i see, thks to both of your advice, will take cash payment

I was reading up on YTLREIT and came across this analysis of impending new units on YTLREIT. Keep in mind current DPU is around 8 sen/share. Also keep in mind this is posted under "Comments" section....

Source

The primary objective of the REIT manager is to ensure the Placement Units are done at optimum prices which reflect the fundamental value of YTLREIT.

The announcement in changing the revaluation of investment properties from triennially to once a year and seeking for additional six months will provide more time to conclude the exercise are steps in the right direction.

The objective is to raise up to RM 800 mil with increase in fund size from 1,324 mil units to maximum of 2,125 mil units. The placement price will be around RM 1.00 per unit if fund size were up to maximum to raise the RM 800 mil proceeds.

In determining the placement price, if you use the current market price as a yardstick, it is at a discount of 26.7% to its current NAV. It is wide gap.

The earning per unit (EPU) up to 3rd Q of FY 14 was 3.71 sen per unit, if the 4th Q EPU is similar to 3rd Q at 1.19 sen per unit. Then the P/E of 18.88 (92.5/4.9) is relative high. Other REITs are in the region of 10 to 14.

The dilution of EPU and income distribution per unit (DPU) after placement exercise will depend very much on place price and YTLREIT future earning potential.

At RM 1.00 per unit, 800mil new units will be issued to raise the required RM 800mil. Repayment of loans with the placement proceeds will reduce interest charges. The total borrowings will reduce by 51% from RM 1.58 bil to RM 0.78 bil. Interest saving per quarter can be around RM 9.24 mil, per annum will be in the region of RM 37 mil which is quite substantial.

Assuming the exercise is completed by end of FY 14 and its FY15 PBT mirrors previous year 3Q result at RM 16.6 mil, annual PBT plus interest saving will come to RM 103.4mil (16.6x4+37). For simplicity, PAT say around RM 100mil, EPU will be 4.7 sen per unit. Annualized depreciation charge is around RM 65mil, which work out around 3.1 sen per unit. Income distribution per unit will be around 7.8 sen per unit.

Based on the above conservative approach of no improvement in earning with maximum placement units to raise the RM 800mil, the dilution impact is not substantial.

A revaluation of unit price is possible if there is a visibility of better earning ahead, especially if the coming 4Q shows better result. This revaluation will improve the placement price and reduce the total number of new units to be issued for the placement exercise.

How to have discount of 26.7 while the current orice is only .915?

The discount is calculated against the revised NAV which is around 1.20.

for office reits with high gearing.. news not so good...



This post has been edited by AVFAN: Jun 4 2014, 06:04 PM

http://www.theedgemalaysia.com/business-ne...-threshold.html

Will this affect CMMT in any way?

Hopefully CMMT can buy over Queensbay Mall from CapitaLand after Capitamall Asia is delisted

This post has been edited by patling63: Jun 6 2014, 07:12 AM

interesting to see sunreit recovering recently, now at 1.43-1.44.

pav, igb, cmmt, all stagnant....

IGBREIT and CMMT yielding 5.4%, u expect yield to drop lower (i.e. price go higher) meh? Crazy ar

these 2 at 5.4% yield?
6% according to this:
http://mreit.reitdata.com/

sunreit also 6%.
only pav 5.4%.

MREIT data are all GROSS YIELD before deducting 10% withholding tax

Glad to c KLCC up 15 cents to 6.60 today
Its inclusion into FBM KLCI really helps

Sunreits going up is due to the expectation of investors on the revenue to be generated from the near completion Sunway Putra Mall. Sunway said that they will renovate the Sunway Putra mall area to be as equivalent elegant as Sunway Pyramid. Upside opportunity is there.

Sunway Putra mall will have rental yields because there is a lot of functions organised in PWTC and it is nearby PWTC. A strategic location for Sunreit to invest, and a wise choice for others to buy their reits.

Just my opinion, don't take it too seriously.

There a good and bad.

Good KLCC in FBM KLCI
- is main attractive for Fund Manger which hv objective invest in FBM KLCI index
- KLCC will hold a high valuation during good time and moving forward.
- vise verse KLCC - opportunity for cheap sale KLCC


Bad KLCC in FBM KLCI
- more volatile for Fund manager to dump when Financial Crisis in the region.
- MGS 10yr Yield go up KLCC will surpress- indrect RED FBM KLCI.


juz my 2sen....

got picture? hardly for me to pass by PWTC.

Good news for mine wife ; waiting rumor of BNM will rasie OPR this july.

Saving Bullet for BUY BUY after JULY.

This post has been edited by felixmask: Jun 9 2014, 08:45 AM

thanks for info and comments.

1.45-1.46 today, almost going green for me - how can i not take it seriously!

For a long term buyer and holder of Sunreit, the rising price is not good news. Well, time to accumulate out of favor REITs such as Tower and Amfirst.

glad to see reits reviving, after the yield squeeze to less than 5% then probably is the time to offload slowly?

Actually it is positive for both.
1. Index fund managers need to buy, so there is always some buying force.
2. Lot of fund managers in the stock, provide good liquidity

Even for crash issue,
yes, stocks that with lot of fund manager may drop more quickly than a low volume stocks when crisis hit, but if look at the other way, it provides opportunity to accumulate.

I agree.

book KLCC in 555, potential revive very fast when ppl dumb.