I have just read the prospectus... not too bad lar. Let me summarize it for you guys here...based on RM 0.90 institutional price

1. Expected DY = 6.5% based on 100% payout
2. Gearing Ratio = 20.1% (debt/asset), ~28% (debt/equity)
3. Gross Rental Yield =10.3%
4. Net Rental Yield = 6.3%
5. Rental Revision CAGR = ~2-3% per year
6. Loan : Average 4% interest rate based on KLIBOR + 0.8%-1.2% revolving loan (means can change anytime)
7. Occupancy : Mall : 97.7%, Office : 41.4%
8. First Refusal right - Fahrenheit88 Mall, Pavillion Extension & USJ Mall(mana ini? )

Red Flags
- Performance Fee of 5% (this has not been practiced by other REIT) to be implemented >2013
- 5.5% of tenancy expiring in 2011 with average rental of 19.92 psf & 65% of tenancy expiring in 2013 with average rental of 18.12 psf. These will follow the reduced new rate of ~16.90-17.00, so will have -5%-7% impact on total rental income.
- Office building is currently only 41.4% rented out, and at 5.77 psf. In 2013 66% of tenancy with average of 5.97 will be revised to about 5.77-5.80, expected to have slight impact on incomes.


Comment/Verdict
Reasonable dividend yield, very good gearing ratio still have room to grow. Have good future growth in new acquisition. Starting 2013 if performance fee kicks in and rental revision is downwards would have 5%-10% impact on dividend yield unless the manager is proactive at raising rate and/or delay the performance fee. The manager opt to have performance fee in units, so it is a good sign, they are inline with the shareholders.

Based on the above and also relative to peers (CMMT, SUNREIT, STARHILL GLOBAL) this reit has a potential to gain 15%-20% after IPO.

Now we know why Quatar Investment want to sell pavillion mall, because the rental rate is actually starting to reduce slowly after 2009 and will impact in 2013.

Any comments?

This post has been edited by gark: Nov 14 2011, 02:15 PM

If you are expecting the returns like An Long one, then no comment lah

This post has been edited by SKY 1809: Nov 14 2011, 02:08 PM

Its will become another UOA

reply at reits thread
PAVreit is cater for higher end customer, majority cstomer go there only window shopping not buying so..... my view is the spread of crowds are good but the spending power of it's crowds depend on the loaded ppl. not all the tenants there enjoy good profits, this is from my observations and my lousy 2 cents. JUST MY VIEW.

Not really, I find the REIT to be reasonable, going to apply the IPO and cabut before 2013 if not much progress...

This post has been edited by gark: Nov 14 2011, 02:18 PM

If you buy , then you are the co owner of the Complex.

Do not forget once MRT is in place, another boom could be coming for this complex.

And the tourists spend 22B in Malaysia, Where they usually go

Already got good public transport nearby, I go to Pavillion via Monorail stop at BB Plaza. Like I say, compared to CMMT (BB Plaza) & STARHILL Global (Star Hill, Lot 10), there are currently giving ~5.5% yield. So if Pavillion REIT is giving 6.5%, then the unit price will appreciate until the yield is similar, so 15%-20% capital gains. Just that we have to beware in the multiple things happening in 2013...

Not much impact on the Super rich one.

Even in Europe or USA, super rich items are doing well like perfumes and so on.

Even smart phones are selling like hot cakes there.

Petaling Street might be impacted.

Well it depend in the manager's skill if he can raise rental rates to offset the loss of higher rental once the higher rent tenancy contracts expire... so got 2012 to see the performance of the managers...

Certain co like Apple , Sony and many and so on, just want to create their Brand Awareness there aka Advertising .

I doubt they move to Petaling Street in the future.

I thinking of going in for the IPO to sell upon listing, I do not see much upside to PAv, to be honest..

MRT is a good point. I believe price will shoot up in 5-10 years time in that golden area. Imagine how much KLCC price(land + rental), still a big gap.
Pav may inject F88 in near future, as its gearing is still low for now.
The competitor for Pav is Starhill there, for the rich. And it's obvious who's the winner there.
So it all goes down to the management team now, which we still not sure how good/bad they are. From the way they manage to continuously organizing huge events frequently, and the way they able to keep the place neat and clean when nearby all dirty during the countdown days with fireworks, I think their management team is not too bad.
I'll apply some to try my luck.

If they do not clean the places, Apple and Sony would run away, just joking only.

Anyway , high chance of Capital appreciation in years to come.

Berjaya Square is a good example.

This post has been edited by SKY 1809: Nov 14 2011, 05:11 PM

When would we know the result if get the Pavillion REIT IPO ?



This post has been edited by ronnie: Nov 14 2011, 11:39 PM

hi, this is the first time I'm here and would like to ask some question....noob in all this as not studying in business related course...

I will take the Pavillion thing for example for easy reference...
assume its 88cents per unit...
how much unit will I be able to buy with rm2.4k??

and assume that they are paying 1.5cents dividen per unit..what's my profit???
I'm planning to learn all this and invest in the future...
Thanks to all sifus that are reading it...=)

unit = share.
so it's simple: 2400 / 0.88 = 2727 unit.
you will need another RM10-40 as fees depending how much your broker charges you.

---

Added on November 15, 2011, 12:23 amI checked and found out that both CMMT and Sunreit trades below IPO price for their first few days.
And both CMMT and Sunreit IPO price gave around 7.5% yield.
So now this Pav reit yield is the lowest at 6.7%. Not pretty.

This post has been edited by yok70: Nov 15 2011, 12:23 AM

why not we change to aim MALTON!!? Since they own 3X% for the PAV if not mistaken.... could be reward to malton shareholder ?

So, i do need to find a broker to buy the unit....broker from any bank also can???
I'm still a UNI student and with some savings....Will they allow me to open an account and buy it??

For a starter how much of money do I need to prepare for investment in REIT??
and for CMT and Sunreit, what's the risk and is it advisable that after buying it, I just keep it for years without doing anything???
Thanks addedon for answering my question...

Malton is not Reit. They are totally different ball game woh.

---

Added on November 15, 2011, 3:56 amIt's good to start learning investment as young as possible. Support!
REIT is very good instrument to begin with in stock market. You may google on REIT, and simply click some links and read them to understand more about REIT.
And here's the most commonly use Malaysia REIT website with news and info on reits. And you can also find links to official website from almost all of our local REITs in its right side.
http://mreit.reitdata.com/

To put it very rough, buying REIT is like buying a portion of some properties. And then every few months, you collect the rental fees from your investment in the form of dividends (they don't call it dividend for REIT, they call....something like distribution or sth).

And you asked, do we need to monitor it frequently? How frequent?
For now, I think you can answer it by yourself after some understanding. Right? Now you know let say you bought CMMT, one of the properties you partly own is Sungai Wang. If one time you find out that Sungai Wang has lots of un-rented slots and the crowd is getting less, you know your investment might be in trouble. Or, you read in news that it's on fire (such as the Empire Mall in Subang Jaya few weeks ago). You may consider to re-consider if to continue holding it or sell it. Therefore, the first thing is to look for is what are the properties that particular REIT has. And are you happy to "buy" those properties? Are you happy with the rental fees? Are you happy with the capital gain (share price increment)? etc etc. Everyone has their own concern.


You may go ask around brokers for their charging fees. CIMB, Maybank, OSK, RHB, Public Bank, Jupiter, Kenanga....there are a lot of choices for you to choose from, it all depends on your needs and their requirements.

Good luck!

This post has been edited by yok70: Nov 15 2011, 04:03 AM

Anyone have any idea on Arreit price drop?