Thats y i think reits with smaller size is easier to manage for the management in terms of renew its tenants.
Just enter 10 lots of hektar at 0.905

any particular reason you pick hektar than others reit ?

Axreit is reported securing some Rm170 million long term (3 years and 5 years term loan) for refinancing existing short term revolving loan. Half based on fixed rate at 4.5% and the rest at variable rate.

So Axreit doesn't need to worry about refinancing its majority of current borrowing for another 3 years or so.
So main risk is about tenant renewal.

FYI. Hektar has the highest debt to equity ratio of 75%

The success of AXREIT securing the long term loan really has a great effect on its price. Today AXREIT flying

Because previously when global financial crisis or meltdown down or credit freezing time, risk of unable to refinance is pretty high which happened on a lot of overseas high gearing reit.

If they cannot refinance the loan, or issued commercial paper/bonds etc to repay existing matured loan/bonds, the only way is to sell down the property at a distressed price.

Can they use their rental to service their loan? and reduce in term of dividend?

If they do not pay out the minimum of 90% of their earnings as dividend, they will be subject to tax. And by the way, I think their rental income is definitely not enough to pay their loans in one lump sum.

The issue of refinancing is not about servicing the loan, but repayment on the borrowing when due/matured.

It is lump sum as Jordy mentioned.

A lot of company does issue bonds, or undergo some term (like 3 years or 5 years) credit facility which when due they need to repay all in lump sum, generally, company will do refinancing to roll over the debts.

Your 10 lots is 10x100 or 10x1000, just curious cos if 10x100, then your buying cost is high for this 10 lots lo.
It should be 10x1000 right?

Ops sorry my mistake

But i wonder y reits will find hard to refinance their loan eventhough some of their debts level are high. as long as their business can sustained and able to service their loan or pay their bond to their bond holders....As long as the company fundamental still maintain strong should be not hard to find loan .

That is the point. REITs with good fundamentals can secure a refinancing loan. That is why you see AXREIT investors are seeing this a positive sign. From here on, I think AXREIT is only going up as investors are anticipating another increase in profit end of next month.

Locally, not much an issue for refinancing as long as company fundamental satisfy the banks as liquidity is ample locally.

But during period from Sep 2008 (after Lehman) to March 2009, we are in unprecedental time of economy history which credit is freezing globally in general, although we don't feel much locally aka banks are scare to lend.

hi all,
Noticed Tower REIT on a strong up trend since last 2weeks.
Could you kindly share what is motivating the buying?

Early this year they have some risk of getting new tenants since HL group decided to move out of one the building.
Did they manage to secure a new tenant? ~Thanks a lot.

TWRREIR's biggest shareholder is HLG if I am not mistaken. So, if they decided to move out of the building, it should mean that they have secured a new tenant. You could check the archived news from Bursa's website for the information.

I'm thinking of putting money in a REIT for the first time, so I took some time today to read up some stuff on them. Since I was curious about their leverage and the total size of the various funds, I went ahead and calculated them. Leverage I calculated as Borrowings / Total Assets while sizes I calculated as Units in Circulation x Unit Price. I got Unit Price and Yield from http://mreit.blogspot.com/

Here are my results:



My biggest surprise was that Atrium is really tiny! Plus some of these funds have really low leverage. I believe that the maximum leverage they're allowed is 50%.

Finally, I don't understand why they are all trading at a discount to their NAV. Is it because investors don't believe in the valuations of their properties?

This post has been edited by wankongyew: Jun 11 2009, 01:10 PM

"My biggest surprise was that Atrium is really tiny!"
There is no surprise at all as it has only 4 warehouses under its stable.

"I don't understand why they are all trading at a discount to their NAV"
Market's fear of a prolonged recession has hit REITs quite hard as property prices are very sensitive to recession. As soon as the crisis is clear, we should see REITs trading near/over its NAV.

As to why some of them have low borrowings, I am not too sure about them because I am not interested in them. Perhaps they were able to repay their loans due to the issuance of new units. This practice is common among REITs.

Market fear they are not able to secure new tenant once current lease expired. So reit price is discounting those potential risk ahead.

Also there are some new supply of office space on newly built building so it might depressed the rental market.

The issue is about rental and tenant, not the NAV itself.

Although with softer properties market, it is norm for market discount the NAV.

Any particular reason why you're not interested in them? Do you mean the low-geared REITs or REITs in general?

The low-geared REITs. I have no interest in looking into them at the moment.