AIMS AMP Capital Industrial REIT: 2Q FY2011.

The REIT saw lots of buying interest today as more than four fifth of the 49 trades were Buy Ups at 22.5c, a total of 1,613 lots out of a total of 1,923 lots that changed hands. I guess market participants were expecting a good set of numbers today as the management reported on its 2Q FY2011 results after market closed at about 7pm.

DPU for the quarter which would be payable on 17 Dec 10 is 0.3968c instead of the anticipated 0.52c.  This is because of the issue of 513.3 million rights units on 14 October 2010 and 7.2 million units to the Manager on 19 October 2010 for payment of the acquisition fee in relation to the acquisition of 27 Penjuru Lane.

Distributable income from 27 Penjuru Lane would be included in the next distribution, not this one, since the acquisition was done in 3Q FY2011 and not in 2Q FY2011.  Expect the DPU for 3Q2011 to be much higher, therefore.

Substantial Unitholders:
16.07%  AMP Capital Investors (Luxembourg No. 4)
11.46%  Dragon Pacific Assets Limited
9.45%   APG Algemene Pensioen Groep N.V
8.24%   Universities Superannuation Scheme Limited
7.65%   George Wang

I have mentioned a few times before that I am waiting to accumulate more at 21.5c. The last time I said this was on 25 Oct: "A reason why I am not in a hurry to accumulate is because I already have a sizeable investment in this REIT. I don't need to accumulate at 22c. I can wait. The technicals suggest that waiting might not be a bad idea too."

If there should be some panic selling next Monday, I would be ready to buy more.

See presentation slides here.

Related post:
AIMS AMP Capital Industrial REIT: Accumulation price?

FCOT: Testing supports.

On 22 Oct, when I blogged about FCOT turning around, I suggested that 17c is a formidable resistance and we know that buying at resistance is not a good idea. We want to buy at supports and, strictly speaking, these supports should be confirmed.

"FCOT has probably turned the corner and the numbers speak for themselves. However, would I buy at the current price level? The encouraging numbers could give FCOT's unit price a lift upwards but it is obvious to any chartist that 17c is the immediate resistance. 17c is the top of a base formation and a thrice tested resistance level in mid-January this year....

"From the looks of it, volume seems to be reducing since hitting a high on 24 Sep. In subsequent up days, volume had been lower. So, it could turn out to be a case of "sell on news". Immediate support is at 16c but I see a stronger support to be provided by the 50dMA which coincides with an uptrend line.  That might be a better entry price.  I do not like to chase."

Closing today above the 20dMA at 16c shows that the shorter term uptrend is still intact although price did touch an intra day low of 15.5c.

What are the chances of price declining further? No one can say for sure but it is obvious that upside momentum is somewhat limited with the RSI forming a lower high and the MACD poised to form a bearish crossover with the signal line.

Although the MFI has formed higher lows, which suggest sustained demand, we could see it retreating to retest its uptrend line or 50%.  So, I won't be surprised to see price declining a tad more and/or volume declining further.

With the fundamentals having improved, buying in at 15.5c or 15c seems like a good idea for a possible annualised DPU of 1.24c, assuming that the last quarterly DPU of 0.31c is sustainable.  This would translate to a yield of 8% at the entry price of 15.5c.  Pretty decent.

Related post:
FCOT: Turning around.

Saizen REIT: Divestment of Kamei Five.

Saizen REIT's YK Shintoku portfolio divested a smallish property, Kamei Five, today for JPY 70,401,250 (S$1.1 million). This piece of real estate is located in Hiroshima, was built in July 1989 and comprises 22 residential units, 2 commercial units and 2 car park lots.

A quick check in the annual report shows that Kamei Five was 92% occupied as of 30 June 2010 and took in JPY 9.9 million in annual rental income. That represents a gross income yield of 14%! What would I not do to buy a building from YK Shintoku's portfolio.

"Following loan repayment using sale proceeds from the divestment of Kamei Five, the remaining balance of the loan of YK Shintoku is estimated to be approximately JPY 5.9 billion (S$94.6 million). Taking into account applicable cash reserves of JPY 0.6 billion (S$9.6 million) maintained by YK Shintoku under the loan agreement, the net outstanding loan of YK Shintoku amounts to approximately JPY 5.3 billion (S$84.9 million)." Read announcement here.

On another matter, Saizen REIT’s quarterly financial results for the period ended 30 September 2010 will be released before market opens on Wednesday, 10 November 2010.

Related post:
Saizen REIT: AGM on 19 Oct 10.
Saizen REIT's properties: Would I buy?

Suntec REIT: BUY calls.

Suntec REIT is enjoying BUY calls from DBS Vickers and CIMB even as it prepares to acquire a one third stake in MBFC. Some salient points:

DBS Vickers

The group revalued up portfolio by 3.6% translating to NAV of $1.828/share. Going forward, Suntec has c14% of office and 27% of retail NLA due for reversion in 2011 and we expect office rents to show some uptick while retail component to remain stable.

Recent refinancing exercise of $700m due in FY12 are likely to lower its current overall cost of debt of 3.77% as the new loans were concluded at a lower spread of 1.5%, as well as smoothen out the group’s debt maturity profile.

We are tweaking our FY11 numbers by 3.1% to reflect the impact of recent refinancing exercise but exclude the effect of the MBFC1 acquisition. Maintain Buy call pending more information on the transaction. Based on FY10 and FY11 DPU of 9.8cts and 9.7cts, Suntec is trading at decent DPU yields of 6.3-6.2%. Our target price of $1.66 offers 12% total return.

CIMB

3Q10 NPI grew 7.6% yoy, led mainly by a 2.1% yoy increase in gross revenue on stronger office contributions and a lower property tax. Portfolio occupancy continued to strengthen on the back of better office occupancy which mitigated lower retail occupancy in the quarter.

Our DDM-based target price, however, has been raised to S$1.63 (discount rate 8.1%) from S$1.60 as we roll over to end-CY11. Maintain Outperform on further improvements in the retail and office outlook. We see near-term catalysts from more concrete signs of DPU accretion from the latest acquisition.

I would wait for the circular on the proposed acquisition and method of financing to be released to unitholders before commenting further.

Related post:
Suntec REIT: MBFC.