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Saizen REIT: YK Shintoku's CMBS repaid.

Wednesday, June 1, 2011

The Board of Directors of Japan Residential Assets Manager Limited, the manager (the “Manager”) of Saizen Real Estate Investment Trust ("Saizen REIT"), is pleased to announce that the loan of YK Shintoku had been fully repaid on 31 May 2011 (the “Repayment”).

Following the completion of the Repayment and the cancellation of the mortgage over YK Shintoku’s property portfolio, YK Shintoku’s portfolio of 27 properties which is valued at approximately JPY 4.3 billion (S$65.6 million) will become unencumbered. Together with the property portfolios of YK Keizan, YK Shingen and GK Chosei, the total value of Saizen REIT’s unencumbered properties will amount to approximately JPY 14.9 billion (S$227.5 million).

After the Repayment, Saizen REIT’s borrowings comprise five loans amounting to approximately JPY 9.0 billion (S$137.4 million), with the nearest loan maturity due in June 2013. Saizen REIT’s gearing after the Repayment is approximately 24%.

Verify announcement here.

This is, of course, what I have been waiting for since I started investing in this REIT in late 2009. It is really a pity that the triple disasters hit Japan when it did. Otherwise, I have no doubt that Saizen REIT's unit price would be much higher than it is now.

As it is now, technically, further upside could be capped at 15.5c while downside could be limited at 14.5c. Could the repayment of YK Shintoku's CMBS provide a strong enough catalyst for the REIT's unit price to breakout on the upside?

Related post:
Saizen REIT: Sanity prevails with more good news.


Anonymous said...

Hi AK,

You may wish to read the June newsletter from Saizen Kakehashi about Sendai.

Thing seem to be better then expected.


AK71 said...

Hi K,

Things are looking up for Saizen REIT with its last CMBS repaid and its gearing level in the mid 20%. It is also fortunate that Saizen REIT's properties in the affected areas are largely intact.

I still have a rather significant investment in the REIT and it remains to be seen if Mr. Market would price it fairly in the future.

Thanks for sharing. :)

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