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.

The NAV part posted is when Stareit disposes its properties at NAV then NAV will not change due to the disposal of properties.

Don't know what is your meaning especially on the bolded part. 

There is no requirement or mandate to pay unit holder 8% or whatever %.
Any distribution is given based on 90% of its profit or income.
Lower income low distribution.
No income, no distribution.

Unit holder is not lendign money to reit company, unit holder is the one 'own' the company.

Moolah,

REIT is a "trust" (or custodian) for the properties. It does not operate the properties under its trust. It is a management company which leases out all properties under it, be it hospitals or hotels. Therefore, the trust will only be earning rental for all its properties.

Although STAREIT owns hotels, but it doesn't operate the hotels. In fact, it leases its hotels to its parent company (in this case is YTL) which in turn operates the hotels. So the cyclinal nature of the business only affects YTL's account. STAREIT will still be earning the rental even if the hotels are facing a downturn.

REIT players hope for better year

fter two quiet years in the local real estate investment trust (REIT) market, industry players are hoping for a better year in 2010 through more active retail interest, asset expansion plans, and entry of new players.

ccording to Malaysian REIT Managers Association (MRMA) protem committee chairman Stewart LaBrooy, news of some existing REITs’ plans to grow their portfolios after a two -year hiatus is encouraging.

uite a number of REITs have plans to expand their asset portfolio, with expansion by UOA REIT, AmanahRaya REIT and Al-Aqar REIT to involve new investments of RM1bil.

e said REITs would have better upside yields accretion potential if they had steady portfolio expansion through regular strategic asset acquisitions.

n whether raising enough funding for their asset expansion plans still posed a challenge to REITs, LaBrooy said: “Since the global financial crisis, there has been a game change on the regulatory environment that is helping REITs and capital markets cope with issues like faster capital raising and more self regulation.”

lthough under existing Securities Commission (SC) rules REITs can place out new units of only up to 20% of their unit base and it can be done only once every 12 months, the SC is prepared to grant specific approval to REITs to raise additional capital within 12 months on a case to case basis,” he told StarBiz.

t is possible that with the upcoming capital raising plans and new listings, there is potential for the market size to be increased to RM18bil from the current RM8bil.

aBrooy said if the listing of a few more sizeable REITs took place by this year-end, it would further add to the depth and liquidity of the market.

he upcoming REITs include the Sunway REIT which is estimated to have asset value of around RM4bil and Malaysia’s first cross-border REIT, the RM1bil Qatar REIT.

he coming onstream of these new players will inject a lot of liquidity into the market. This will create more excitement in the REIT sector in terms of size and asset class diversification and should place REITs on the radar of more local retail investors and larger foreign funds,” added LaBrooy, who is also Axis REIT Managers Bhd chief executive officer.

urrently, retail investors only account for 10% to 15% of the total REITs’ market capitalisation of close to RM6bil. The biggest portion comes from institutional investors who account for close to 60% and REITs promoters at 25%,

o promote greater trading interest and volume for REITs, the target is to raise the retail portion to 40% of the market capitalisation.

ith the huge liquidity in the local system now, there is huge potential to expand the retail interest for REITs,” LaBrooy said.

e added that retail investors were generally ill informed of the benefits of investing in REITs. “Investor education is essential and as a result the MRMA, has undertaken to conduct an investor outreach programme. So far we have conducted public roadshows in Penang, Ipoh, Klang Valley and Malacca. Our next roadshow will be held in Kuching on May 8.”

aBrooy said to make REITs more popular with the retail investor, there was a need for more liberalisation on the regulatory front and the removal of the withholding tax for individuals.

urrently, both local and foreign retail investors have to pay 10% witholding tax to the Government.

e said the recently established MRMA, with nine out of the 11 REIT managers as members, would engage the regulators to overhaul the prevailing regulations and speak as an industry body on tax issues affecting REITs in time for the 2011 budget.

n challenges ahead, LaBrooy said: “The biggest challenge for local REITs is to reach a size of US$500mil and grow beyond this. This is the minimum requirement if we are to attract foreign funds to our market and has to be an aggressive strategy for each manager.

o achieve this, the REITs have to have four conditions in place – stock price that trades at a premium to net asset value (NAV), so that capital can be raised in a non- dilutive manner; an identifiable pipeline of new assets to acquire; market yield that is achievable at the time of acquisition; and a recovery in the bond market so that new sources of financing can be obtained without reliance on bank lending,” he pointed out

This sounds very unreasonable to me. How much return would you think is sufficient to compensate for the lack of capital appreciation?

2) yes, there is guideline, debt ratio cannot more than 50% of their NAV. Asset is required to be revalued every 3 years.

3) This is not much an issue for long term investors, as if properties value still intact, the value of Stareit based on NAV is still more than Rm1.00. As share price is a reaction to the yield issue which there is little or no income increment as compared to other reit.

4) Asset can be sold if the property manager wish to, just like Stareit.
Reit currently under 90% distriubtion policy only can grow through private placement to raise money which needed for new asset acquisition. AHP2 is a disappointed incident.
It all depended on how well property manager manage the property and particular property issue, like location, rental demand for the particular type of property.

5) Reit is about how much yield investors willing to pay for or willing to have.
Every year you are getting 9% yield while property is still yours. It is not like you are paying Rm1.00 to them and not returning back, The Rm1.00 property is still belonged to yours.

In fact in reality, you buy a property (residential) adn rent out, it is almost near impossible to have yield more than net 8%. Someore the property you bought is more illiquid than reit. Which reit you can sell whenever you wish to, and with any amount.

At 9%, it is miles better than money parked in FD.

10% return rate is considered moderate high or ok for investment class, giving that reit risk exposure is lesser than ordinary businesses.

Yes, reit growing is little as they can only grow, if there is rental increment, or newer acquisition to improve yield while acquisition financing is only through either borrowing or private placement.
As 90% distribution policy means that only 10% of income is retained in the company.

I don't think this is the case for most reit here. Generally there is around 7-8% out there. A lot of their NAV has been going up due to revaluation as we know properties price in general has gone up recent few year. But if taking into the origin NAV in consideration, they are achieving around 8% in average.

10% yield is asking a bit too much out there (but if one has bought last year, most are carrying more than 10% yield), you need to considered there is 1% charge on the management fee side of story. To have a property that can achieve gross 11-12% yield, which is not a reasonable target.

2) The guideline never change. Revaluation is every 3 years. There is SC guideline, not the like every reit has their own rules. It has been there since the reit industry kick off if not mistaken.
Syariah and revaluation is 2 totally different matter. Doesn't relate.

3) AHP2 didn't fetch any income (I don't know what is the reason, as I don't follow the issue), but as far as I had known, shareholders had formed some group to sell off the asset owned which in return will get back money through the asset disposal. They still own the property, not zero. Whatever left is the property.
When a company didn't generate any income, for sure, share price will drop and drop. Who want to invest in a share that doesn't make any money for you.

Share not liquid has nothing to do with reit or any listed company fundamental. Again it is 2 different matter, it is the fundamental issue that causing the reit has little value or depreciated in market price.

4) This rule is to protect shareholders, imagine property manager sold the asset at 50% discount to someone (or though RPT), surely shareholders benefit will be hurt. The rule is to prevent property manager sold the property at significant discount rate due to whatever reason or intention. Any special circumstance can always apply exemption from SC. So this is little case of asset illiquid.

Any guidelines/rules, you consider the unit holders benefit, where got people consider buyer or other party benefit one? 
You want to sell your property as close as to the market value. Let say your property/house market value is Rm300K, do you consider buyer must make more than 10% profit, then you decide you must only can sell less than 270K?
It doesn't make sense.

Having reit is about having faith the property manager is managing property properly and generate rental income or yield to the shareholders.
Disposal of properties generally is not something good news to reit, what you want from reit is to expand the rental income scope and getting more properties into thier portfolio and diversified the asset and rental income.

Invested in reit is about expectation of fixed income through rental collection, just like buying a property and rent it out and collect the rent.

If one expect more return like 10-20%, reit is not a place to be. It is more like a fixed income instrument.
Reit is not ordinary share. It is another different class of investment. Risk wise and risk rewards ratio is different. Cannot take in ordinary share return to compare with reit.

The most important for ordinary reit investors, how much return and yield you can get through buying the reit in the market.

You buy Axreit at Rm2.00, it can genearate about 16 cents or little more for you then it is 8%+ gross yield
You buy Stareit at Rm0.86, it can generate about 7 cents, it is about 8% yield.

So reit price is adjusting to the yield attractiveness in general.
Properties revaluation or higher NAV is another bonus aspect, and investors out there don't buy the reit based on NAV but people buy reit due to the yield factor.
Investors buying share out there don't look merely on NAV alone, what investors want is hard real return each year. It is as same acorss stock market. We have a lot of property counter (not reit) that are trading at Rm1.xx but NTA is Rm3-4 as well, why? Because share price react to ability to generate profit to the shareholders.

Properties is required to be revalued every 3 years, that's for sure. But under reit, there are many properties, so the every 3 years period is not the same for each one, so you may see revlaution happen every year, but they will state which one is revalued in the period.

Borrowing cannot exceed 50% disregard long term or short term. can refer here http://www.axis-reit.com.my/images/axisrei..._08_chap1-8.pdf

Regarding the ex-date, deduct out the share price, as long as company is earning constantly through rental income, the lower price of the share price, the higher yield it is and more attractive.
It will not become zero. For eg. Stareit is earning 7 cents, so after 10 years, it deduct out 70 cents, so theorectically, it will become 0.86-0.70 = 0.16. It is not the case.
If Stareit is still continue rent out its properties, and earn 7 cents, I can assure the share price won't be 0.16. It is no braniner to see it will be 0.16 if it is still earning 7 cents.

Do not take ex-div which deduct out share price will devalue the share. It doesn't. The share valuation come from ability to generate profit/income to shareholders.
Share price will auto adjust by market force which dictate by yield factor.

For eg.
Axreit is giving out average 12-15 cents for the past few years, but share price of Axreit is higher than before because it managed to grow its earning, diversified and expand through acquisition which through private placement.
AHP2 didn't generate any income to the shareholder previously which is the major downfall of this reit and the reason why unit holder disgruntled, not about share price below or above NAV. So unit holders have no choice to liquidate the properties to get back the money. As said before, no one will want to invest in anything that doesn't generate income for them.

Reit is about renting, leasing properties which is the core income and attractiveness. You look for the properties can be rent out for long term.

You buy reit not because of NAV, you buy reit because about its yield.

As said, if wish to see return rate of 10%, reit is not a place to be.

It is as same as you buy a property then rent out only. The situation is identical to reit. You cannot grow your properties portfolio, if you have no new money or through borrowing. You cannot possible get more than 10% yield through renting out.

Rental market yield is about 7-8%.

For revaluation issue,

Reit guideline has stated 3 years once at least.
New FRS stated every year. This is applied across all company account if they start to adopt the new FRS. This is not applied on reit only.

So I don't see any clash between the guideline and FRS. If adopted the new FRS, then every year revaluation once. I don't see an issue here. The new FRS every year revalaution means they will overwrite the guideline only.

There is no such thing of every reit adopted their own guideline.

If one view the ex-date distrubtion/dividend deduction is actually culprit of share price dropping, I can't help to explain more further (has been explained many times). In actual fact, it is not. Whether there is distrubtion or not, share price still will drop to 0.8x to match the overall market yield around 8% if Stareit cannot earn more than 6.+ cents. Market share price always respond and react to how much earning ability.

After the recent financial crisis, investors demanded more yield to justify their risk, especially with real estate is the main culprit of recent crisis and a number of overseas reit actually went under and have their own problem, mainly due to leverage issue.

If one view short term like that (ex-date of dividend deduct out the share price), then please don't buy any dividend stocks. No offence. 

Stareit IPO price at 6.x% yield is not attractive enough for investors, that's why the share price drop to 0.8x become a 8.+% yield. Somemore Stareit DPU never go up at all and with the rationalisation plan uncertainty (new properties injection), then share price will be traded at this range for near term until situation become clearer and how much the future yield it will be.

As said before, you buy reit, you look at yield as primary factor, you don't look at its IPO price nor NAV, as this is secondary.

Look at how much IPO offer price at what expected yield, then only decide the price you are going to enter. If yield is not attractive enough as compared to overall market existing has, then high chance it will drop below IPO price or NAV.

Every reit situation is different, some may have rental revision for every 2-3 years, so if the rental being revised upwards, then there is positive contribution to the profit made.

To make reit price steady, the only and effective way to to have consistently earning power and may be some little improvement in income. (it is not possible to see earning of reit double or triple over short to mid-term, without expanding through borrowing or private placement.

If a reit is earning steady 7% over the long term, it is very unlikely to see its market price drop become 14%, as people will already snap up if the yield become higher and higher. It is no brainer for anyone to sell the reit which is yielding 14% and still able to earn steady and consistently over long period of time.
Except for some special circumstance like financial crisis which lead to risk of reit facing (like cannot find tenants, refinancing facilities is totally shut like what happen during 2008 etc) or FD interest rate become 7% which make 7% reit become non-attractive.

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.

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.

STAREIT can be consider. Reason: LOT 10 & Starhill have sold to starhill global singapore, now their hand holding big money, may have suprise news.

I love Reit too

How they play the hotel & how the result is the real surprise. We never know. That what I mean hihi 

already know mean not a surprise,
surprise mean we dont know yet. haha

We never know the future. Maybe new concept of hotel or resident? etc, etc.
The question. Stareit with new hotel business beneift will be higher than the LOT10 & Starhill or not?

Personally, I will sit out the IPO and wait the market price to adjust itself and see how afterwards.
As 6.x% is not attractive enough.

IPO is rather weak across lately. So I don't expect market to trade at premium to its IPO especially consider that it only carries 6.3% as you mentioned.

Just my personal view.

I knew roughly some in my memory.

Axreit start off around 1.50-1.60, if not mistaken, this can't remember accurately
Qcapital around 0.8x-0.90
Amfirst 1.00
Stareit around 1.02 or 0.99, forget a bit already
Atrium 0.99 or 1.00.

I stand for corrected as this is somehow can straight away retrieve from my memory one.

But Sunway Reit probably may start off with a few cents premium if IPO is good and manage to find many cornerstone instituitional investors to support it. As Singapore investment arms, PNB, EPF and some insurance fund also potential to become the cornerstone investors of it.

I forsee may be start off with flat in IPO and a little few cents above IPO, then as time goes on, probably ease off to around 7% or more yield unless the reit can improve their earning and DPU and show high potential in rental revision upwards afterwards.

Just my personal opinion though.

Speaking of the Japan Resort that Starhill mentioned to buy, I don't see any official announcement on the proposed acquisition at Bursa website.
Is it really coming?

No special dividend lar, already mentioned as well as stated in the rationalisation proposal.