Why is Suntect Reit dropping?

[Andrew833]

wont go below $1.08?

Don't know

 

[Andrew833]

Went back up haha

Still early

 

[zened88]

Revenue from shops will be hit badly, because nobody shops now. Rental cannot be paid and Suntec REIT management agreed to pass the rebates to the tenants, hence lesser revenue.

Not only that buddy - as revenue from leases falls so with the valuation of the property via the DCF model.

All properties have their loans still outstanding so if they go below the value of their loans, the banks will want a cash top up first.

Thats when rights issues happen and if you can buy in the rights issues you're going to be diluted.

SPH REIT already set up the cut in dividend payouts yesterday - expect the rest to follow.

 

[BBCWatcher]

I agree with you guys, Suntec REIT is sitting on some very good quality assets.

Are they?

Virtually the entire business world is right now discovering just how productive it can be having its office employees working from home. (Answer: Quite productive, actually! Some pioneering companies already figured this out a long time ago.) I wouldn't rule out the possibility that Suntec REIT now owns "white elephants."

However, presumably Suntec REIT will continue to have some positive value. It's just hard to predict.

 

[simon_84]

Commercial and industrial reits will find it tough in their rental income when their office based tenants work from home.

 

[BBCWatcher]

Speaking of office real estate, the business press is reporting that Softbank has backed out of its tender offer for WeWork.

 

[qrcode]

looks not only Suntec, many other Reits also dropped (Mappletree, etc), dont know why

 

[Iyarash11]

suntec went back up.
the wait continues

 

[lasnoblur]

Commercial and industrial reits will find it tough in their rental income when their office based tenants work from home.

yes. definitely. however most already sign contract before hand.

and many jobs actually able to work from home if IT infrastructure of company can support.

 

[Iyarash11]

strong support

 

[Iyarash11]

lai liao lai liao

 

[Andrew833]

4.17% drop

 

[endlssorrow]

Time to buy in liao
Else miss again

 

[BBCWatcher]

however most already sign contract before hand.

"But I've got a contract!" That's funny.

1. Many businesses go out of business, and in that event rents aren't paid and leases are unenforceable. Those particular contracts can be worth less than the paper they're printed on.

2. Every month a certain percentage of leases comes up for renewal.

3. Some leases have operable exit clauses in various situations.

4. Tenants frequently renegotiate leases. That's going on right now, and (in fact) the government is insisting on it -- that landlords pass along property tax concessions, for example. The government might not only insist but legally require it. Ordinarily landlords would try to keep property tax savings. Not now. Landlords that refuse to renegotiate leases are could see #1 or #2 occur (#2 with non-renewal).

5. Landlords are unable or less able to roll over their debt loads when their properties are worth less, and they're now worth less. Lenders and bond markets constantly reevaluate risks.

 

[weng0202]

Time to buy in liao
Else miss again

Wait for below $1 lah.