ARREIT looks very promising now.

Gogogo ARREIT! I bought too little bahhhh >_<''

Good. Let it go lower. So can have higher yield and increase chance of higher capital appreciation.

My 2 cents opinion is to let things stabilise first before collecting more. No point buying now when what we think is cheap now will be even cheaper in a few days/weeks/months time.

Atrium, IGBReit and UOAReit looking good. Yields getting better

My take on this:

1. SUNREIT's business operations is mostly standard rated (hotel, retail office).
2. By issuing units to a supplier (REIT manager), this would constitute as an exempt supply as per Customs (Refer to Guide on Fund Management).
3. If you have exempt supplies, that means any related input-tax incurred in generating/providing those exempt supplies can not be claimed, hence will charged out to P&L as an expense. This reduces the distribution to unit holder's.
4. I think it is too much of a hassle (paper work - messing around with tax invoices and normal invoices, contra notes, transfer applications and cashflow) to bother with two types of supplies. This distracts you from focusing on the standard rated operations and getting more profits to distribute out.


The following is the final para obtained from 2015 AR from CEO statement.

"The Manager will reduce the payment of Manager’s fees in the form of new units, from 50% to 25% in FY2016 and shall cease payment of Manager’s fees in the form of new units in FY2017. In all, we endeavour to deliver stable growth in distribution per unit in FY2016. "

I guess based on that statement they should be almost done negotiating with Customs. Ideally they should be proposing for the change in treatment for issuing units from being a "tax exempt" supply to become a "zero rated" supply. If that materializes, then everyone will benefit.

I thought this was only becoz CMMT bought over and was doing a major revamp.

Prior to that, the mall was not too bad, have a lot of shops open and events organised.

Anyway, the quiet moment, won't last long, prolly another few months.

Nice to watch movie in TropMall. Nice, spacious and price is cheaper then MV.

I think SunReit, Pavreit and WCTReit (if this Reit ever happens) for the long term should be worth getting?

Seems all 3 have a lot of new malls coming up or are on the plans already.

The only issue I can think of is:
1. Period of completion for construction of those new malls and whether its sure a thing on whether they be injected to the Reits, although there should be a first right of refusal.
2. Period to obtain close to 90 to 100% tenants
3. Funds needed to raise to acquire those properties - via issuance of new shares + new massive borrowings
4. Consideration of existing/new competition, inflation and other factors which will affect current earnings and distribution yields versus expected future new yields

Lai let's discuss.

This post has been edited by TC-Titan: Oct 1 2015, 09:04 AM

Sorry a bit blur on what u're saying.

So does that mean the expectation is for Reit yield to decrease after considering the 0.9% increase in interest? Hence, the unit price will self adjust and reflect this accordingly or some unitholders will eventually sell their holdings to get better yields out there?

When u say adjust portfolio, means go find better yields after considering the addition of 0.9% to the yield right?

Just want to confirm a noob question. Can MGS rate be considered to some extend the same as inflation rate? Or we use this as a different form of assessment for Reits or its more for FA purpose using Benjamin Graham's method?

Thanks Gark!

Did some homework to understand further.

Saw this old/recent articles:

Challenges for Reits

REITS Sector - A volatile MYR and bond yield environment NEUTRAL

Rough ride ahead for Malaysian bond market


To summarize or recap your points plus those from the above articles (please correct me if my understanding is wrong ya):

1. If MGS go up, Reit yields must go up to increase the premium against the risk free rate by 2-3%, REIT price must go down.

(What if the Reit yield is higher than average? So that doesn't mean they need to lower their price further right? The risk should be those with lower or average yields ya?)

2. If MGS remain constant, Reit yields can remain constant or become higher depending on the market maker, resulting in the Reit price to react accordingly.

3. If MGS go down, Reit yields can go down or remain constant, resulting in the Reit price to react accordingly.

4. Bond price has an inverse relationship with the bond yield. MGS is affected mainly by local microeconomic factors and some macroeconomic factors. Hence, playing a role to influence Reit yield in Point 1 to 3. Major investors or institutions tend to go for MGS to balance their portfolios and if they foresee a major correction/recession/inflation coming.

(US Treasury bonds have some but minimal influence towards MGS right? Especially with them aiming to increase the rate later this year)

So would it be right to focus on the following:

1. Focus on REITS which have a good combination of quality properties and tenants - office, warehouse, malls + more anchor tenants.
(E.g ARREIT)

2. Take note of REITs that renewed majority of their leases and revised the rates.

3. Look out for those with expansion plans - but must be those that add value significantly in the long term.

U need to go to the counter... they offer it there. Not on website.

Can give them a call first before u go. Most of the banks I believe are still offering new promotions.

-delete- duplicate

This post has been edited by TC-Titan: Oct 5 2015, 10:24 AM

My office using P1.
Cacat to the max.
When rain, sometimes no line.
I think the internet really emo now haha.

Can't change to unifi coz too ulu d my place. Need to wait for Ecoworld and other developers to modernise the whole area first =.=''

Arreit getting interesting.

Chotto matte kudasai~~~

Suria KLCC, Mandarin Oriental and Marinis at 57 takde bar or restaurants selling liquor meh

Hmmmm I prefer zouk: velvet and phuture. Seriously the ladies there...... so hawt.

Psttt zouk shift to Jalan tun razak d.

Last time poppi garden was the bomb

She is a very talented woman. Good to see her leaping from finance to become overall boss (CEO).

Expected net yield:

Atrium 7.68
YTL 6.84
ARReit 6.68
UOA 6.42
MQ 6.41
Hektar 6.26
IGB 5.84
CMMT 5.82
Sun 5.17
Pav 4.89
Axis 4.66

Source/Basis= http://mreit.reitdata.com/

When it comes to Reits, I think must first know what is your objective for this type of stock.

a. Investing only for regular/constant dividend flow for regular income for retirees or to reinvest in stocks = not bothered with the share movement but more concern on DPU increasing.
b. Investing for both the dividend and capital appreciation/protection
c. Trading for capital appreciation
d. Trading for both the dividend and capital appreciation

Different objective =different strategy and factors to consider.

A lot of people say REITs generally is a defensive stock. There is truth to it but only to some extent.

When there is a major correction or overall market sentiment is bad, property bubble burst or going thru a major downtrend = REITs price will go down. MGS, FD, OPR etc also plays a role from a macro pov.

General items affecting DPU are expenses such as utilities hike (electricity, water), land assessment, quit rent, GST charges (blocked input tax), professional fees (auditors, tax agent, surveyors, valuers, gst consultants etc), mgmt fees.

Rental revisions are usually upwards especially for prime areas and prime properties. Normal contract periods = 2, 3 and max 5 years. Rental revision can go down if the manager wants to lease out the property a.s.a.p and/or is desperate as some areas may be rural or the building/property has a bad reputation from the past (e.g someone KOed in that unit, hanky-panky activities by tenants).

Some of the net yield may not appear attractive to you, but to others it may be gold/gem. It also ultimately depends on your pricing entry or your overall pricing average.

Regarding the intrinsic value of the stock and margin of safety, how do you assess it? Based on NAV, dividend discount model, DCF, Banker's valuation using past/expected PER? Subjective right.

Yeah.. I already considered the 10% withholding (sendiri calculate) when posting.

So my figures is different from the website.