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AIMS AMP Capital Industrial REIT: 3QFY2011.

Wednesday, January 26, 2011

My first night on a working trip in Hong Kong and I am having trouble sleeping although I was feeling quite tired earlier. So, I went to the reception and purchased a card which allows me to have internet access for 3 hours for a fee of HK$40. Quite reasonable, I think.

First thing I did online was to check on results announced by AIMS AMP Capital Industrial REIT. Its unit price touched 21c with 8 lots changing hands at that price in 4 transactions. Almost all of last session's trades were at 21.5c.

The recent weakness in this REIT's unit price could be attributed to some heavily vested investors anticipating a lower than expected DPU which came in at 0.51c, payable on 15 March 2011. The guidance was for 0.52c in a circular dated 22 Sep 2010. I am not at all surprised since I had expected a lower DPU of 0.5c myself when I revised the DPU and fair value of this REIT on 11 Dec 2010. Read my blog post here.

So, a DPU of 0.51c is rather pleasant for me. This could be due to the fact that "I did not take into consideration the other positive developments in the Market Update which is the 100% occupancy achieved for 15 Tai Seng Drive (85.7% as of 31 March 2010) and 23 Tai Seng Drive (84% as of 31 March 2010).  Conservatively, this should add about $400,000 to the REIT's annual rental income."

In its report, the management also said that the newly acquired property of 27 Penjuru Lane only contributed 78 days of rental income, being only acquired on 15 October 2010. So, could we expect next quarter's DPU to be marginally higher when the property contributes three month's worth of rental income to the REIT? Perhaps.

This REIT is still a strong proposition for anyone looking for a reliable stream of passive income. I have put in a BUY order at 21c in case the selling continues in the next session although I do not think anyone in his right mind would want to sell at that price.

Annualised DPU: 2.04c
Gearing: 32.7%
NAV/unit: 27c

See presentation slides here.

12 comments:

Anonymous said...

Hey welcome to HK! Staying here till the weekend? Hope you bought enough warm clothes :)

I have been queuing to buy at 21.5 forever but never managed to do so, despite the numerous dips. Guess it's like that when one is buying from overseas.

Victor

Zelphon said...

Hi AK,

Good luck with your queue at 0.210..

Luckily, I managed to grab some at 0.215 today.

AK71 said...

Hi Victor,

That is very strange. You should have had your BUY queue filled yesterday at 21.5c when the price dipped to 21c intermittently.

Hong Kong is freezing. Taking a lunch break now from the full day meeting. Good to stay indoors! ;)

I will be leaving the morning of Saturday once all the business is dealt with here. :)

AK71 said...

Hi Zelphon,

I am in the BUY queue at 21c but I just could not resist buying more at 21.5c. My overnight BUY order for 21.5c is filled.

DPU of 0.51c coming to us. ;)

Anonymous said...

Silly me, I just checked my online brokerage and found that I had been placing my buy instruction at 21c all along. Getting senile... So it probably will have to drop to 20.5c before I can buy. Wonder what's the chance of that happening.

Leaving so soon? I can buy you a drink if you stay a bit longer :)

Victor

AK71 said...

Hi Victor,

I come to Hong Kong really just for work. Been here so many times that it isn't exciting for me anymore.

Hotels are also relatively expensive. I am staying in a budget hotel at S$100 a night. I miss my comfy home and my car back in Singapore. Haha..

I must say that transportation by MTR here is quite comfortable and inexpensive. The trains are more frequent and less crowded compared to Singapore. I got the Octopus card, the equivalent of the EZ Link card in Singapore.

Food can be quite cheap here. HK$19 for wanton noodles from the 24 hrs cafe downstairs and HK$7.90 for a bottle of herbal tea from 7 Eleven.

I hope to sleep earlier tonight. Had trouble sleeping last night. :(

OK, back to AIMS AMP Capital Industrial REIT. 21c? I didn't bother putting in BUY order tonight. I think it is unlikely to have anyone selling at 21c now that the income distribution has been announced. ;)

Anonymous said...

MTR is less crowded than subway in Singapore?? Oh my, must be REALLY crowded in Singapore. Will find out in a couple of weeks myself :)

Hey eat something decent la. Cantonese says work is "won sic" (= find eat). What better way to spend our hard earned money than on food we put in our mouth :)

Hope you sleep better,

Victor

AK71 said...

Hi Victor,

Well, maybe my experience is not representative because I only take the MTR from Northpoint to Hang Fa Chuen and back (HK$5.50 per trip). The route is not exactly through more happening locations, I guess. ;)

Singapore's MRT is terribly crowded. I tried taking the MRT to and from work for two days recently. It's a nightmare! Yes, experience it yourself when you are in Singapore. ;-p

Food is taken care of by the supplier now that the meetings are in full swing. I had the wanton noodles on the first night here when I arrived.

Hey, it was really good noodles and the wantons could pass off for what we get in Crystal Jade or Imperial Treasures restaurants in Singapore! Really!

5 wantons with generous fillings of prawns and pork. It would easily cost S$6 or HK$36 in Singapore! And they even gave me a complimentary glass of tea here. Not in Singapore. You are so lucky here. :)

Anonymous said...

AK

You don't happened to be in the diving industry or something ? A friend is also in that area for training and meetings during these days.

HK's MRT isn't as jam packed as Singapore for a simple reason. The train interval is as narrow as 1 min. That I don't see in Singapore. Plus there is the mini-bus (red & greens) ply routes around the neighbourhood. At the race track phase are the red top mini bus, cost almost double than the MTR but gets you there at 1/2 time.

Have fun in HK.

BTW: @ 15-17degC isn't that bad. Come 2 weeks earlier it was like 3 - 7degC.
^-^

SnOOpy168

AK71 said...

Hi SnOOpy168,

Er.. not comfy with saying which industry I am in. ;p

Yes, you are right about the waiting time for the MTR trains in HK. They are more frequent than the trains in Singapore.

Well, the SMRT is a commercial outfit and they try to make as much money as they can. I don't think the MTR is privatised, is it?

Anonymous said...

Hey AK

Sorry about that intrusion. You got my # and gimme a yell, before you head back.

MTR HK isn't just a train operator like SMRT, it also own the properties and properties management arms to handle the lease and maintenance of these A-grade malls (you know IFC Mall & office belongs to them also). Story had it that the building of the rails and structures are financed by the sale or lease of these properties.

Wishing you a good stay in this nice weather.

SnOOpy168

AK71 said...

Hi SnOOpy168,

Thanks for sharing insights on MTR as a business. :)

I am not sure if I could contact you. Been staying out late "on business". Will be the same tonight and I will be catching an early flight back to Singapore tomorrow. If I do get back to the hotel earlier and if I am up to it, I will give you a tinkle. ;)

Weather wise, I think Singapore's weather is more pleasant this time round. ;)

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