Reit and dividend stocks are more appealing in low interest rate environment, which make no reason to dump reit at the moment. Unless one sees properties price going to drop significantly like more than 30%, which is rare, even during 1997 crisis, properties price never drop such a degree unless in those remote area and properties that no one interested at all.

Secured tenants is the most important criteria for reit now.

This post has been edited by cherroy: Jan 22 2009, 09:26 AM

Should be today, after the market closed based on last time they updated/press release.

Axreit DPU is 7.87 cents, ex-date 11/2

Total for the year DPU is 15.27 cents.

With previous 1st and 2nd interim was 0.75 cents and 6.65 cents, so it is 7.87 cents, total 15.27 cents.

Even half year distribution is much much more than your 1 year FD right now.

1.32 no more seller, next seller is 1.37.

So 1.37, want or not? Haha.

Tower reit will be paying around 5 cents DPU as well within this month or next month.

Banana is growing on Axreit

1.40 currently.

Ok lah, not be too greedy.

Because at the reit pricing and DPU, Axreit is much more attractive than Stareit

Axreit
Price 1.00
DPU 15 cents
Yield 15%

Stareit
Price 0.77
DPU 0.72
9.4%

That's why more people discuss about Axreit.

There were some discussion on Stareit as well in the old posts, can check it out.

I used 1.00 because at the level, forumers started buying (started from below 1.20 or so), and most forumers interested in this stock since then (most of us interested in this stock had bought along the way down).
At 1.20 below, it sparked a lot of interest, that's why I used 1.00. But even at 1.30~1.40, yield is still pretty good with around net 10%.

Stareit liquidity is not bad as well. You can easily buy and sell 1000 lots in stareit with no problem or without price distortion.

This post has been edited by cherroy: Jan 30 2009, 09:34 AM

Q1.
Acquisition has been cancelled, in fact, none is on the list of acquisition currently, if not mistaken

Q2.
Those are reputable company, as long as they don't 'close shop', most still high probably will honour the contract.
Yes, your concern is also the market concern, in reit, the risk primary is on lease renenewal ability by the tenants, consider that logistics is one of badly hit in economy recession.

That's why reit or specifically reit across the world are trading at significant discount in anticipation of lesser tenants, lesser rental rate and properties price under pressure.

The distinct disadvantage of Atrium compared to others, is lesser liquidity, lesser diversify and size is too small for fund managers liking.

This post has been edited by cherroy: Jan 30 2009, 02:57 PM

I tak ala. (temporary no reit buy now due to recent surge across, looking at Carlsberg at the moment for dividend play)
Afraid having too much reit as well.
Need to balance out the portfolio.

But their yield simple irresistable especially FD rate only 2.5% and 3%.

All reit are having good up surge momemtum currently due to most are announcing their DPU which is the major factor. After ex-DPU, we may see their price softening back.

Just fyi, Atrium is buying its own reit as well but just in small quantity.

They are long enough in this industry, if not mistaken. Ceva, I don't know, but Exel is dealing with logistic business already for sometime already.

There is no way or difficult to get those financial report if they are not listed. They have no obligation to let Atrium management know their financial health as long as they honour the lease contract signed.

Logistic company shouldn't be too bad (it will be bad as well, none industry will escape the economy recession effect) compared to other industry. In time like this, low overhead cost industry should be more resilience compared to those need high overhead cost to run one like steel industry or electronic company.

But my opinion, risk of Atrium is higher than Axreit, due to lesser diversfication. Atrium is more like logistic warehouse play which solely depended on 2-3 company tenants while Axreit is more spread across.

Yup, fair comment.
For the past Atrium price always up when there is distribution coming out which it attacts investors because of yield.

Upside potential of reit is actually less than normal stocks. Reit price upside is capped by its actual properties value and yield compared to FD. Reit price shouldn't trade too much premium over its real and actual NAV.

Actually factor affecting reit are much more simpler compared to normal stocks.

1. NAV
2. Yield
3. Sustainability of the yield ie. tenant
4. The prospect of the properties owned.

This post has been edited by cherroy: Feb 2 2009, 03:50 PM

Whenever reading the gross profit of company announcement, don't just look at the headline number, we must be look detail into it.

Gross profit = business operation profit + adjustment of fair value + extraordinary gain/loss in investment etc.

For reit, when reading the profit, look at the operation profit, don't look at the overall profit. As some profit may come from adjustment of property value which under reit regulation, they need to value/change their property book value every 3 years. So if those area property price is increasing, so under the account, they will adjust the property value according which resulted some profit which will make the total amount of profit higher in particular year. So next year, without the adjustment, you will see profit drop significantly.
Those profit is actually paper profit without any real cash flow into the company.

What is the most important is the operation profit which is the ability they pay the DPU.
So if the company is doing fine, then you will see the DPU increasing.

Whatever, in reit, the most and ultimate concern is the DPU, which is the most accurate indifcator how it is doing.
Total profit can also rise with new property acquired, but if DPU is dropping (resulted from dilution or whatever), then it is not good.

IJM has sold Tesco Penang to Qcapital last year.

Yes, somehow part of subsidiary company in Malaysia.

It has its own website. Can check it out. http://qct.com.my/

The problem of comparison is FD rate is super low now.

Even for most reit, even their income dropped or lesser DPU by 20-30%, their DPU and yield still more than 2x or some 3x FD rate. So it is hard to make a conclusive judgement that their price can drop further.

Most reit price has been trading at discount for some reason, some negative factor has been priced in already.

Reit always or should always sensitive to FD rate and properties sector situation.

Not mean to recommend anything. Buy or sell at your own risk.

Reit in Malaysia is a bit illiquid and less being traded. You only see price going down in major way when there are some major players divest or invest in it, just like previous Axreit slide all the way from 1.40 level to 1.00. Once the selling finish, it stablise back, until got new major development and new big players buy or sell. Otherwise, it just hovering here and there with low volume and potential surge when they are going to distribute the DPU.