Hi all the guru here,
May I know whether AXIS REIT buy the properties using shareholder's money or take loan from bank? does it have any debt? in net cash or debt position?

Also, the NAV is higher than share price may be because ppl apply a discount expecting economic downturn (lower tenant occupancy & lower rental), oversupply of office space in KL (many due to complete soon).

Much appreciate ur comments. thanks!

Hi Cherroy,
Thanks for response. I checked their Q2 08 result & noticed interest expenses double from 1.1million (Q2 '07) to 1.9million.
In terms of % to total trust income (1.1m/8.7m vs 1.9/13.2m), its an increase of approx 11% to 14%.
While current interest rate is low (gov to maintain liquidity of credit), can't rule out an interest hike during -ve growth of economic (when current global financial crisis effect actually been felt in Malaysia).
However, based on above numbers, seems AXREIT is in good shape to withstand interest hike or drop in rentals.

2007 DPS is at 13.6sen, even if I slash it drastically by half at 6.8sen, the yield is still 4.5%. ~ at RM1.49 price this morning.

I am being very conservative in valuation here & this stock seems worth a buy.
Can't understand why the stock is on free fall recently... perhaps I missed out something? Feel free to add or comment. thanks

HI all, Gong Xi Fatt Chai!

I m interested in Atrium after their recent announcement of DPU 2.15cents.
Tried google around but there are no related news in 2008 at all!

Question 1:
There was news in 2007 about plan of new acquisition of Senai plant (Flexitronics), does the deal still ongoing or been cancel?
Flexitronics (electronics manufacturing) badly hit with current economic downturn, so I suspect the deal will went down the drain.

Question 2:
Noticed main income of Atrium is from rental -Shah Alam 1 (Exel Logistics) & Shah Alam II (CEVA Logistics). THese companies seems like 3rd party outsourcing of MNC DHL & TNT.
Wonder how strong the fundamental is these Exel & CEVA companies, will they able to continue honour their rental contract?!
~consider logistics biz will be badly affected in current worl economic crisis ....

Much appreciate your sharing to shed some lights here, please. Thanks!

Cherroy,
Many thanks. You have my respect not just the in depth knowledge in REIT but the willingness to share openly with others.

For Q2, May I know what made you commented those are reputable company (Exel, CEVA)?
~ since those are not listed company, I just don't know how to get a little more info (finanicial health, historical profitability & etc) about the companies.

Fair comment, Atrium is higher risk & less fund manager interest, should be the reason why the price haven't shot up like AXIS.
However, considering the followings
(i) Atrium (RM0.68) discount to NAV at 36% vs AXIS (RM1.40) at 20%!
(ii) Gearing (debt/equity) Atrium at 22% vs AXIS at 51%
(iii) Higher div of Atrium.

In the worst case, tenant run away & Atrium can't pay div. Gearing is low, so Atrium should be able to pay the interest of the borrowings to bank with BLR coming down.
I think they still have money in bank collected from IPO & also not used since recent acquisition plan doesn't go through.
Base on (i), good upside potential when economic become better.

I think I will start collecting some tomorrow market open ....

KUALA LUMPUR: Hektar Real Estate Investment Trust’s net profit dipped 25% to RM60.35 million for the year ended Dec 31, 2008 (FY08) from RM80.52 million in FY07 but the previous year’s figures were for 13 months from December 2006 to December 2007.
Source: http://www.theedgedaily.com/cms/content.js...6866d0-7be4e417

Hi,
Refer above latest result on HEKTAR, anyone knows what contributed to the 25% drop in net profit? Is it due to higher borrowing/interest cost?

However on an annualised basis FY08 DPU (10.2sen) still surpassed that of FY07 by 3.2%.

This puzzled me, how could DPU still perform slightly better when HEKTAR net profit actually drop?!

FYI - [RHB research report 20-02-09] Tower REIT, Higher occupancy risk in the near term since its anchor tenant, HLA Bhd will
move out about 90% of its operations from the building by May 09 under a relocation exercise. As a result, Menara HLA’s occupancy rate could reduce from
89% (Dec 08) to 75-80% (in June 09) and Menara HLA gross rental income could potentially drop by about 20%.

About 39% of Tower REIT’s gross rental income is derived from insurance & finance related industry, 9% from oil & gas industry, 22%
from information technology industry whilst the remaining is from property, manufacturing and service industries.
i.e. Its tenants are from the worst hit industries in current crisis.

----------------------------------------------------------------------------------
Tower REIT P/NTA at 60% is the lowest among local REITs. Gearing is low at 0.2.
However I hesitate to buy due to above bad news/concern.

All,
What is your take? buy now or wait .....
Will apprecaite your comments. Thanks.

Cherroy,
Thanks for comment.
I am aware & agreed with your point that REIT DPU still much better than FD.
That's why I have been following this thread and buying small qty. I started with AXIS, Hektar then Atrium.

I though next I want to buy some Tower units but now re-considering it after the news on HLA withdrawal.

Here's another useful link forcus on REIT; with a collection of related info. http://mreit.blogspot.com/

---

Added on March 4, 2009, 11:31 amCherroy,
I can't find the news on Atrium web site [http://www.atriumreit.com.my/news.htm]. Google search also no relevant news avail.

May I know your source of info?
Kindly forward the link or news if possible. Thanks.



This post has been edited by ooyah98: Mar 4 2009, 11:31 AM

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.

Hi all,
3-July-09, There is an interview with CEO & CFO of GLM and their insights on Tower REIT.
Follow this link --> http://www.horizon.my/2009/07/tower-reit-m...a-prime-office/

"For Menara HLA, Hong Leong Assurance Bhd’s front office will be moving to their newly purchased building in PJ City along the Federal Highway by the end of the year. We have appointed a leading marketing agent to source for a new tenant for us."

Seems Tower REIT still haven't secure new tenant. Their Price/NAV (63%) is the lowest among REIT.
Is it good to collect for long term consider can buy now at big discount to NAV?

Appreciate your comments. Thanks!

I m interested. There recently annouced a sudden jump in net profit & DPU. I wonder what contributed to it & whether is sustainable?
Did some search on web but can't find more info; do you know whether they have a web site, please forward the link? thanks

Hi the Sifu here,
I noticed the forumer here seldom talk abt TOWER despite the fact that the Price to NAV ratio is the lowest among REIT.
what did I missed here, please shed some light?

Thanks. I already following this blog.
Here's Tower REIT Q2 30-June-09 quarter report. http://www.guocoland.com/Documents/GLM-TOW...2009-040809.pdf

Up instead of adjust down on ex-date? Yeah! .. now I start believe it can go pass the RM2 mark.

16cents at RM2 still give 8% return. Maybe still a good choice for ppl with low risk appetite? Any better option?

I am interested in Tower REIT but hesitated to buy so far. I recall one of their property, HL Tower(?) key tenant moving out & no confirmed new tenant contract yet. Also, there are reports of new office tower/spaces over supply until 2011.

Attached RHB Invest report.
"Positive on the acquisitions. We are positive on the two acquisitions due
to three key reasons: a) yield-accretive acquisitions. The two properties have
property yield of 8.3% compare to the company’s trading yield of 7.8%; b)
additional rental income. Assuming the acquisition will be completed by May
2010 (for the property in Penang) and Dec 2009 (for the property in Klang),
our FY10-11 EPU will be increased by 9.6-10.7% whilst DDM-based fair value
will increase from RM2.80 to RM3.10 (based on unchanged WACC of 8.2%);
and c) fair pricing. The valuations are supported by an independent valuer
i.e. C H Williams Talhar & Wong S/B."  Axis_REIT_20091120.pdf ( 80.29k ) Number of downloads: 37

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

Anyone in KL has received HEKTAR dividend cheque?
i.e. 3.1sen DPU, payment date 5-March.