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K-Green Trust: Zzzzzzzzzzzzzzzzzz.

Friday, January 24, 2014

This blog post is in response to a comment from a reader.

When was the last time I blogged about K-Green Trust? One year ago!

See:
K-Green Trust: DPU 4.69c.

K-Green Trust seems to me to be quite lazy.


I have been waiting for them to gear up and make DPU accretive acquisitions forever! The management did not take advantage of the ultra low interest rates in the last 3 years at all to acquire assets. It is baffling.

Their portfolio of assets will run out of time gradually and some alarmists wave around banners saying "No more assets in 11 years!"

Well, not exactly. I looked at this in detail before.

See:
K-Green Trust: A bad investment?

I remember the Trust listed 4 assets to which it has ROFR. I will wait and see how things pan out but I could fall asleep while waiting.

Please wake me up if they buy something. Thank you.

11 comments:

Gary said...

Hi AK, perhaps someone will wake them up in summer time???

AK71 said...

Hi Gary,

Your guess is as good as mine. ;)

L said...

Hi AK

Thanks for this blog. Really good and helpful insights.

I intend to get some LippoMalls, Cambridge and KepReit at their current prices. Do you think they are good buys now?

For KepREIT I bought some at 1.30 earlier so I'm thinking of averaging down.

I saw that you divested large chunks of Lippo. Is it ripe to buy now?

Thanks!

AK71 said...

Hi L,

I don't know if you have been following my blogs on REITs but I have not been buying REITs in quite a while. They are more than likely to face serious headwinds in time to come.

For example, see:
2013 FY income from REITs.

This does not mean that there is never going to be a good time to buy into REITs again, of course. We just have to look out for opportunities.

With Keppel REIT, I believe that it will be more challenging as some of its income distribution is only possible because of income supports which will run out within the next few months, possibly by end of the year.

Lippo Malls, Indonesia's GDP is mostly driven by domestic consumption. So, I still like this. However, unit price could weaken further as the Indonesian Rupiah comes under pressure and Mr. Market becomes more cautious.

Cambridge Industrial Trust has performed well but it could be an uphill climb now. Industrial properties landlords all face the same problem of massive increase in supply of industrial space in the near future, far outpacing demand.

You decide. :)

L said...

Hi AK71

Thank you very much for the prompt response. Really appreciate your analysis.

AK71 said...

Hi L,

Analysis?

Oh, I was just talking to myself, as usual. ;p

betta man said...

Hi AK,

This might be an indication that K-Green Thrust might acquire something soon:

http://www.straitstimes.com/breaking-news/money/story/k-green-trust-seeks-change-name-invest-wider-range-assets-20140324

betta man said...

Hi AK,

K-Green Thrust might be acquiring something soon:

http://www.straitstimes.com/breaking-news/money/story/k-green-trust-seeks-change-name-invest-wider-range-assets-20140324

AK71 said...

Hi betta man,

This could be a catalyst for unit price to move higher. ;p

AK71 said...

Cityspring Infrastructure Trust, a Singapore piped-gas supplier backed by Temasek Holdings, is exploring a merger with Keppel Infrastructure Trust, people with knowledge of the matter said.

The two business trusts are negotiating terms of a potential deal and no final decision on whether to proceed has been made, the people said, asking not to be named as the talks are private.

A transaction would combine Singapore’s sole producer of residential gas with Keppel Infrastructure Trust, which generates power from city waste and supplies reclaimed water to industrial users.

State investment company Temasek owns 37 percent of CitySpring, which has a market value of $782 million, according to data compiled by Bloomberg.

Both trusts were halted from trading in Singapore, pending the release of an announcement.

Spokesmen for CitySpring and Keppel Infrastructure said they couldn’t immediately comment.

CitySpring units were up 2 percent at 51.5 Singapore cents at the time of the halt, headed for the highest close since June 2011.

Keppel Infrastructure gained 0.5 percent.

An average 221,600 Keppel Infrastructure units changed hands daily in the past year, compared with an average 2.3 million units for trusts listed in Singapore, according to data compiled by Bloomberg.

About 737,000 CitySpring units were traded daily over the same period, the data show.

CitySpring’s gas business generated 76 percent of its sales for the year ended March, data compiled by Bloomberg show.

The company also supplies desalinated water, transmits electricity and manages telecommunications assets.

Keppel Infrastructure Trust, with a market value of $655 million, has a mandate to invest in energy and environmental infrastructure assets in Singapore, Asia Pacific and Europe.

It is 49 percent owned by Keppel Corp, a maker of offshore oil rigs whose largest shareholder is Temasek.


Source:
http://www.theedgemarkets.com/en/node/169824

AK71 said...

Keppel Infrastructure Trust (KIT) and CitySpring Infrastructure Trust (CIT) are planning to combine their holdings in a single trust that will be the largest infrastructure-focused business trust in Singapore, with total assets of more than S$4 billion.

Under the proposed deal, KIT unitholders will receive 2.106 new CIT units for each KIT unit. KIT will also acquire a 51 per cent stake in Keppel Merlimau Cogen, which owns a 1,300 MW combined cycle gas turbine power generation facility on Jurong Island for S$510 million, the managers of the two trusts said on Tuesday (Nov 18).

The swap ratio is based on KIT's market capitalisation of S$658 million and CIT's market capitalisation of S$753 million, using their respective volume weighted average prices for the 180-day period ended on Nov 13 this year.

"With greater scale and critical mass, the combined trust will be able to better access the capital markets to pursue meaningful growth opportunities in the future," CitySpring CEO Tong Yew Heng said in a statement.

The combined trust will also give investors exposure to a larger and more diversified core infrastructure portfolio, said a spokesman for Temasek Holdings, CitySpring's biggest unitholder. Temasek will have the second largest stake in the combined trust after Keppel if the deal goes through.

KIT's assets include the Senoko and Keppel Seghers Tuas waste-to-energy plants as well as the Ulu Pandan NEWater plant. CIT's portfolio includes City Gas, Singapore's sole producer and retailer of town gas, and SingSpring, the island's first large-scale seawater desalination plant.

KIT and CIT said the transactions are subject to approval by minority unitholders, with main shareholders Keppel and Temasek abstaining from voting.

KIT was last traded at S$1.04 before its suspension last Friday, while CitySpring last changed hands at 51.5 cents

Source:
http://www.channelnewsasia.com/news/business/singapore/kit-cityspring-to-combine/1479692.html

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