Easy reference chart! Based on estimated DPU 2013

Estimated 6% Gross Yield

1. IGBREIT = RM 1.12
2. PAVREIT = RM 1.22
3. CMMT = RM 1.45
4. SUNREIT = RM 1.37

Estimated 7% Gross Yield

1. IGBREIT = RM 0.96
2. PAVREIT = RM 1.04
3. CMMT = RM 1.24
4. SUNREIT = RM 1.18

Remember to minus 10% tax...

Reloaded another batch IGB REIT @ 1.17.. ABP 1.20 now...

Next reload 1.10 - 2 batches

This post has been edited by gark: Aug 27 2013, 02:47 PM

Previously i have zero reit, time to load up some.

Don't forget 90% of the ingredients for making beer need to import - barley, grains, malt, hops, etc... The high USD will not be good for them. Also our country is desperate for revenue, betcha the tax will go up.

This post has been edited by gark: Aug 27 2013, 02:57 PM

IGB REIT 1.16 now.... faster go to 1.10.

Welcome...

IGB REIT quite steady today....

Maybe the floor is found... or going to drop further?

Yup currently giving after tax net yield ~5.2%

IMHO I think that IGBREIT and PAVREIT has the best retail REIT portfolio and also with D/A <30%... for safety & future expansion.

This post has been edited by gark: Aug 28 2013, 12:45 PM

If 6% net yield ah.. IGB REIT need to go below 99.5 cents.

Might be achievable if selldown continues...

Lets say REIT A = RM 1 per unit
Net DPU = RM 0.05 per unit (after 10% tax of gross RM 0.0555) Assume 100% payout
Assume fixed rate loan, otherwise even higher rental increase required.

OPR 3%, net margin = 200 bps

If OPR raised by 0.25% = 3.25%, net margin = 175 bps

To be equivalent (net margin 200 bps) Net DPU = 0.0525, gross = 0.0583

Net rental increase required = (0.0583 - 0.0555)/ 0.0555 x 100 = 5.04%

This post has been edited by gark: Sep 4 2013, 01:45 PM

IF bond yield down, REIT will up...

but will bond yield spike again later?

What like start of tapering? Or more financing to bomb syria...

Nothing to do with loan.. in the calculation i assume loan is steady and at fixed rate. Almost all REIT is having fixed rate loan of 5 years extendable to 10 years. Actual OPR increase will not affect their cost of funds.

The calculation only considers distributable income which is >90% of net rental.

If OPR goes up, net distribution (net rental) have to go up as well, otherwise the stock will fall in price to reflect back the yield gap.

This is relation ship between yield and price, which is what we are seeing now, bond yield goes up, REIT price drop to reflect higher yield to match bond yield. Similarly OPR or interest rate is also affects the required REIT yield. If the REIT cannot grow it's earning to match the required yield, price will be sold down until the yield is reached.

This post has been edited by gark: Sep 4 2013, 05:06 PM

Govt can print money to pay those yields... can REIT do so?

If over print kena inflation, REIT also suffer as they are traded in the same currency.

So MGS : 1 | REIT : 0

No... never the same.. corporate bond yield higher than government bond. Same theory.

However AAA bonds (no default risk) is very close to MGS yield.

Bond safety is rated by independent auditors.

A-AAA = Investment grade (very small chance of default)
B-BBB = Non Investment grade (medium chance of default)
C-CCC = High chance of default
D = Defaulted

Now.. your Malton-LA is what grade?

For example Malaysia debt rating is rated A-, so the default chance is low. Public bank bonds are rated AA, so it is quite safe. Singapore govt bonds are rated AAA+, so almost 0 chance of default.

The higher the ratings the lower the interest rate.

This post has been edited by gark: Sep 4 2013, 07:07 PM

Looking at it's offer of 6% I am guessing corporate bond rating of BBB-BB.

I doubt it has been audited by rating agency....

This post has been edited by gark: Sep 4 2013, 08:27 PM

Ya they will redeem from you and pay you RM 1 per share according to schedule.

Buy in big enough lots so no need to worry about odd lots.

Axis Reit have been proposing the same thing every year after year... what makes you think this year can get?

The mat salleh CEO has always been very vocal to abolish the witholding tax for more than 5 years already...

This post has been edited by gark: Sep 7 2013, 06:14 PM

Why worry about MY 10% reit tax? Go invest over the island 0% REIT tax, 0% dividend tax.... higher yield lagi...

Yes.. it has been a laggard compared to other reit... time for it to catch up.