1 of the tenant (CIMB) at Damansara Heights not renting soon. CIMB going to have its own building at KL Sentral next year. Not sure whether ARREIT has found replacement for the buildings at there already or not.

Someone please translate this.

If Sungei Wang got REIT, I'll put in at least 500k.

this i tink is a very good advice..esp to newbie tinking to put her foot in it..test water test water.. at least got some idea on wat to look at..gearing,lease period, locality, type of property involve..

   

huh?..what's the senior tag to do with diamond mine near me?..     cannot understand..  

I think 52 weeks low thing is not suitable to be applied on Reits.
I think Reits more concern on (future) yield. So for the Arreit case, we need to first find out how much rental it could be deducted from CIMB's bye bye. 

I am looking at all the REITS in Malaysia, I noticed that most of them have very very high gearing of 60% - 90%, except for one REIT. This high gearing might trigger rights issue and private placement, then we might get dilution if the new investment is not yield accretive. Also if they are not able to roll-over the loan due to reduction of property value, the REITS might be in trouble as well.

Since when Malaysia's REIT have become so risky by being highly leveraged?  Hardly anybody see this time bomb ticking....

Anybody have thoughts on this? 

Low yield properties means lower rental yield return from tenants of that properties with high leverage
I think that's what SKY taikor meant

I'm more concerned on the degree of impact on the income due to the loss of CIMB tenancy
If it's substantial and can't get back the tenancy in time
Income distribution will be affected
Hence resulting lower DY

I just bought ARREIT @ 0.865 btw due to price drop 

A lot of international REIT are calculated based on gearing ratio which is debt/equity. If it is calculated as debt/asset, then the figure might look smaller, but it is no less risky. I use total equity rather than total asset, is because when we buy the shares we hold the equity portion and not the asset portion. 

In SG for example most of the REIT have debt/equity < 40%. So back to the question, is MY REIT over leveraged? 

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) 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? 

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

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... 

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... 

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. 

consistent divi payout
and I believe they'll fill in the gap left by cimb in shortest period
and the price seems attractive to me

---

Added on November 16, 2011, 1:38 pm

Maybe it was a business decision that went awry
Corporates do make bad decision sometimes
or due to unforseen circumstances that happened later

Maybe the selling back of the properties to the market is to free up the leverage to look for other better opportunities?

Management will only listen to experts views
they believe the magic of turning around things as advised by consultants
they never trust laymen views which in fact reflecting the realities
just like the top management at our work place
(sorry no pun intended if happened that you are a top management of a company )
or our gomen 

but somehow if they keep on making bad decisions
then it's a real concern as the DPU will definitely be affected

---

Added on November 16, 2011, 5:23 pm

me too
seems like a lot of people having the same thought 

Most likely I'll sell on the first day (if successful)
and wait for it to drop to collect and keep for divvy

   

you love to see everywhere designated... hahhaa new joke of the malaysia SC lol 

don't forget that you may also lose out on currency exchange rate each time you do a trade, whereas if you have a sump of money you plan to invest in SGX, then you do it only one time. I think the bank's exchange rate is higher than thro a money changer.

In addition to the cross border trading brokerage each time you trade, there is also a minimum S$25 or 30 per contract that you have to pay. And I think they also charge higher comm rate and perhaps GST of 7.5%.

Well if convenience is your priority, then I have nothing to say.

English lar, not building 
pent-up
adj (pent up when postpositive)
1. not released; repressed pent-up emotions
2. kept unwillingly I've been pent up in this office for over a year

pent-up   [pent-uhp]
adjective
confined; restrained; not vented or expressed; curbed: pent-up emotions; pent-up rage.
Origin:
1705–15;  adj. use of verb phrase pent up

Synonyms
repressed, suppressed, bottled-up.

For investments:
http://www.investopedia.com/terms/p/pent-u...p#axzz1i1brNE9H
Definition of 'Pent Up Demand'
When the demand for a service or product is unusually strong. Pent up demand is used by economists to describe the general public's strong return to consumerism following a period of decreased spending.  

Investopedia explains 'Pent Up Demand'
Pent up demand is often seen immediately following a recession or depression, where consumers have built their savings or held off on purchases due an the uncertain economic climate. Quite often, pent up demand accelerates the economic recovery period immediately following an economic downturn thanks to a sudden increase in consumer confidence and spending.

You pay GST only if you are a tax resident of SG. Otherwise not applicable to you.  Oh BTW SG dividend from REIT have 0% tax... that will compensate your exchange rate.