It depended on valuation paid which dictate the yield of it.

Reit is not running the hotel, but own the properties and rent the properties to the hotel management company.

So all depended how much valuation paid and how much rental that can get from it.

Lot 10 and Starhill can get good rental, but properties valuation is high as well.

Reit is about yield, not only rental amount. For eg, you paid 500 millions for a mall, you might get 25 million rental, but it is 5% yield only, compared to a 50 million hotel but can get 5 million rental. In the end of day, the hotel will be seen a better yield properties.

This post has been edited by cherroy: Jan 22 2010, 12:53 AM

Sadly to say, RPT is norm in reit across, as long it doesn't hurt shareholders benefit, then nothing to complain much. Even Genting had RPT as well.

Starhill Global should buy lot10 and Starhill at NAV or a little bit discount on NAV (like no more than 3-5%).

At NAV level, Stareit shareholders actually gain and realise the properties revaluation appreciation.

Next ultimate question, is what properties being injected, and valuation of it and yield of it. This is something we eager to know and need to know as soon as possible.

If not mistaken, I think on 1) do mention it will be sold at NAV and being paid by cash + preferred of Starhill Global

It is no 2) issue now, which I agree, if not ready, then don't need to disclose the rationalisation plan. When announced time, should have all the details and complete proposal.

The one that delivered good recent Q announcement is Qcapital, 4.x cents DPU.

Sorry, my mistake/bad. It is 3.9 cents.
I just read full years earning of 8.x cents which I translate into 4.x cents per semi annual.

Most reit IPO gain nothing as a lot of time, there is little premium for reit IPO listing time. A handful come in negative premium as reit IPO generally at the price of NAV, while most reit is trading at discount to NAV.

Primary factor is always location.

If really want to choose between the option above, my view, health-care, as it is more customed made generally. But still location overwrite all the factors, as land is the most precious value of the asset, not the building.

err.... I understand the issue. I was comparing type of properties itself, healthcare or hospital building has few interest as compared to retail, industrial if really want to auction time or when seeking for tenant without talking about RPT issue.

Last date of lodgement is the last date you must register your share.

But since after CDS and electronic transferred nowadays and automatically register as shareholder already, it is irrelevant to most investors out there.

But still they need it, as this is the official last date the share must register in order to entitle the dividend, as one must remember, although it is full CDS now, shareholders can still demand physical share paper/cert being issued to them as well.

Under the tax exempted law/ruling, 90% of reit income must be distributed, while those income is based on rental or operation income. Gain in disposal of investment properties is excluded.

Correct me if I am wrong.

Check the respective reit website, there are details info inside their financial report. Every reit has their own website.

I have no comment much on it although I hold some.

OPR won't be going too much, my view, it won't be raised more than 0.5% for 2010.
Yes, high OPR means higher interest charges on borrowing.

Based on experience and opinion, BNM won't raise too much on interest rate, as even last time when petrol price being raised to Rm2.70 and inflation rampant time, BNM only raise merely a few basic point only. Economy growth and recovery is overwrite inflation risk for most central banks around the world, sadly to say. Actually I am more lean or favourable central banks to raise interest rate to cool down and pre-emptied the inflation risk, although I am holding reit.

I am more concern about new and more supply office space coming out in the next 2-3 years, which could depress the rental as well as competition wise to get tenants.

No, you must buy before ex-date, not lodgement date.

Lodgement date is 2 business days after ex-date which is to facilitate the transfer of share in CDS. For eg. you buy today, today your CDS account won't be credited with the purchased shares. It is after 2 business date of ex-date, then the share is credited into your CDS.
So share registrar will use lodgement date for identify the shareholder.

But you must buy before ex-date, not lodgement date

Anything within 1,000 lots should be no problem for disposing. Buyer might not be showing up, but if put 1,000 lot at a few cents lower, can easily being 'eaten' away quickly.

I am not familiar with this reit, this plantation reit is a bit complex than the rest ordinary office/industrial/retail reit.

But do read the fine clause in the income tax act.


The key word is taxable profit, if the performance based income is not classified as taxable profit (Sorry I don't know or sure about it, may be other can clarify on this issue) or being granted exempted status or whatever special clause, then 90% need to work out based on taxable profit figure.

That's why gain in disposal of properties is not included in 90% calculation because capital gain is not a taxable income/profit.

This post has been edited by cherroy: Feb 4 2010, 12:32 AM

There is always pro and con.

Atrium's EPS suffer greatly when one of its tenant moved out, last 2-3 Quarter ago, which DPU from 2.x cents drop to merely 0.8 cents.

While for more diversified tenant, you can avoid or reduce this effect to minimal.

While if everything is well, surely less tenants give you less headache.

So, can't say which is for sure good.

Different people may have different view, there is nothing right or wrong or which is better.

But personally view that,
It is better to have diversificaiton on assets to spread out the risk.

Among all, Axreit is seems to be the one more diversified, from office space to industrial. But recently, it is more towards industrial, as newer acquisition mostly on this side.

Office space is the most lucrative, but office space will be under some pressure in the next 2-3 years due to more supply with more and new building coming into the market, while economy situation is so so, aka demand may not pick up quick enough to meet the more supply.

When you make profit, you NAV goes up in your balance sheet, because the company has more money now due to profit.

NAV adjustment come from properties revaluation which is paper gain. It is profit lead to NAV increment, not NAV increment lead to profit.

As long as the right issue or private placement money is used to acquire properties that deliver at least as same as current yield, it won't dilute the DPU.

Actually I prefer them to raise money through private placement instead of gearing as long as those money being used to acquire properties that higher than current yield (or at least at par),
mainly because interest rate only has one way to go i.e. up only, while with low gearing, it poses lesser risk on the reit itself in term of defaulting or difficulty in refinancing the loan itself, as reit won't repaying the loan, but servicing the loan only, while most loan/borrowing are quite in short to midterm only, which several years down the road, refinancing always needed.

I taught they are going to issue new shares at RM1.30, or no?

As far, from several private placement had been issued, like Axreit, the private placement is based on market price average price at time being.

There could be the reason why reit price is always traded at discount to NAV

I may buy Stareit, I just hope the new injection of properties will enhance its yield.

If fund through the RM1.30 private placement and with better yield ahead, then seem ok for me. As there is little details, how new rental income from the new building.

As in current situation, I wish to see any new acquistion is fund through private placement, as borrowing cost will become higher only in near future, while as reported office space supply will be more due to completion of several new building which could depress the rental.
At the moment, I wish to see on reit is they secure borrowing on long term basic, which lock down the interest rate. So don't need refinance too often.