More costs likely as Sabana's Trustee and manager agree to Quarz's EGM, observers say

https://www.theedgesingapore.com/news/reits...m-observers-say

IREIT's CEO will jump ship to sponsor. Hmm...

https://links.sgx.com/FileOpen/IREIT%20Prop...t&FileID=808813

Capitaland India Trust is as good as junk...

https://links.sgx.com/FileOpen/Fitch%20Assi...t&FileID=808998

Keppel DC REIT to acquire Japan data center, fully-funded by JPY debt. Leverage to increase to almost 40%.

https://links.sgx.com/1.0.0/corporate-annou...b2616b259832c0e

Hehe if Donald Trump is elected, Fed MUST raises rates lol

His policy of tariffs and propensity to introduce frictions here and there will cause rates to go up

I have had enough time with REIT's "extend and pretend" strategy... lowering rates will just misdirect the managers to borrow more and when another round of rate rise occurs, either do EFR or private placement to dilute existing shareholder's share, or sell assets (sometimes fire sale below market value).

Either way the winner will not be the REIT's long term holders... Looking at the compensation plan already provides some hints: acquisition and divestment fees each time an asset is bought or sold...

This post has been edited by TOS: Jul 11 2024, 08:28 AM

Index funds... VOO, QQQM

I in the midst of selling some of my active holdings and slowly build up my VOO and QQQM stakes.

Finance should be simple, not complicated... And simple means low to no fees, easy to understand, interests well-aligned with unitholders... And since adjusted for fees, no active fund managers consistently beat the index... added to that, Vanguard funds are owned by its own investors.

As Warren Buffet says at Berkshire Hathaway’s annual meeting in 2006



A good book to pick up: https://mphonline.com/products/trillions-ho...r-9780241987971

This post has been edited by TOS: Jul 11 2024, 12:07 PM

Dasin Retail Trust EGM update: https://links.sgx.com/FileOpen/DASINRT-Upda...t&FileID=809674

Sabana REIT's EGM circular and details are out: https://links.sgx.com/1.0.0/corporate-annou...fe5fc0d6fc9c498

EC World's onshore facilities restructured

https://links.sgx.com/FileOpen/ECW_Completi...t&FileID=810091

But well, they are just kicking the can (full of worms) down the road...

Woah Dasin's internal rivalries intensified: https://links.sgx.com/FileOpen/DASINRT-Rece...t&FileID=810199

Earnings season begins on SGX!

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Sabana REIT's results available: https://links.sgx.com/1.0.0/corporate-annou...361be532af4ca5a

Trustee update you on how much fees have been sucked

https://links.sgx.com/FileOpen/Trustee%20St...t&FileID=812601

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Hutchison Ports Holdings Trust results: https://links.sgx.com/1.0.0/corporate-annou...a8ab7178af62e1c

MLT results: https://links.sgx.com/1.0.0/corporate-annou...171dd1934038db4

FCT 3Q 24 business updates: https://links.sgx.com/FileOpen/FCT_SGX_Anno...t&FileID=812718

OUE REIT results: https://links.sgx.com/1.0.0/corporate-annou...fa11f025a73a16d

Digital Core REIT results: https://links.sgx.com/1.0.0/corporate-annou...615a8259d2d21f6

As expected, the REIT lobbyists complained to cheng hu for help

MAS proposes simplified leverage requirements for S-Reits, imposes minimum ICR threshold of 1.5 times

https://www.straitstimes.com/business/mas-p...old-of-15-times

40 to 45 and now 50%... the funny thing is they still think “A leverage limit of 50 per cent, together with the ICR floor, will continue to foster prudent borrowing by Reits,” said the authority.

This post has been edited by TOS: Jul 25 2024, 10:02 AM

Internalization is one way. And it has to be done right from the start, not sponsor throwing in properties they wanna offload to reduce their own leverage or save themselves.

Second thing is amendment of the trust deed itself. Trustees should really care about unitholders, not just sucking trustee fees and point fingers at others (Sabana's fiasco illustrate this well enough). The renumeration system also needs a big overhaul. Asset acquisition and disposal should not incur any form of charges whatsoever to unitholders. It makes no sense; ever increasing asset size financed by increasing leverage and frequent EFRs/private placements is a recipe for disaster for equity holders.

The trust should clearly state whether it is growth-oriented or just for stable income. Growth-oriented ones surely will be riskier with higher leverage ratios and aggressive if not tactical borrowings to engage in property flipping. But those stable income ones should be "closed" trust with almost no growth. If the properties are good, they will appreciate, raising the trust's NAV, and rent can grow as well assuming the capitalization ratio remains constant. Closed trust managers shall spend time caring about limited number of good properties rather than acquiring new properties under the belt to enrich themselves.

Ultimately the principal-agent problems will have to be solved right from the start. You pay the managers ONLY if the DPU is growing and leverage is under control. Managers must understand that managing income-oriented trusts are "boring", unlike typical companies. You want profits... not growths... There is no point growing if that very act will sink the ship itself...

Haha Fed cut rates so they can borrow more...

Well, a group of investors can pool together money to buy properties and list it as REIT on an exchange. The group of investor can be anyone, not necessarily large property firms.

To be fair, if the properties are really good, the cornerstone investors wouldn't list the properties on an exchange in the first place. So the IPO purpose should be scrutinized properly. Is it because the sponsors are desperate for money or is it because the properties are really shitty that the sponsors wanna get rid of them? (In the second case, the i-bankers will have to spend a lot of effort window-dressing the portfolio of properties...)

Kiasu kiasi culture in SG probably creates a fertile ground for investors to count on "sponsors" to support them when they themselves are being ripped off by the sponsors.

-------------------------------

REITs are a product of financial engineering. If the properties stay on the books of the sponsors, the ROA, ROE etc. of the parent company will be dragged down because the denominator of the metrics (assets, equities etc.) will be large, so the "sponsors" throw them into another vehicle (called REITS) to allow the parent company to be geared/leveraged further and help "massage" the numbers.

The whole financial engineering scheme is actually called "opco-propco": https://gab-commentary-pdf.s3.us-east-2.ama...hrisMarangi.pdf

https://www.investopedia.com/terms/o/opco-propco.asp

MIT results: https://links.sgx.com/1.0.0/corporate-annou...ef64cd14a4660f2

Suntec REIT results: https://links.sgx.com/1.0.0/corporate-annou...f28e30a27d83952

ESR continued to be barred from voting in Sabana's EGM: https://links.sgx.com/FileOpen/Trustee%20St...t&FileID=813009

First REIT results: https://links.sgx.com/1.0.0/corporate-annou...9a90d25b6b32369

Keppel DC REIT results: https://links.sgx.com/1.0.0/corporate-annou...b7480c1d4a97a61

Capitaland Ascott Trust results: https://links.sgx.com/1.0.0/corporate-annou...aaa107c92706c45

EC World's AGM Q&A: https://links.sgx.com/FileOpen/ECW_Response...t&FileID=813164

Once the darling of all S-REITs... Parkway LIFE REIT results: https://links.sgx.com/1.0.0/corporate-annou...103e41325cdec3a

KIT results: https://links.sgx.com/1.0.0/corporate-annou...05db98225ae08c9

Hmm let's see...

The charges will be 50 SGD per hour for a 2-hour analysis. 100 SGD in total then.

But early birds get a 50% discount, so you only need to pay 50 SGD.

If you agree with the terms and conditions, you may deposit the money into my DBS SG SGD account, the account number will be private-messaged to you shortly.

I am a nice businessman eh

Gotta recoup my PhD investment costs...

That said, looking at the figures here you wouldn't touch KIT in the first place: https://www.kepinfratrust.com/investor-info...ancial-results/

The only thing to buy on SGX are DBS, UOB and OCBC. Nothing else... (This piece of advice is free of charge, no worries. )

Capitaland India Trust results: https://links.sgx.com/1.0.0/corporate-annou...6f961f4802746a4

LMIRT results: https://links.sgx.com/1.0.0/corporate-annou...be9fa2d9dd6adfb

YTL Starhill Global REIT results: https://links.sgx.com/1.0.0/corporate-annou...61e9fade6cdc4ab