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Sabana REIT: 3A Joo Koon Circle and 2 Toh Tuck Link.

Friday, September 16, 2011



Sabana REIT is acquiring two more properties.

1. 2 Toh Tuck Link
Price: $39.8 m
Remaining lease: 45 years

2. 3A Joo Koon Circle
Price: $40.2 m
Remaining lease: 36 years

The purchases will be financed by debt.
With these acquisitions, gearing will be raised 33.7%.


Technically, trading of Sabana REIT's units is seeing decreasing volume as price hits a stubborn resistance at 89c. Although the MACD is rising, it is still in negative territory. A retest of support would be nice before a stronger push to break resistance.

If 89c resistance could be taken out convincingly, I expect the next major resistance to be at 92c, which was formerly an important support. Before that, there is 90c to contend with. 90c is also where we find the declining 50dMA.

I could buy more if the support at 88c should be tested in the near term.

See announcements here:
3A Joo Koon Circle
2 Toh Tuck Link

Phillip Securities: BUY. Target: $1.12.


20 comments:

Marti said...

Hi AK71! Speaking of Sabana REIT, my bank charged me a withholding tax of 17% on all of their last dividend. Is this the same for everyone or did my bank make a mistake?

AK71 said...

Hi Marti,

This is the first time I have heard of this.

Income distributions from S-REITs are tax free. This is a big incentive for investors.

You might want to double check with your broker.

INVS 2.0 said...

Hi AK71,

What's target price of $1.12?

AK71 said...

Hi INVS 2.0,

That is Phillip's target price for Sabana REIT. You will have to mouse over and click on the link to read more about it. :)

INVS 2.0 said...

Hi AK71,

Ya. But what is a target price? The highest price it could reach in the near-future?

AK71 said...

Hi INVS 2.0,

I have no idea although I have stated that 92c is the next major resistance to watch out for.

I also drew lines showing where I think are the resistance levels after 92c.

The analysts at Phillip Securities obviously know something I don't. ;)

Anonymous said...

@Marti - 17% !!! Thats as high as company income tax. You should ask your broker for more info to clarify this.

My guess is perhaps you are deemed as "non resident" (i.e. non Singaporean individual) or some company ownership of the shares. Terms of which is beyond my humble knowledge.

Do let us know the outcome. Wish you get your 17% back.

SnOOpy168

Hwang said...

I think they believe that Sabana should worth $1.12.

AK71 said...

Hi Hwang,

Yes, that's what Phillip Securities believe from a FA perspective.

My own fair value estimate from a FA perspective is not far off at $1.10. Why? That is when the distribution yield approximates 8% compared to the current 10%.

However, FA is about value and TA is about price. Having a fair value estimate does not mean that price could go that high anytime soon.

AK71 said...

Hi SnOOpy168,

You could be right. Marti should give his broker a call, of course, to clarify the matter.

Marti said...

Thanks AK71 and SnOOpy168, have filed a complain with the bank. It seems because of the way the units are held in custody, I did not benefit from my individual resident status.

Marco said...

I suppose there is no withholding tax to non Singapore resident individual as well.

AK71 said...

Hi Marco,

You are a non-resident of Singapore. Did you have the same experience as Marti or did you get the full payment?

Marco said...

I am a new S-REIT investor, haven't earn my first dividend yet. If not mistaken, it shall be tax exempt for foreign individuals.

FoodieFC said...

Hi

I queued at 0.88 for the past 1 and a half weeks. But did not get it. In the end, on fri, I went in at 0.885 to add on to the ones I have.

So good luck hope it goes up. even if it does not, staying at this price and getting dividend is good for me.

AK71 said...

Hi FoodieFC,

I am still in the queue to buy some at 88c but, like you, I nibbled a bit at 88.5c. It is, after all, only 1 bid above 88c. Nibbled since this is just a hedge. :)

AhJohn said...

Queue the order for 1 week? Which broker you use?

I use DbsVickers, normally place "good for today", and I don't see an option to place for days.

AK71 said...

Hi AhJohn,

I place my orders every night. ;)

Anonymous said...

i was also waiting for 88c for almost 2+ weeks. In the end, got some at 88.5. Heng ah. it gone to 89.5 today. With this, my avg price will bring the yield to 9+ %. Very very acceptable for the cash account, but the CPFIS is still in the red. :-( All gains wiped out at the recent correction. Looked like i have to eat myself for the year on this counter.

AIMS - I saw 20/20.5 all the time. However I tried to queue @ 20c at the same period, never get. Where did I go wrong leh ?

SnOOpy168

AK71 said...

Hi SnOOpy168,

Well, it is just luck of the draw sometimes. Nothing wrong. :)

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