SKY,

Without using DDM, assuming the expected DY of 9%, a fair price of 2.41 would translate to DPU of 0.21 (estimated DPU for FY2009 of 0.16 and FY2010 of 0.15~0.17). What I am saying is, the assumptions used to derive the fair price of 2.41 is impractical. When would this fair price be met? Rental reversions will not be significant for at least a few years, so when would the DPU of 0.21 be met?

Based on my DPU estimations with Kenanga's estimated growth rate of 2.8%, it would take a good 9 years to see a DPU of 0.21.

SKY,

I wouldn't consider this as an argument, but a healthy discussion. Please do not take it seriously

I am sure many would agree that we invest into REITs for their dividends, and not capital appreciation. Therefore the most effective measure for REIT prices is DPU. There is no use for assets to appreciate to super-high prices but DPU stays low as asset appreciation is non-distributive (meaning we get nothing even if assets appreciate by 100%). I am using DPU because we know that is what we'll be getting.

SKY,

I don't know why you're touching on gearing and loans when I was just commenting on Kenanga's report

Of course DPU can be increased by increasing the gearing, but what good would that make? We want sustainable high DPU, not a high DPU which is shaky (as you have stated). So the only reasonable way is to go for private funding, but with a price.

As REITs issue more shares, the DPU will continue to dilute. Therefore, to ensure the DPU is maintained, the cash obtained from the issuance must yield equal or higher returns than the current DPU (which is happening in this case). Having said that, I am not against the placement proposed by AXREIT.

The discussion here is based on Kenanga's report, and not how AXREIT is getting the funding. The fair price must correspond with the expected DY, which based on Kenanga's report, is too high (fair price) and too low (DY).

I do hope that my comments do not confuse you

Well then, it is up to me to trust the report or not as you said way back. Since the purpose of discussion has been defeated, I don't think it is wise to not discuss any further. You do have your own perception, and I have mine. So I think the best thing to do is to respect each others differences nonetheless

By the way, good discussion here.

thats below NAV & will dilute the NAV... 

SKY,

Would you mind to share the link? I'm interested to know more

So your recommendation? Go directly to singapore reits instead?

Why in the first place u kena witholding tax? Witholding tax is a tax withold by resident company/individual to non-resident company/individual upon payment. Its like the resident company is some sorta acting on behalf of the IRB.
So declaring yourself as a resident of Malaysia, by virtue of Section 7(a)/ (b), © or (d), how can the company withould the portion of your salary as tax? You are not subject to any witholding tax, and company has no any right to withold your tax.
You gotta be clear though, whether the deduction againts ur salary is PCB or witholding tax. If PCB( Potongcan Cukai Bulanan), then you will be able to get the refund from IRB. If it is the latter matter, then perhaps you would wan to call up IRB for further details.

Btw, is the company you working with is a NR or R company for malaysia?

Thanks sky for your explaination.

So in conclusion, reits are being taxed lower compare with corporate.

Yup agree with you. The more we want to find out the more we know we don know 

Pening kepala  :x

Wow then is good what about 9% yield and will be contributing more than 10% in future 

actually if include the div received i think already exceed / earned back my capital liao maybe just need some more for fees
ya jordy, there are still lots of buying opporunity out but nvm ma you still hv axreit rite GOOD

http://www.horizon.my/investor/reits.php
Compilation of all the REITs in Malaysia together with dividend yield, dps, gearing, market cap. properties portfolio and real time info  

During last tenant crisis, Atirum gave 0.8sens DPU (vs 2.2sen now) for that quarter.
Just take 8x4=3.2sens  Yield =3.2/85 = 3.7%. (annual). So if similar story repeat again, maybe Atrium still can declare better than FD return.
Other plus points,
- Gearing is the lowest among REIT at 20%?
- Mngt not likely to screw up another big time in such short time
- actual DPU fall only for 1 quarter; whereas above assume worst case last for a year.
I really tempted to collect some but price go up recently....still undecided

Got the below info from one blog, www.horizon.my

"The Heads of Agreement between vendor & purchaser provides for a proposed sale price of RM629 million and RM401 million for Starhill Gallery and Lot 10 respectively to be satisfied by cash and/or Convertible Preference Shares in Starhill Global REIT. The selling prices are pretty near current book value. This is what the Manager says:
The adjusted net book value of the Properties based on the audited financial statements as at 30 June 2009 and after adjusting for the value of 42% or 490 of the existing car park bays in Starhill Gallery to be retained by J.W. Marriott Hotel Kuala Lumpur is RM1,055.5 million. Accordingly, on completion of the Proposed Disposal, Starhill REIT is expected to realise a net loss on disposal of RM25.5 million for the financial year ending 30 June 2010. The original cost of investment of Starhill Gallery and the Lot 10 Property by Starhill REIT was RM480.0 million and RM341.0 million, respectively. Starhill REIT completed the acquisition of the Properties on 16 December 2005 on the listing of Starhill REIT on the Main Board of Bursa Malaysia Securities Berhad. The Proposed Disposal will unlock the value of the Properties as it is expected to realise an estimated distributable income of RM228.9 million for the financial year ending 30 June 2010."

So is it a loss or gain for STAREIT ? 
Also, what properties can be potentially be injected ? I presume its other YTL Hotels.

I have no strong confidence in our retail centre here, you know our consumer habit is the newer the better. Very few shopping malls can stand in the market top notched condition very long, apart from Sungai Wang.

Hektar is good, but in my humble opinion I believe foreigners and KL consuming power is greater, while Hektar's malls are not there. However I do not understand Subang, Muar and Melaka people buying power, so I can't comment Hektar potentiality. But if you are keen in Hektar, you should study the regioanal market before investing.

how it is going to finance the purchase? right issue?