement time : 05:00:00 PM 
Entitlement subject : Income Distribution
Entitlement description : First Interim Distribution of Income of 3.70 sen per unit (of which 3.65 sen per unit is taxable and 0.05 sen per unit is non-taxable in the hands of unitholders) in respect of the period from 1 January 2010 to 31 March 2010.

Period of interest payment : to 
Financial Year End : 31/12/2010
Share transfer book & register of members will be  : to closed from (both dates inclusive) for the purpose of determining the entitlements
Registrar's name ,address, telephone no : Symphony Share Registrars Sdn Bhd
Level 6, Symphony House
Block D13, Pusat Dagangan Dana 1
Jalan PJU 1A/46
47301 Petaling Jaya
Selangor Darul Ehsan
Tel No. 03-7841 8000

Payment date  : 27/05/2010

a.
Securities transferred into the Depositor's Securities Account before 4:00 pm in respect of transfers
: 04/05/2010

b.
Securities deposited into the Depositor's Securities Account before 12:30 pm in respect of securities exempted from mandatory deposit
: 
c. Securities bought on the Exchange on a cum entitlement basis according to the Rules of the Exchange.

Number of new shares/securities issued (units) (If applicable)
: 
Entitlement indicator : Currency
Currency : Malaysian Ringgit (MYR)
Entitlement in Currency : 0.037


Remarks :

I think after the private placement exercise, the pie needs to be cut into smaller pieces. 

I don't think its a once off thing. After the private placement, they would need to increase income by equal proportion to the amount that has been increased to give the same divy.

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.

any one has studied what will be the effect to arreit's eps, nav and its price when the proposal of injection of 2 new assets and issuance of new shares to partly finance the acquisition completed?

i am a bit concerned if it dilute the eps and eventually the DPU. i have a big plan on this counter actually but still in doubt about it..

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