1) What is a REIT?

A Real Estate Investment Trust (REIT) is a fund or a trust that owns and manages income-producing commercial real estate (shopping complexes, hospitals, plantations, industrial properties, hotels and office blocks).

A management company for a REIT is permitted to deduct distribution paid to its shareholders from its corporate taxable income. However, to enjoy this tax-free status, the REIT must have most of its assets and income tied to the real estate and distribute at least 90% of its total income to investors/unit holders annually

2) What are the benefits of investing in listed REITs?

Affordability
-> Investment in REITs cost a fraction of the cost of direct investment in real estate. You can start off with a minimal investment outlay.
Liquidity
-> REITs are more liquid compared to physical properties. Shares of publicly-traded REITs are readily converted to cash as they are traded on the stock exchange.
Stable income stream
-> REITs tend to pay out a steady dividend, which is derived from existing rents paid by tenants who occupy the REIT properties.
Exposure to a large-scale real estate
-> The benefits of the real estate are derived on a pro-rated basis through a REIT.
Professional management
-> REIT properties are managed by professionals who will add value for a higher yield, benefiting investors in the long run.

3) How to invest and where to buy REITs?

Similar to trading in stocks, you will be required to have a Central Depository System (CDS) account and a trading account maintained with a broker. You may buy or sell ETFs through your broker, remisier or via online trading during trading hours.

4) What do I have to pay when buying and selling REITs?

Like buying and selling stocks, investors need to pay brokerage commission, stamp duty and clearing fees.

5) What kind of returns can be expected from REITs?

Income distribution based on the distribution policy stated in the REIT's deed; and/or Capital gains which may arise from appreciation of the REIT's price.

6) Typical Conventional REIT Structure



7) REIT risk factor

Refinancing Risks
The ability for REITs to refinance their existing banking facilities are critical to their survival.
Downside Dividend Yields
>Global recession putting strain across all businesses.As a result,dividend yields will come under tremendous pressure with negative rental reversions as businesses try to cut costs.
>Increase interest cost/spreads will also affect the bottom line.
Valuation Pressure
>Property valutations will also come under stress should negative rent reversion persist.
>As valuation fall ,REIT gearing level will increase and possible breaching debt covenants.
>May require balance sheet recapitalisation.
Dilutive Capital Raising
>Dilutive capital raising may be unavoidable in the event of balance sheet recapitalisation.
>REITs with ready sponsor participation will likely to be the first to come to the market.
Market factors
REITs are also subject to market demand and supply. As such, market fluctuations, confidence in the economy and changes in the interest rates may affect REITs price.
Risk Assiociated with Borrowing
>Significant fluctuations in interest rates may have an adverse impact on the financial performance of REIT and may lower income distribution to unit holders.There is an inverse correlation between the interest rates and the distributable income to unit holders.

Other risk include :
- Vacancies following expiry or termination of leases that reduces the REIT income
- The Manager's ability to provide adequate management and maintenance
- Not Sufficient insurance cover for the real estate in case of fire
- Sudden changes in tax regulations
- Poor collection of rent from tenants on a timely basis or tenants going bankrupt
- Lower rent when leases are renewed
- Poor cost control resulting in higher operating and other expenses without a corresponding increase in revenue
- Unexpected expenses due to changes in statutory laws,regulations or government policies.
- Amendment or revocation of the present tax incentives for REIT
- Competition for tenants from other building which may affect rental levels and occupancy rates.

8) Is dividend from REIT subjected to taxes? Can we claim back the tax?

Dividend from REIT are subjected witholding tax (10%) and is not claim back-able.

9) How to select a good REIT ?



Credit to Cherroy
Latest Dividend Distribution Method
AHP : ??
ALAQAR : Cheque
AMFIRST : E-Dividend
ARREIT : E-Dividend
ATRIUM : E-Dividend
AXREIT : E-Dividend
BSDREIT : Cheque
CMMT : E-Dividend
HEKTAR : E-Dividend
IGBREIT : E-Dividend
PAVREIT : E-Dividend
QCAPITA : E-Dividend
STAREIT : E-Dividend
SUNREIT : E-Dividend
TWRREIT : E-Dividend
UOAREIT : E-Dividend

References

http://www.bursamalaysia.com/market/securi...t-trusts-reits/
http://mreit.reitdata.com/

REIT Presentation Slides from AXIS

http://www.axis-reit.com.my/images/axisrei...resentation.pdf
http://www.axis-reit.com.my/images/axisrei...ment%20Tool.pdf

Previous Thread
REIT V3
REIT V2
REIT V1

This post has been edited by Smurfs: Feb 28 2013, 12:01 PM

nice compilations, informative.

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Added on September 6, 2012, 11:57 amquestion from JamesPond.





hasil stamp and normal stamp all can bought from POS malaysia. Stamping was by hasil!! but before stamping u need to have HASIL stamp.

ref: http://www.laweddie.com/wordpress/faqs-of-...ancy-agreement/


This post has been edited by cwhong: Sep 6 2012, 11:57 AM

diff stuff.... but revenue stamp can b in diff forms.... cud b like normal stamp where u can stick..... or post office can use rubber stamp & ink on ur form....

not sure bout legal agreement, but i tot the purpose of revenue stamp is for gov to collect fee only?
as the more important element in an agreement are the signatures, not the stamp rite?

couldn't add pdf by using file attachment wonder why..

anyway Retail REIT outlook by CIMB (19th July 2012)

This post has been edited by Smurfs: Sep 6 2012, 01:22 PM

Thanks for sharing.

Thumbs up!

Hi,
Regarding the Hektar Right Issue. I just realized can trade directly on the market. The rights is trading at RM0.145 now. This is very close to the difference between current price of RM1.38 & Offer price RM1.23 = RM0.15

Since Hektar share price is following the market on down trend; it would be better to just sale the Right Issue to lock in the profit now? I can buy Hektar shares directly from market if later want to increase my unit holdings.

is above understanding correct? thanks!

Yes, you are correct.
Save the hassle to buy bankdraft and sending the form and waiting.

-TR currently worth Rm0.135, current mothershare price isRm1.39, so need to give little bit discount to the TR buyer.

BUMP for SMURFS

Checking in on RED day for REITS.

This thread should be titled M-REITs....

According to Mega Corporate Services, we can print and submit the HEKTAR Rights Subscription Form from http://www.bursamalaysia.com/market/listed...cements/1054109 instead of waiting for the document via snail mail.

You can use PosLaju to submit the RSF + Banker's Cheque/Draft directly to their 15th Floor office.

This post has been edited by ronnie: Sep 7 2012, 10:11 AM

REIT HEKTAR ... any ideas?

This post has been edited by cscheat: Sep 7 2012, 08:37 AM

What is your question actually ?

Oh...PavREIT is already E-Dividend as well.

updated .. thanks for correcting

yep.... who else not in e-divvy? b-reit will b in e-divvy as well........

i still haven't receive my rights forms through post. how come? what can i do?

It's sent via snail mail on 5 September 2012... give it a few more days. Probably would receive it next week.
Application must reach by 19 Sep 2012, 5pm

IGB reit balloting result out.
http://www.mih.com.my/index.php?page=pr533
http://www.mih.com.my/index.php?page=bs533p

I tot the form can be download via bursa? why we need to wait for the snail mail?

This post has been edited by kiwi_cream: Sep 8 2012, 11:06 AM

Both type of form can be submitted... it's up to you.

HEKTAR-TR last day trade is on Monday or Tuesday?

Last Trading day for HEKTAR-TR @ 11-Sep-2012, 5pm

I guess have to wait till Monday to find out...

didnt get Pav one hopefully this one I get...

But did read up a lot on reits in all the thread versions here... Damn good info from a lot of taikors here

I received my HEKTAR Rights Issue Prospectus + Notice of Provisional Allotment + Rights Subscription Form on 8-Sep-2012

can answer my question. Really thanks for it.

hasil stamp and normal stamp are same?
I dont think so, the hasil stamp got special note with hasil word on it.

I dont understand the whole thing about tenancy agreement. They say once it is stamp by hasil, means it is valid on this date. If you can easily buy the stamp and stick it. Means you can forge the document with the stamping yourself?

Please correct me, if my assumption is wrong.

Hasil Stamp looks like this

i thought i already reply in the first pages number 2 posts with links by professional with answer ......

HEKTAR Rights Issues Important Dates

Date for commencement of trading of the rights : 04/09/2012
Date for despatch of abridged prospectus and subscription forms : 05/09/2012
Date for cessation of trading of the rights : 11/09/2012
Date for Acceptance and Payment : 19/09/2012
Date for announcement of final subscription result and basis of allotment of excess Rights Securities : 24/09/2012
Listing date of the Rights Securities : 02/10/2012

Ronnie and CW,

Really thanks, so for tenancy agreement, even got the hasil stamp for post office, I still need to personally walk to in hasil office to stamp it for certification?


Ronnie,

You'd exercise the rights. Do you worry if your pos-express of lost or not handle properly. There is possibility your rights will totally lapse. Is there any way you can check in advance before it was actually cease?

Mega Corporate Services handling HEKTAR suggest to use PosLaju instead of PosEkspress to secure delivery.
PosEkspress is delivered to their mailbox in the Mail Room (mails do get lost in the Mail Room according to the Mega Corporate Services staff)

So, you use poslaju and it is safe enough? Do you have a way to check that your request is in order?

About hasil stamp, is my statement correct? you still need to handed to hasil for certification?

I believe it would arrived safely... maybe you can check the Banker's Draft has been cashed out or not.

Today is the last day to sell your HEKTAR-TR .... take care if you want to locked in some profit

OK thanks for your note.
Bursa shall need to improve the service here. The current practice is having too much room for mistake and causing potential financial lost.
Especially you didnt aware of the company you holding has this exercising. I cant rely on my old fashion mailbox for update. Sometime remisier just dont bother to inform you this.

CWHong,

please input if you got the answer. tQ.

Exercising Rights Issue should be similar to e-IPO application.....

every year same wishlist for budget ..... dunno this year got candy or not .....

http://biz.thestar.com.my/news/story.asp?f...19&sec=business

for my opinion, i think reit is a bit boring.
compared to my performance charting.

At this moment, most reit are over priced.....
but i still like new reit that joining the market.

At this moment how do you determine if a reit is over priced ? What makes you think the new reits thats joining the market is not already over priced ?

at this moment i only know ARreit is cheaper compared with before ex-date .....

at this moment my cost for the counter is 68 cents b4 ex

pav is over price but still flying. the index is hitting the top tier. my opinion, better save for better bargain.

great holding power ....... i noway can match urs ....... at .8 region .......

reit is just like FD while bluechips is the one the potential one to let you fly.
While normal counter as I hold never impress me before. Except glove.

Some reit net yield is only a notch higher than FD rate, just about 4-5%, to me, it doesn't seems justify to expose more risk while just getting 0.x~1.x% more than FD, which is way lower risk than reit.
While some reit price are trading more than 30-40% over its NAV.

Reit is never a FD, it is more a fixed income instrument.
Never treat it as FD, not right to start with.

Reit can go burst as well one, 2008 global crisis has lead to (overseas) reit need to fire-sale their asset to meet the debt obligation, also reit is subjected to market risk, economy and property market risk.

So far, i have not seen reit going red.
it has too many way to move around. issuing rights and fund raising just making them move ahead.
to make it simple,
FD = short term, REIT = short term?
own biz = long term, blue chip = long term?

Because property sector is doing ok and lease/rental market generally is ok.

Previously we had AHP2, so if interested google the history of it.

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Added on September 10, 2012, 5:26 pmFyi,

At the heigh of global financial crisis 2007-2008.
Axreit was Rm1.00.
Stareit was Rm0.7x

Atrium once was Rm0.6x, when one of its property lease expired and not renew in time.

This post has been edited by cherroy: Sep 10 2012, 05:26 PM

Sorry for the misunderstanding of my point. The red I referring to failure of making profit of their nature of business.

Means fail to pay div to share holder. Not the value of mother share that is functuate over the crisis.

I have never encounter of AHP....i did do some study but the trading is ridiculous low. I will have a look on AHP2 history.

REIT is like buying a property and rent out..

so as long as there are tenants paying rental , you'll get steady and predictable income.

Less hassle on dealing tenants

I also want to know about the hasil stamp, do we need to go LHDN for certification? or just buy hasil stamp in any post office will do?
Too bad, LHDN is not open on Saturday.

I received a whole stack of document from hektar Notice of Provisional Allotment
But I dont understand what it is..
Is it good or bad?
What should i do with it...

Anyone know how much stamp cost to mail Hektar Rights Issue things? (From KL to KL.. Cost for normail mail or pos laju?)

So fast Hektar give dividend again?

http://www.bursamalaysia.com/market/listed...cements/1060693

This post has been edited by kyle_kl: Sep 10 2012, 07:30 PM

Go to post office and say you want to buy Stamp Hasil RM10 will do.

So you mean no need go LHDN to certify the stamp hasil?

Ex date is before new shares given...right? lol
Congratulation for those who sell the rights buy mother shares...

You can't buy much from selling the rights anyway. It's more worthwhile to exercise the rights.

weird... Hektar Interim Dividend should be in Nov, but it announce now...
anyone know y?

Listing of Rights Securities on 02/10/2012.

No need certify 1.. Just buy and use it.

By the way, anyone knows how much $$ for stamp posting for Hektar Rights Issue (from KL to KL)?

Normal postage would be 60 sen ... Risky if it arrives late or worst get lost in transit.

Hey guys, IGB Reit can be kept for super long term right?

REIT is good to keep long term for dividends...

Hey guys,

Just to reconfirm, when is the last day trading date for Hektar-TR ? today or tomorrow ?

Just now at 5pm....

I also find it very strange... Nevertheless, get dividend = good news for investors.
I wonder if the 3rd Interim Dividend will be paid based on Mother Share + Exercised Rights ?


Does this mean no more dividends from HEKTAR for Year 2012 ?

This post has been edited by ronnie: Sep 10 2012, 10:47 PM

Thanks Ronnie.

Damn..IGB IPO unsuccessful, not in time to get Hektar rights at 1.36 some more.. mother share closed at 1.38, probably going up tomorrow ?

The new issues are for acquisition of the two new properties. I'd assume that they would want to avoid diluting DPS generated from existing holdings?

This post has been edited by Dias: Sep 10 2012, 10:41 PM

Could you explain in layman English ?

same here, getting 0 igb

I dun tin so...

If this only means we are getting the dividend in advance instead of more dividend, then not so happy lah. But ok lah, if it's for our good to avoid dilution.

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Added on September 11, 2012, 1:35 amIt means after RI, total shares of Hektar will increase, so the income will be distributing to more units of shares. Therefore, the dividend for each share will be less. Hope my English ok enough for you.

This post has been edited by yok70: Sep 11 2012, 01:35 AM

It is not strange.

It is normal for reit to give dividend prior before private placement or right issue.
As those income is generated before new shares being issued. So previous shareholders should get those income as dividend.

It is unfair for newly shareholders (from the RI) get enjoy the previous income generated prior before they subscribe the RI.

As newly dividend payout will be diluted by new shares issued.

IGB Reit IPO failed. As expected.

Only Pos Laju? Or as long as it is a courier service (where there is someone to receive and acknowledge receipt) is sufficient enough?

Yep.... Pos Laju more common and CHEAP... you can also DHL/FedEx/UPS/.... the RSF

I want to piggyback my company's corporate a/c for courier service. No need to go all the way to the post office. XD

This post has been edited by Dias: Sep 11 2012, 10:44 PM

I got my Hektar rights forms last monday. I intend to apply for excess....
Just want to ask about the chances of getting excess shares vs no of lots i apply.
Case A; I apply 10 lots of excess, how many will i get get? what are my
chances?
Case B: I apply for twenty lots lots, will i get more than case A and will the chances be higher?

I understand that if i apply for 10lots (excess) i might get only 500 shares only.

Any sifu can help? just wanna to increase my chances of getting excess...cheap ma..

it is random

u need to refer back to the RSF itself...
normally the allocation will be by this way:
1) minimize the incident of odd lots
2) pro-rated basis based on ur shareholding on the entitlement date
3) pro-rated basis based on the excess amount that u applied

For ex, there are 1,000,000 of shares left unsubscribe...
assuming u r a shareholder, not a renouncee...
ur ori holding is 1,000 & u accept ur entitlement in full..... let's say 333 (ratio every 3, get 1)
so for 1st step.... u'll get 1,000 + 333.... in total 1,333 resulting in odd lots..... thus 1st round u'll get 67 shares...
let's say after 1st round.... there are 900,000 shares left only....
so for 2nd step.... the calculation will be 900,000 * 1,000 / 450,000 (base of shareholders' ori share who still have unallotted excess applied after round 1)...... so u'll get 2k
in total u r allotted 2,067 shares.... assuming u apply 5k.... u still have 2,933 left
for step 3.... calculation is 750,000 (shares left after 1st & 2nd round) * 2,933 / 570,000 (total of unallotted excess applied shares)
u r suppose to get 3,800 but since u have 2,933 left..... u'll only b allotted 2,900 shares this round...
if there's still balance avail..... they'll keep repeating step 3 until there is no more shares to be allotted......
u'll b refunded for the 33 of unallotted shares.....

wow..... i'm




btw, to ans ur q.... yes.... u'll get higher chances in case b because when it comes to the quantum of excess applied (step 3 onwards).... the more u apply, they higher chances u'll get more allocation compare to others...... but bear in mind.... if u r a renouncee...... u'll lose big to the ori shareholders in 2nd round as u'll get 0.....

This post has been edited by fergie1100: Sep 13 2012, 03:10 PM

Question on the RSF Part 3 (Declaration). Do I need to fill up the last two bullet points (the one about resident and nominee)?

PS: Banker's Cheque = Cashier Order?

This post has been edited by Dias: Sep 14 2012, 10:29 AM

No more withholding tax for reits after Budget ?

Put a line on the last 2 bullet points .. since it says Delete
Banker's Cheque similar to Banker's Draft

wow,
thanks...
gotta read a few times..
thanks...

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Added on September 14, 2012, 3:12 pmCan pos laju it?
I thought it is stated in bold that we must sent by ordinary post or hand delivered?

This post has been edited by sheep436: Sep 14 2012, 03:12 PM

Anyone here is going to load up on IGB reits next week ?

Affin Investment Bank target price is RM1.43.

IGB reits target price.

I was advised by Mega Corporate Services S/B staff to send via PosLaju... my RSF was received today.
RM4.65 for PosLaju only (send within Kuala Lumpur) ... more expensive if send from Selangor

I'm going to queue for RM1.35 to RM1.40 only.... but I think people may "goreng" the price.
This is REIT.... price changes may not be so drastic.

expected DPU for 2013 is 6.71 sen according to the prospectus..if price go beyond 1.40 then its yield only about 4.x %

and i notice this REIT bring in many new investor...many of them still have no idea how REIT works.

Nowdays, people seems to goreng reits as well.