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Increasing demand for S-REITs.

Monday, October 4, 2010

Morgan Stanley says that S-REITs will benefit from low borrowing costs and a stronger S$. The high dividend yields make S-REITs attractive with limited downside.







Although Morgan Stanley specifically mentioned Mapletree Logistics Trust and Ascott Residence Trust as being upgraded to Overweight, I believe that smaller S-REITs with even higher yields will get some attention soon as well. It is a matter of time and I will be patient.

Today, Saizen REIT saw its 15.5c sell queue bought up to the tune of 6,068 lots. There were three trades which were buy ups of 1,000 lots each. Could this REIT be attracting the interest of some deep pocketed investors?

Incidentally, I have accepted and paid for the rights of AIMS AMP Capital Industrial REIT this evening. I also applied for some excess rights.  Hope I get some. To fellow unitholders, please remember that the deadline is 7 Oct (Thu), 9.30pm for applications by ATM.

Related posts:
Office S-REITs VS Industrial S-REITs.
AIMS AMP Capital Industrial Trust: Rights issue.
Saizen REIT: Better than expected DPU.

10 comments:

Chu Yeow said...

I saw the buying up today and I suspect it could be due to the jump in Japan real estate stocks today.

I just received the annual report today, did you get yours too?

As for rights applications, I just did the same today with my Ezra rights and applied for excess rights too. Will be really really nice if I get any at all heh.

Chu Yeow said...

Oh yes, since you're writing about S-REITS, do you have any opinion on Mapletree Industrial Trust's IPO?

Probably gonna be a "blue chip" REIT, I'm considering applying for the IPO and depending on IPO day performance, might hit and run or keep it for distribution.

AK71 said...

Hi Chu Yeow,

Hey, thanks for that bit of information. I had no idea. :)

Yes, I received Saizen REIT's annual report over the weekend.

Are you vested in AIMS AMP Capital Industrial REIT? Yes, I would be very happy if I could get some excess rights. Really good value for money. I can't comment on Ezra though. :)

AK71 said...

Regarding MIT, I found out that it would be offered at a small premium to NAV, a yield of about 6 to 7% and with a gearing level of about 30 to 35% (post IPO). None of these numbers are primary. I got them off secondary sources.

Apparently, one of the reasons for the IPO is to repay debts. Personally, I would wait for it to list and give it some time before deciding whether to be vested. No hurry. :)

Anonymous said...

Hey AK, I paid for the rights & applied for excess rights too. How will we know if we got the excess rights though?

Thx,
~K

AK71 said...

Hi K,

I think the rights units would be ready for trading on 15 Oct, if my memory serves me right.

I think you could check with CDP if you want to know your exact holdings. You could call your broker to find out how.

Alternatively, wait for the refund from the excess rights application to be credited back to your bank account and you would know how many excess rights you managed to get. This is assuming you applied for more than is necessary to round up odd lots. ;)

Good luck. :)

Chu Yeow said...

Hi AK, yup, I'm vested in AIMS REIT but only a small sum at $0.215. I bought them XR though so I didn't have to go through the trouble of applying for rights.

As for whether Ezra excess rights would be value for money, I'd say 100% they are value for money, since $1.18 is a steep discount to the last done price of $1.79 (theoretical XR price was ~$1.65 if I remember correctly). But I get what you mean - you don't follow this stock :)

Thanks for sharing your view of MIT. I haven't got any info on MIT's IPO as well and didn't know that one of the reasons was to pay off debt.

AK71 said...

Hi Chu Yeow,

21.5c for AA REIT is still a good price; with a DPU of 2.08c, that's a 9.67% yield per annum. Although it would be nice if you got in when it was still CR, this yield is still more than satisfactory. :)

Sounds like you are in the money for EZRA's rights issue. Hope you get all the excess rights you applied for. :)

I will be keeping an eye on developments at MIT. Will blog about my observations, if there is anything blogworthy. ;)

Anonymous said...

There are plenty of 'yield stocks' at the moment though only the forsaken ones are trading at attractive yields. So sometimes, to get an attractive stock, we got to be investors of pariah stocks or the forsaken ones LOL.

REIT-wise, the forsaken ones are AA REIT, Saizen REIT, LMIR, First REIT, TCT, Cambridge.

Shipping Trust - the whole asset class is considered to be pariah to many. Though, with good historical reason...still risky but gems may be found here.

Generally, most of them are forsaken for a good reason. It is up to the individual investor to determine whether does the reward outweighs the risk. I am invested in a few of them.

Alternatively, purchase growth companies in defensive business with pretty decent yields. Generally infrastructure companies fits the bill ie SMRT, SBS, CM Pacific etc. Companies with BOT assets (most are new) may pay decent dividends in the future once cash-flow are up and running. Big if though...hmmmmm :)

Nick

AK71 said...

Hi Nick,

I guess it is good in a way that people are avoiding some of the REITs with really good potential. It would give me more time to accumulate. ;)

Choices aplenty but I don't think there is a need for us to cast our net too wide.

Quite happy with what I have now. Unless a really compelling proposition comes along, I am unlikely to make any major changes to my portfolio. :)

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