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Saizen REIT: Divestment of Kinyacho Grande.

Wednesday, March 9, 2011

Saizen REIT divested another property, Kinyacho Grande, which is located in Hiroshima, from the property portfolio of YK Shintoku. It was built in January 2004 and comprises 50 residential units and 8 parking lots.

The property was sold to an independent private investor for a cash consideration of JPY 390,000,000 (S$6.0 million).  This was at a 6.9% discount to the property's valuation of JPY 419m.

The original balance of the YK Shintoku Loan was JPY 7.953 billion (S$122.4 million). The application of (i) net sale proceeds totaling JPY 2.2 billion (S$33.8 million) from the divestments of 18 properties of YK Shintoku and (ii) operational cash flow of YK Shintoku of JPY 0.4 billion (S$6.2 million) towards loan repayment had reduced the balance of the YK Shintoku Loan to JPY 5.4 billion (S$83.1 million) as at the date hereof. Following loan repayment from sale proceeds of the Current Divestment, the remaining balance of the YK Shintoku Loan is estimated to be approximately JPY 5.1 billion (S$78.5 million).

Taking into account applicable cash reserves of JPY 0.4 billion (S$6.2 million) maintained by YK Shintoku under the loan agreement, the net outstanding loan of YK Shintoku amounts to approximately JPY 4.7 billion (S$72.3 million).

Lots of buying up of Saizen REIT units lately. This morning, it touched 17c/unit with 408 lots bought up at that price. Is the market warming up to the REIT once more?


Raelynn said...

saizen's appreciation (if it happens) is one that will take a very very long time, because first they will divest (hopefully at a marginal profit) to finance and improve their credit ratings, then accumulate sufficient money to acquire and increase revenue and profit. the reit prices might go higher with each positive profit margin divestment or news that their debts and credits are getting into better shape.

oh and AK, congrats on your silver investment profit *winks*. still trying to find more cost effective ways for budget silver investment.. is there a way for me to view historical silver prices??

AK71 said...

Hi Raelynn,

I believe that there is limited downside for Saizen REIT both fundamentally and technically. Things could only get better and it has been getting better.

In the meantime, there would be spikes and lulls in its unit price which could present trading opportunities. ;)

Historical silver prices? You will find everything you need here:

Good luck. :)

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