Marco Polo Marine: Bracing news from Indonesia.

Some news from Marco Polo Marine's subsidiary, PT Pelayaran Nasional Bina Buana Raya Tbk:

1. They are seeking to purchase another new AHTS before the end of 2013. I like this because this will allow them to capitalise on the higher rates in Indonesia more rapidly.

2. The management is projecting at least a double digit growth in revenue and profits in 2013!

Things are looking pretty good and the Indonesian growth story is cruising ahead at full steam.

Would I buy more of Marco Polo Marine's stock?

If Mr. Market is willing to sell to me cheaply again, why not?

Related post:
Which stocks have I been accumulating in June 2013?

Reference:
RESUME HASIL PAPARAN PUBLIK TAHUNAN

OUE Hospitality Trust: Considerations and comparisons.

Some might be more interested in OUE Hospitality Trust than SPH Trust because the distribution yield the former has promised is higher at 7.46% compared to the latter's 5.79%. 

Although the two are not strictly comparable since they are holding different types of real estate, let us look past that for now and just concentrate on the numbers to see which one is a better deal.

Mandarin Hotel.

OUE Hospitality Trust is being offered at a small discount to NAV while SPH REIT is being offered at a small premium to NAV. Oh, I like a discount!

OUE Hospitality Trust is going to have a gearing level of some 32.8% while SPH REIT's gearing level is 27.3%. Oh, I like SPH REIT more now because its gearing level is lower.

Leverage, of course, makes it harder to see the underlying yield. If we were to remove leverage and assume that there was none, we see that OUE Hospitality Trust approximately yields 5.62% while SPH REIT yields 4.55%. The former still gives us 1.1% more a year!

SPH REIT's Clementi Mall.

OUE Hospitality Trust has 2 properties and apparently they have 44 years left to their leases. SPH REIT has 2 properties too. The Paragon will have a fresh 99 years lease while Clementi Mall has a few years lesser than that. I like longer leases, for sure.

So, although OUE Hospitality Trust is able to generate 1.1% more return per year compared to SPH REIT, the life of its assets is less than half of SPH REIT's, assuming the status quo is maintained.

Ariake Sunroute Hotel

OUE Hospitality Trust is a stapled security and not a REIT per se. I have blogged about Ascendas Hospitality Trust before which is also a stapled security. For anyone who might want to find out more about this, I have provided the link at the end of this blog.

Like OUE Hospitality Trust, Ascendas Hospitality Trust also had its IPO priced at 88c.

Ascendas Hospitality Trust last traded at 85.5c which is still at a slight premium to its NAV. At 85.5c, it has an estimated distribution yield of 8.57% and a gearing level of about 35%. 90% of its assets are in Australia and Japan. These are freehold in nature!

AK is just talking to himself.


Related posts:
1. Ascendas Hospitality Trust.
2. SPH or SPH REIT?