M Reits Version 7, Malaysia Real Estate Investment
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 Jan 1 2019, 08:30 AM
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#1
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Senior Member
1,205 posts Joined: Feb 2006 From: Kuala Lumpur  
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Happy New Year guys!
I'm starting a blog, containing my research that I've been doing over the years. I kicked off with a post on Sunway REIT, which is one of my favourite Malaysian REITs. https://reality-inversion.blogspot.com/ |
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Jan 1 2019, 08:35 AM
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#2
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Senior Member
1,205 posts Joined: Feb 2006 From: Kuala Lumpur
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QUOTE(frankliew @ Dec 31 2018, 10:30 AM) Anyone know what is SUNREIT Perpetual Bond? In Singapore, the REITs commonly issue perpetual bonds once their debt levels approach the 45% limit set by MAS. This is because from an accounting perspective, perpetual bonds are recognized as equity, not debt. Issuing perpetual bonds will result in the gearing levels falling without raising equity through rights or private placement, allowing the REIT to take on more conventional debt and keep growing. Since SunREIT's gearing will rise above 40% after this recently announced acquisition (SC's limit is 50% for Malaysian REITs), they are probably looking to issue perpetual bonds to lower the reported gearing levels, so that they can keep growing. This post has been edited by Havoc Knightmare: Jan 1 2019, 08:36 AM |
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Jan 5 2019, 03:15 PM
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#3
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Senior Member
1,205 posts Joined: Feb 2006 From: Kuala Lumpur
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QUOTE(CheesePie @ Jan 4 2019, 06:07 PM) That is the unfortunate part especially I am looking to create a passive income portfolio with future capital gain. Its the very reason why I look forward to June for the airport REIT. Perhaps it can be a good alternative. MREITs have always been expensive by regional standards, made worse by the withholding tax. I expect the airport REIT to trade at very low dividend yelds since its going to be a prime asset. More so when the government needs to raise as much cash as possible. Wouldn't be surprised if it trades at similar dividend yields or valuations as KLCC.In other word, can I say that SunREIT doesn't seem to have an attractive DPU for mid-term? By the end of the day, I see it as an increased of gearing unofficially. With respect to SunREITs perpetual bonds, I personally prefer that they issue perpetual bonds because the alternative is raising new equity through a rights issue or private placement which is going to be dilutive for existing unitholders. It may raise their interest cost, but it doesn't dilute the DPU for existing shareholders and allows them to acquire more assets in future. And also, just because they announced a plan to issue perpetual bonds doesn't mean that they are going to do it immediately. Their gearing at 43% is still manageable. They may only do it once they acquire new assets that will further raise the gearing, limited the impact on DPU. This post has been edited by Havoc Knightmare: Jan 5 2019, 03:19 PM |
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Jan 12 2019, 01:41 PM
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#4
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Senior Member
1,205 posts Joined: Feb 2006 From: Kuala Lumpur
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QUOTE(cherroy @ Jan 11 2019, 06:25 PM) Because they are too few sizeable Mreit available, while there is great demand from investment funds typically pension funds, unit trust income funds etc that aim for stable income asset (like reit). Yes what we need are more quality and large REITs on the market. Also unfortunately, the accounting methods that some of these institutions use indirectly drive demand for REITs. And also withholding tax imposed on dividends. Until these factors are addressed, MREITs will be less attractive compared to SREITs.So with higher demand, few supply, hence we always saw those large stable reit most of the time are trading at a premium. Mreit size and liquidity are still relatively too low. This post has been edited by Havoc Knightmare: Jan 12 2019, 01:41 PM |
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Jan 31 2019, 07:37 PM
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#5
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Senior Member
1,205 posts Joined: Feb 2006 From: Kuala Lumpur
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One of the few malls that is outperforming despite the slower retail environment in KL.
http://mrem.bernama.com/viewsm.php?idm=33720 |
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Feb 11 2019, 11:22 PM
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#6
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Senior Member
1,205 posts Joined: Feb 2006 From: Kuala Lumpur
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QUOTE(alexlee9988 @ Feb 11 2019, 11:05 PM) Hi Sifu all , There is a massive glut of office space in the Klang Valley and their properties are not in prime location. Refer to the link below-I'm a newbie in Reit investment , recently i analyze property portfolio of Axis reit , I found some of their office buildings have average occupancy rate of around 20%++ ~ 50%++ example : 1.Quattro West : 50.15% 2.Axis business park : 59.32% 3.Axis business campus : 28.79% Need some advice : 1. What is the impact to their net income with such occupancy rate ? 2. What is the factor that cause such low occupancy rate ? 3. What is the optimum occupancy rate ? ex : > 80% consider good ? Other factor to consider ? What you guys opinion on this ? Is analyze occupancy rate a good metric to use ? Thank you. https://themalaysianreserve.com/2018/01/18/...-says-cbre-wtw/ When there are so many new and nicer options out there, companies who want to rent are spoilt for choice. I personally would avoid investing into office related REITs in KL due to declining rents. Even rents around KLCC has been sliding. And yes, occupancy rate is a very important metric to consider since it indicates the health of the property. If a property is at close to 100%, this means that demand is strong and the owner has greater leverage to raise rents. If the building is only 50% occupied, existing tenants can easily ask for lower rent when it comes to renewing the tenancy since they can always threaten to walk away. I would personally consider an occupancy rate of more than 90% to be good. |
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Apr 13 2019, 05:08 PM
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#7
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Senior Member
1,205 posts Joined: Feb 2006 From: Kuala Lumpur
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QUOTE(frankliew @ Apr 7 2019, 03:05 PM) Do you think sunreit apply for Perpetual Bond 10B will bring high risk to the company? QUOTE(markedestiny @ Apr 7 2019, 03:05 PM) The author is quite misinformed as there are many companies in Malaysia and Singapore that have issued perpetual bonds with no negative impact on their stock prices or business. Some have done very well such as AEON Credit. But in any case, I have sources that say the Sunreit perpetual bonds are unlikely to happen for now for unrelated reasons.This post has been edited by Havoc Knightmare: Apr 13 2019, 05:09 PM |
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Sep 14 2019, 03:40 PM
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#8
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Senior Member
1,205 posts Joined: Feb 2006 From: Kuala Lumpur
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QUOTE(moosset @ Sep 13 2019, 04:24 PM) do you guys also diversify and invest in US or Japan REITs? The unfavourable tax regimes can make the net dividend yields of these markets look pathetic. Don't be fooled by their gross dividend yields. |
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Oct 13 2019, 11:43 AM
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#9
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Senior Member
1,205 posts Joined: Feb 2006 From: Kuala Lumpur
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A simple Google search will tell you that office occupancy rates are still falling in the Klang Valley. Less than 80% currently. Rental rates have been falling as a result. My company which is located near KLCC has been able to negotiate lower rent every time the lease is up for renewal. Office REITs are going to bleed slowly for the foreseeable future.
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Oct 14 2019, 03:02 PM
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#10
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Senior Member
1,205 posts Joined: Feb 2006 From: Kuala Lumpur
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Bought KIP REIT ahead of the Budget 2020 announcement since B40 are getting some goodies. Also, the dividend will jump this coming quarter if one bothers to monitor the newsflow surrounding this REIT.
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Dec 27 2019, 12:41 PM
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#11
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Senior Member
1,205 posts Joined: Feb 2006 From: Kuala Lumpur
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QUOTE(ywliang96 @ Dec 27 2019, 09:44 AM) How REITs increase from their share price actually? It would be very helpful to view REITs in the context of conventional real estate, except that a REIT as listed real estate. Let us assume you own a property, say a shop lot in a popular area. If you are able to raise rental everytime your tenancy contract is renewed, it follows that the market value of your shop lot should increase. This is the equivalent of a REIT share price going up, since rising dividends from rising rental income means higher yields for the owner. Most of the REIT's keeps increasing like never before, and I'm scared to enter actually lol is it based on the occupancy rate or the buyer/seller demand in shares? On the other hand, if you have a bad shop lot, you might struggle to find replacement tenants should your existing tenant leave. You might even have to lower the rental to keep the tenant there. Naturally, your property's market price should fall since the rental income is declining. Share price of the REIT is the equivalent of market price of a property. The dividend yield of a REIT is then the equivalent of net rental yield. Consider if your shop lot's rental doubles over a period of 10 years, and the property price doubles as well. Has the valuation changed? Not really, since the gross rental yield remains unchanged. Likewise, you should view the blue chip REITs that have appreciated so much over the years, because the rental income of their underlying assets have grown similarly. Malls like Pavilion, Sunway Pyramid and Mid Valley have been able to raise the rental rate consistently while maintaining full occupancy, which leads to rising dividends over years, hence their strong share price performance This post has been edited by Havoc Knightmare: Dec 27 2019, 12:45 PM |
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Jan 18 2020, 12:33 PM
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#12
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Senior Member
1,205 posts Joined: Feb 2006 From: Kuala Lumpur
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QUOTE(Havoc Knightmare @ Oct 14 2019, 03:02 PM) Bought KIP REIT ahead of the Budget 2020 announcement since B40 are getting some goodies. Also, the dividend will jump this coming quarter if one bothers to monitor the newsflow surrounding this REIT. As predicted, KIP has been one of the top performing REIT in bursa over the last few months, but no one has noticed. |
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Jan 23 2020, 08:21 AM
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#13
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Senior Member
1,205 posts Joined: Feb 2006 From: Kuala Lumpur
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QUOTE(AthrunIJ @ Jan 22 2020, 06:34 PM) If only alaqar move higher xD Bought alaqar immediately at 1.33 when the BNM news came out. Its slightly undervalued at the moment so am grateful that the price didn't move up already. The DPU will only jump in 3Q 2021 when all their debts are due for refinancing next year at much lower interest rates.Sadly no more funds to buy more 😠|
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Jan 23 2020, 11:14 AM
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#14
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Senior Member
1,205 posts Joined: Feb 2006 From: Kuala Lumpur
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QUOTE(AthrunIJ @ Jan 23 2020, 10:55 AM) ðŸ˜.... I'm very thankful that Malaysian investors are not smart and savvy enough to spot these opportunities and drive prices accordingly. It creates long windows of buying opportunity. Sunway REIT's interest cost will drop immediately due to them relying heavily on short term floating rate debt, so their DPU will see a jump in the coming quarters, while other REITs will only see a similar move when their debts mature gradually. Yet the market price has not reacted.O Well, wait for funds to slowly invest. Surprisingly today the reits didn't increase by much. This post has been edited by Havoc Knightmare: Jan 23 2020, 11:16 AM |
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Feb 12 2020, 11:22 AM
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#15
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Senior Member
1,205 posts Joined: Feb 2006 From: Kuala Lumpur
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QUOTE(bmwcaddy @ Feb 12 2020, 10:38 AM) Any MQREIT investors here? would love to hear some insights from sifus Office market in Klang Valley is struggling with major over supply and rental rates have been falling, with no bottom in sight yet. That would explain the falling dividends and share price. A simple google of the KL property market will show you-https://www.propertyguru.com.my/property-ne...ly-woes-worsens |
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Feb 12 2020, 04:35 PM
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#16
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Senior Member
1,205 posts Joined: Feb 2006 From: Kuala Lumpur
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Incoming rally for MREITs..!
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Feb 12 2020, 05:12 PM
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#17
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Senior Member
1,205 posts Joined: Feb 2006 From: Kuala Lumpur
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QUOTE(bmwcaddy @ Feb 12 2020, 04:49 PM) What happen? BNM governor hinted of incoming interest rate cuts. Banks will be battered but it's fantastic for REITs. |
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Feb 12 2020, 07:45 PM
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#18
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Senior Member
1,205 posts Joined: Feb 2006 From: Kuala Lumpur
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QUOTE(bmwcaddy @ Feb 12 2020, 07:28 PM) Wah where did u all get the news so fast? https://www.theedgemarkets.com/article/bank...poses-new-risksIt's in the news, I rushed to buy Al Aqar after the lunch session opened. |
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Feb 13 2020, 10:20 AM
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#19
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Senior Member
1,205 posts Joined: Feb 2006 From: Kuala Lumpur
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QUOTE(prophetjul @ Feb 13 2020, 09:33 AM) Al Aqar's DPU seems to be dropping quite rapidly across the last few quarters? I suspect the data that you referred to might be distorted due to them moving from a semi-annual distribution to quarterly distribution in 2018? In any case, the DPU did drop somewhat (but not massively) in 2018, since they were forced to refinance their entire debt at the worst possible time in 2018, when global interest rates and bond yields were at the peak. Prior to that, they last refinanced their debt in 2013 when interest rates were still quite low thanks to the massive QE by the Fed. What attracts you to it? In terms of revenue income and NPI, their performance has been quite flattish/boring. Their rental contracts are long term with some annual rental escalation, so revenue-wise they are not too different from Parkway Life. It seems to be volatility on their costs, which includes the interest costs that caused the volaility in DPU. Fortunately, they only refinanced their debt for 3 years in 2018, so they are due to refinance it mid of 2021 and interest rates today have moved sharply lower since 2018. We should see a nice one-off DPU bump in 3Q 2021. It's not an exciting investment, but I see it as a 'safe haven' in the M-REIT space. I am betting that some fund manager out there will realize this too, and buy in eventually.  |
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Feb 13 2020, 11:12 AM
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#20
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Senior Member
1,205 posts Joined: Feb 2006 From: Kuala Lumpur
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QUOTE(prophetjul @ Feb 13 2020, 10:38 AM) 5116 ALAQAR AL-AQAR HEALTHCARE REIT I believe the number is distorted due to the final semi annual dividend being paid in early 2018. There's not been any significant change in earnings as you mentioned. Quarterly rpt on consolidated results for the financial period ended 31/12/2018 Quarter: 4th Quarter Financial Year End: 31/12/2018 Report Status: Audited Submitted By: Current Year Quarter Preceding Year Corresponding Quarter Current Year to Date Preceding Year Corresponding Period 31/12/2018 31/12/2017 31/12/2018 31/12/2017 RM '000 RM '000 RM '000 RM '000 1 Revenue 25,896 24,777 102,649 99,648 2 Profit/Loss Before Tax 44,965 38,879 92,292 86,154 3 Profit/Loss After Tax and Minority Interest 44,047 37,979 91,374 84,645 4 Net Profit/Loss For The Period 44,047 37,979 91,374 84,645 5 Basic Earnings/Loss Per Shares (sen) 6.04 5.21 12.54 11.62 6 Dividend Per Share (sen) 1.93 0.00 9.58 7.55 Quarterly rpt on consolidated results for the financial period ended 30/09/2019 Quarter: 3rd Quarter Financial Year End: 31/12/2019 Report Status: Unaudited Submitted By: Current Year Quarter Preceding Year Corresponding Quarter Current Year to Date Preceding Year Corresponding Period 30/09/2019 30/09/2018 30/09/2019 30/09/2018 RM '000 RM '000 RM '000 RM '000 1 Revenue 26,718 25,623 79,432 76,753 2 Profit/Loss Before Tax 16,128 15,140 47,314 47,327 3 Profit/Loss After Tax and Minority Interest 16,128 15,140 47,314 47,327 4 Net Profit/Loss For The Period 16,128 15,140 47,314 47,327 5 Basic Earnings/Loss Per Shares (sen) 2.19 2.08 6.43 6.50 6 Dividend Per Share (sen) 1.86 1.95 5.84 7.65 2018 was a good year. But the last few quarters to 3QTR, DOU dropped from 7.65 to 5.84. That's a 24% drop! Not too sure WHY since the net earnings did not drop? |
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