Haha ante5k, I am still using the "old" conventional conversion as I am more used to that
We old-time traders still use this until today so as not to confuse my remisier.

I don't think Neo would sell off his holding altogether. He loves his AXREIT too much that he could not stop accumulating

ya, i have about 185 lot.. because my average price is 1.19
now even more i got around 208lot liow.

Lol, I mis-calculated by 11lots Did you reinvest your dividend?

div received can pay ur interest on margin

this year, all dividend i receive from any of my counters... i will reinvest it..

i'm waiting for another RM2500 from my atrium reit and RM500 from hektar. I thikn payment date 6th March

Yup actualy if you very confident with that dividend counter you can do that...
Recently i top up my housing loan with offer BLR - 2.3 which give me about interest of 3.2% If your counter past dividend record is between 8 - 10% you can go ahead with it. Just in case the dividend cut down by half due to economy downturn you still can get dividend of 4 - 5% which is still able to compensate your loan interest.

This is what we call carry trade or using other money to earn money for you which if market work out in favour with you, wealth can be built quite fast while sitting enjoying the return without much sweat but with a high risk.

Not only cover the margin interest but extra cashflow as well. Just like Neo18's case, if market just moves sideway, without any appreciation in price and margin interest and yield of those invested reit or stocks, it easily earn extra few ten K of cashflow every years just with 2 main criteria, yield doesn't drop too much and margin interest held steady.

That's why I previously said, new millionaires or new generation of milliionaires will be emerged after this bear market ended.

But this could be the longest and deepest bear market in our life time, so invest at your own risk.



This post has been edited by cherroy: Mar 7 2009, 09:53 PM

Cherroy,

In your opinion, what are the possible downside risks for M-REIT, besides the possible discontinuity of tenantship, and property price coming down?
What are the risks that could cause REIT to register losses...even with rental coming in?

thanks

If businesses are going down and property prices depreciating, then tenants can opt to revise their rental rates lower during their renewal period. This would affect the rental income significantly in proportion to the property price. Earnings of REITs will be reduced by increasing interest rates as well, especially those with high margin.

But it is quite impossible for the REITs to register losses as the expenses for REITs are quite low. Their expenses consist of mainly quit rent and property maintenance costs. So as long as they still get full occupancy on their properties, REITs will still register positive cashflow.

My opinion more and less with Jordy.

It is just similar owning a property, the negative cashflow only can result from property maintenance (assessment, quit rent and miscellanous expenses) and property management fee.
Reit is much simpler to understand that construction company account. In fact, the simplicity and 90% distribution which make it easy to understand, and difficult to hide any accounting irregularity.

Property price will be soft in the coming future, no doubt about, but it won't drop too drastically. As compared to 1997, there is distinct difference between 2009 and 1998, for the coming recession, Malaysian and Malaysia company entering this recession with cash rich in general (as seen from FD or bank deposit grow for the last 2 month because of global financial crisis, also most well managed listed company balance sheet), so pressure to sell by existing property holders are not that great compared to 1998. Also interest rate across the globe are super duper low, zero % or 0.25% or 0.5% everywhere, even Malaysia is expecting to have 1.5% OPR before year end, so those fully paid property has no pressure or having little incentive to be sold.
Sell the property now to get cash and park the cash in 1.5% FD is some move that those cash rich people and company won't that interested to do so.

For reit, the most important to look at is the rental income and ability to renew lease or getting tenants which enable to give sustainable good yield annually.

The pressure of properties price going down come from foreclosure properties and newly built property which will drag down the market value of existing properties.
Office space will be oversupply in Klang valley in the next 1 or 2 years after several big project completed. So office space yield might be affected in the next year or 2.

This post has been edited by cherroy: Mar 8 2009, 06:08 PM

cherroy,

<<so those fully paid property has no pressure or having little incentive to be sold. >>

Pardon my ignorance. Are Malaysia REIT all based on fully paid properties?? In USA, most of the REITs are run on property with loan aka they are LEVERAGED. So, there is a possibility that tenancy rate drop below what is needed to service the loan.

Dreamer

Locally, reit borrowing is still not that high, may be under infancy stage, still are under manageable level. Mostly I knew are in the region of 20-30% gearing on their asset owned. Yes, if tenancy drop to a ugly level like only 20% -30% being rented out, then yes, it could be in negative cashflow aka income not enough to pay property maintenance and servicing loan.

Under the listing guideline imposed by KLSE, they can't exceed 50% gearing based on their asset owned.

Thank you.

Dreamer

anyone here heard of HEKTAR reit?

they have new project going on at malacca. should be good buy

What does you mean by new project?

Hektar reit consist of Subang Parade, Mahkota Parade (melaka)

Reit is a property management company, not a property developer.

1 more is Wetex Parade in Muar. Im holding Hektar units as many as Axreit units.

all Reit's in Asia are in dirt shit now...Finance loan problem,thanks to credit crunch and all Banks tighten their loan.

What are you talking about now? Your sentence does NOT make sense to anyone of us. You have not been spamming for a long time, and I hope it STAYS that way.

Could be he thought REIT is property investment??

Every company in high leverage is having problem right now, be it reit, construction, property development, manufacturing. Because it is hardly roll over or renew or getting/issuing new bonds for those expiring bonds or loan at current situation.

So those with healthy balance sheet should able to withstand the recession, while those high leverage will be under risk. So whether the reit is under risk or not, simply look at its properties portfolio and its borrowing level should give us an idea their situation.

This post has been edited by cherroy: Mar 11 2009, 10:04 AM