AIMS AMP Capital Industrial REIT: 3QFY2011.

My first night on a working trip in Hong Kong and I am having trouble sleeping although I was feeling quite tired earlier. So, I went to the reception and purchased a card which allows me to have internet access for 3 hours for a fee of HK$40. Quite reasonable, I think.

First thing I did online was to check on results announced by AIMS AMP Capital Industrial REIT. Its unit price touched 21c with 8 lots changing hands at that price in 4 transactions. Almost all of last session's trades were at 21.5c.

The recent weakness in this REIT's unit price could be attributed to some heavily vested investors anticipating a lower than expected DPU which came in at 0.51c, payable on 15 March 2011. The guidance was for 0.52c in a circular dated 22 Sep 2010. I am not at all surprised since I had expected a lower DPU of 0.5c myself when I revised the DPU and fair value of this REIT on 11 Dec 2010. Read my blog post here.

So, a DPU of 0.51c is rather pleasant for me. This could be due to the fact that "I did not take into consideration the other positive developments in the Market Update which is the 100% occupancy achieved for 15 Tai Seng Drive (85.7% as of 31 March 2010) and 23 Tai Seng Drive (84% as of 31 March 2010).  Conservatively, this should add about $400,000 to the REIT's annual rental income."

In its report, the management also said that the newly acquired property of 27 Penjuru Lane only contributed 78 days of rental income, being only acquired on 15 October 2010. So, could we expect next quarter's DPU to be marginally higher when the property contributes three month's worth of rental income to the REIT? Perhaps.

This REIT is still a strong proposition for anyone looking for a reliable stream of passive income. I have put in a BUY order at 21c in case the selling continues in the next session although I do not think anyone in his right mind would want to sell at that price.

Annualised DPU: 2.04c
Gearing: 32.7%
NAV/unit: 27c

See presentation slides here.

Win a Xbox 360 and Microsoft Kinect!

There’s a talent in every one of us…what’s yours? Are you a math genius? A comms whiz? A pro gamer? Or a born leader? Find out by playing the game: Win a Xbox 360 and Microsoft Kinect by playing ‘What’s Your Talent?’

CapitaMalls Asia: Closed at $1.90 support.

CapitaMalls Asia closed at $1.90 support today on reduced volume. My overnight BUY queue at $1.90 was filled. Lowering volume as share price consolidates at support. Nice.

MFI formed a higher low suggesting firm demand. Higher lows on the RSI suggest positive buying momentum. It is not clear yet if share price would break out of resistance next.  Immediate resistance is now provided by the declining 50dMA at $1.95 while immediate support is at $1.90.

If price should weaken and close below $1.90, I would turn cautious and stop accumulating. If the low at $1.83 were not compromised in such an instance, I would buy more as another uptrend forms. If the low at $1.83 were taken out, we would want to wait for selling pressure to peter out before venturing back in. What would be the new low then?

If price moved higher and took out resistance at $1.95 convincingly, expect resistance at $2.00, $2.04 and $2.09. As we can see, CapitaMalls Asia is not just a long term buy based on FA but one that is based on TA too. The wall of worries is a tall one indeed.

I will be going on a working trip from tomorrow and would be kept busy. I might not be able to access the internet conveniently. Although I will try to log in and update my blog, I cannot guarantee that I would be able to do it. I will be back in Singapore this Saturday. Good luck to everyone in the meantime.

Related post:
CapitaMalls Asia: Borrowing on the cheap.

Saizen REIT: Divestment of K1 Mansion Morioka

It has been some time since Saizen REIT sold any building from its YK Shintoku portfolio. It divested K1 Mansion Morioka to an independent private investor for a cash consideration of JPY 55,631,452 (S$0.9 million). This building, located in Morioka, was built in August 1995 and comprises 6 residential units and 6 parking lots. The sale is at a discount of approximately 6.7% to valuation.

Referring to the annual report, as of 30 June 2010, K1 Mansion Morioka was 100% occupied and brought in a total annual rental income of JPY6,900,000. This means a gross yield of 12.4%. A good deal for the buyer.

Following loan repayment from sale proceeds of this divestment, the remaining balance of the YK Shintoku CMBS is about JPY 5.4 billion (S$84.6 million). Considering the cash reserves of JPY 0.5 billion (S$7.8 million) maintained by YK Shintoku under the loan agreement, the net outstanding loan of YK Shintoku is about JPY 4.9 billion (S$76.8 million).