Hi, I think you may have misinterpreted my earlier post. To make things clearer, I have extracted out all the dates from the press release by CapitaComm Trust regarding the rights issue.

Its not so simple: You msut consider also:

1) Peers (other reit) valuation;

2) Interest savings after repaying substantial loans, will increase profit/distrinution and not a simple profit/2, should be (current profit plus interest savings)/2;

3) Financial risk profile before and after rights - risk/returns ratio used by funs on overall portfolio mgt;  

4) Opportunity of returns after rights versus same class of low risk assets instruments (FDs, other reits) 

I think you have entirely misconstrued - or at least misinterpret - to the audience here what rights issue is all about. Firstly, the rights counter will only be in effect on SG Exchange sometime after the rights cut off date (Ex-CR). So, you can't buy into a 'rights' counter when a rights issue is taking place. Hence, investors who wants the rights entitlement will HAVE TO subcribe to this entitlement by buying into its main counter (CCT) first.

Secondly, when the rights cut-off date takes into effect, the unit owner of CCT's main counter automatically is entitled to the rights at $0.59 per piece. No More, No Less. He/she then has to decided whether to subscribe to those rights - via an ATM counter (or other means). Else he can choose to sell his rights entitlement on SGX when the rights counter is launched. This all has to be done before the cut-off date of subscribing to the rights.

Also, when the rights counter is launched, the prices between the main and rights counter reflects comparatively similar $ value(s). Mainly, through averaging the main counter's prices and the rights price.

Hence, as you can see from the above the rights issue is a multi-prong process and you can't simply buy into the rights counter. Hence, whatever theory about paying more or less doesn't make much sense.

If I'm not wrong, there will be a separate counter for trading the CCT rights entitlement.

2 ways to get the rights units for new investors without CCT main units:- Either buy the CCT main units to get the rights entitlement (1-for-1) OR buy the rights entitlement from the separate trading counter.

If the CCT main units is priced too much higher than $0.59 per unit, one may need to consider whether it is worthwhile to buy the main units in order to get the rights entitlement. However, if the separate trading counter price for the rights entitlement is priced too high, one also need to consider whether is it worthwhile to pay too much for the rights entitlement to the rights units. 

CCT is the largest office real estate investment trust in Singapore. It also have part ownership in office properties in Malaysia. I think it can be considered as a blue chip as its total assests is quite large. However, the only risk is the large amount of debts that needs to be refinanced and sitting on large amounts of debts does not sound good. This is the big risk an investor has to absorb when investing in REITs. However, the reward is the high payout in distribution income to investors (some REITs are already having 10% or more distribution yield based on current prices).

The good thing about investing in REITs is that an investor can quickly liquidate his holdings should he wants to. For example, investors who don't want to keep CCT units after annoucement of rights issue can sell off their units easily. This is better than buying actual properties whereby an investor may be stuck with the property if he cannot find a buyer when he is about to sell the property. Also, an investor needs to cough out substantial cash or get loans for buying property (easily $150 K and above). However, the amount of capital to invest in property counters or REITs is soley up to the investor's wish. If he has more money, he buys more shares or units. If he has less money, he buys lesser. 

Hi, this is just my estimate. I think they mentioned in their press release that the adjusted DPU based on $0.59 per rights unit is around 5.91 cents. This represents a distribution yield of 10% currently if one gets the rights units.

So, if an investor does not currently hold any CCT units and only want to subscribe for its rights units at $0.59 per unit, he will get around 5.91 cents DPU (~10% yield even after factoring in all rights units into the CCT units) for FY 2009.

If an investor already owns CCT units and even subscribe into more rights units, the distribution yield for him will be definitely less than 10% for FY 2009 (since his original CCT units would have been bought at higher price than $0.59 per unit).

So, it is up to an investor to decide whether subscribing for rights units is worthwhile? For new investors, he will definitely get at least close to 10% distribution yield getting the rights entitlement and rights units at $0.59/ unit and later convert into CCT units. This is better than leaving money in the bank or fixed deposits.

For existing CCT unit holders, if he has units of average unit price that is too high (e.g. more than $1/ unit), then factoring in the rights units will reduce his distribution yield significantly (significantly less than 10% yield). Even if he subscribes to the rights units, his distribution yield will still be lower than 10% for FY 2009.  

So, for existing unit holders if they don't want to see their distribution yield depreciate too much by the rights units issue, they need to subscribe for the rights units. However, then again, they need to consider carefully whether they have other better investments to deploy their money into that give more attractive returns (more than 10% returns annually) than subscribing for CCT rights units.