General S-REITs Discussion Thread

[Bedokian]

Since the beginning of the year until now I had reduced my REITs component in my portfolio from 44% to 36%. But I would still go for a bargain if the particular REIT that I am eyeing or I am holding onto now is ripe.

Interest rate hike or not, I still view REITs as an important dividend generating asset, which is now averaging 6.6% yield (data courtesy of reitdata.com).

 

[cloudfire]

Any idea this acquisition will be funded by what? Rights? Placement? Debts?

SINGAPORE: CapitaLand Mall Trust (CMT), Singapore's largest shopping mall trust, will buy Bedok Mall from sponsor CapitaLand in a deal that values the mall at S$780 million.

The 222,500 square foot Bedok Mall, which opened in December 2013, is part of an integrated retail-residential-transport development at Bedok Town Centre that includes the 583-unit condominium Bedok Residences developed by CapitaLand.

The mall’s Basement 2 is directly linked to the Bedok MRT station, while the new air-conditioned Bedok bus interchange is integrated with the mall on Level 2. Bedok Mall's key tenants include Fairprice Finest, UNIQLO and Best Denki.

"The proposed acquisition of Bedok Mall complements CMT’s current portfolio of mainly suburban malls catering to the necessity shopping segment," Mr Wilson Tan, CEO of CapitaLand Mall Trust Management, said in a statement.

"It will increase CMT’s asset size from S$10.2 billion as at 31 March 2015 to about S$11 billion," he added.

CMT's properties include Tampines Mall, Junction 8, Funan DigitaLife Mall, IMM Building, Plaza Singapura, Bugis Junction, Sembawang Shopping Centre, JCube, Clarke Quay and Raffles City Singapore, in which it has a 40 per cent interest.

CapitaLand Mall Trust Management is an indirect wholly-owned subsidiary of CapitaLand.

I miss this S REIT thread by DW.

Bumping to revive. And yay for CMT!

 

[SpeedingBullet]

Any idea this acquisition will be funded by what? Rights? Placement? Debts?

No one knows, will be announced later, but might be a usual mix of debt + equity raising.

Basically... CMT will pay S$795m in total.

Of which, 72m new units will be issued to Capitaland first, which is $155.52m (based on ytd price of $2.16). So that's S$639.48m left to pay.

If they go all-equity, it's equivalent to issuing 296m new units, abt 9% total shareholder dilution including the 72m.

Or if they go full-debt, their gearing wld increase from 32.1% to around 36%? Still within limits but it will be their highest ever gearing ratio (iirc they've not surpassed 35% in years). Their current interest cover ratio is 3.93, not THAT great, and if rate hikes happen before they issue new debt, it will be quite destructive to their bottom line.

In the announcement they said the property yield for BM is about 5.1%, so if the cost of capital exceeds that, misewell don't buy LOL. Might wanna calculate their current WACC to gauge.

So highly likely they will go both equity + debt. JM2C.

P.S., Capitaland is only making $30m worth of profits from this sale.

 

[ValueInvestor]

base on analyst briefing

CMT said will use around 20% equity and 80% debt for this deal

so placement or rights will come for sure

 

[ValueInvestor]

additional details

the 20% equity is consideration units to cap land

which also the same as doing placement, but to the parent only

retail investors no need fork out extra $$

but u face a bit of dilution

cheers

 

[SpeedingBullet]

base on analyst briefing

CMT said will use around 20% equity and 80% debt for this deal

so placement or rights will come for sure

additional details

the 20% equity is consideration units to cap land

which also the same as doing placement, but to the parent only

retail investors no need fork out extra $$

but u face a bit of dilution

cheers

so in short raising of debt worth abt $600mio? Do they (CMT) have an ongoing loan facility?

 

[ValueInvestor]

so in short raising of debt worth abt $600mio? Do they (CMT) have an ongoing loan facility?

usually is bridge loan first

then follow by long term loan via sale of bond or bank borrowings

gearing will shoot up to 37-40%

 

[sandwicher]

SINGAPORE: Retail sales in the Republic rose 6.1 per cent in May compared with the previous year, mainly due to a spike in sales of motor vehicles, the Department of Statistics said on Wednesday (Jul 15). Excluding motor vehicles, retail sales rose 0.9 per cent compared with a year ago.

Compared with the previous month, retail sales rose by 2.4 per cent in May. Excluding motor vehicles, retail sales increased 1.8 per cent.

The total retail sales last month was estimated at S$3.5 billion, up from S$3.3 billion the year before, according to the Department of Statistics.

Retailers of motor vehicles recorded a sales increase of 46.6 per cent in May compared with the previous year. Retail sales of medical goods and toiletries also increased, rising by 10.3 per cent year-on-year. Sales of department stores, supermarkets, mini-marts and convenience stores and watches and jewellery also increased between 1.3 per cent and 4.9 per cent.

In contrast, retail sales of petrol service stations and recreational goods decreased 16.2 per cent and 11.9 per cent, respectively. Similarly, sales of optical goods and books, telecommunications apparatus and computers, food and beverages, furniture and household equipment, and wearing apparel and footwear declined between 1.1 per cent and 8.3 per cent during the same period.

Sales of food and beverage services fell by 3 per cent from the previous year. The total sales value of food and beverage services in May was estimated at S$650 million, down from S$670 million the previous year.

The Retail Sales Index and the Food and Beverage Services Index measure the short-term performance of retail and F&B service industries based on their sales records. The sales figures exclude taxes such as GST and COE.
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Preview for retail REIT results.

 

[ValueInvestor]

CCT hits 1.50 critical support

Patient now is in ICU, will the doctors be able to revive the patient? Or will patient gg?

 

[SpeedingBullet]

usually is bridge loan first

then follow by long term loan via sale of bond or bank borrowings

gearing will shoot up to 37-40%

No my qn is, do they have an existing revolving loan facility. All those normal loan thing everyone knows liao.

errr how wld gearing shoot up to 37-40%?

 

[ValueInvestor]

No my qn is, do they have an existing revolving loan facility. All those normal loan thing everyone knows liao.

errr how wld gearing shoot up to 37-40%?

The gearing level is base on what i read from analyst report de, wait a while for the actual details ba

Mostly listed companies in general has loan facility on standby de, so that they can tap for cash anytime they want. But for drawing down from loan facility is expensive, so usually when doing a deal, inital payment is use a cheap bridge loan first, follow up by long term debt or equity funding

 

[pete10pete]

what is the average yield for REITs in sg now?

 

[teerance85]

According to reitdata.com,

Avg yield is 7.542%

 

[ValueInvestor]

what is the average yield for REITs in sg now?

about 7%~ish++

10 year risk free bond is 3.7%

so risk premium around 3.5%++ about there

 

[teerance85]

Jiak MCT.

Riding on the Vivo wave!

 

[Dividends Warrior]

Jiak MCT.

Riding on the Vivo wave!

Well done!

Another round of CDs coming next month.

 

[donald83]

anyone still vested/investing in REITs?

 

[Perisher]

anyone still vested/investing in REITs?

Me. Plife, cmt, Aims. O, OHI.

 

[thegodfather]

anyone still vested/investing in REITs?

yes me.. i am eyeing a few but i only have so much of $$ which should i consider?

asian pay <- yummy dividends been sold down quite abit
first reit <- been sold down quite abit too
solibuilds <- went up today quite abit but attractive yield but i have other industrial reits hence... hmmm

Ascendas <- godfather of reits but yield is around 6% only


what do you think?
current reits I am holding is aims amp and cache which are industrial reits
devested my lippo awhile back.

 

[xshinado]

anyone still vested/investing in REITs?

Me! I have FCT (DY:6.40%), AIMSAMP Cap Ind (DY:8.19%) and Viva Ind (DY:10.15%) currently.
What else worth to add in? Suggestion?