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MacArthurCook Industrial REIT

kingster
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05-Feb-2009 11:00

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just curious... if it fails to refinance, what will happen? sell its assets?

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cheongwee
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05-Feb-2009 03:25

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Well, why DPU is in share, no cash???, it must be due to credit crises causes poor earning,got no cash to give out, but to make shareholder happy give out some shares...as the matter is just report by the media and more share , will it not lead to share dilution, same as right issue...am i right?

I expect to see reit in trouble with refinancing...media report more right issue of up to 50% of share coming..showing difficulty in refinancing currently.....am i right? pls comment..thks.

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jeremyow
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05-Feb-2009 01:07

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I don't mind REITs paying out DPU in their shares. Either way, an investor stands to gain by getting cash distributions or shares distribution. As long the long-term prospects of the REIT in question is good, I think it does not matter whether an investor gets more of its shares or cash distributions. Anyway, if an investor has decided carefully to invest in a particular REIT, getting more shares is good for both the REIT and investor. The investor can have a larger position in the REIT and the REIT can conserve cash as well. A bad move by the REIT is to issue rights issue to raise cash that will dilute shareholders stake. Another bad move is to drastically reduce or suspend distribution payout. Both bad moves may indicate the REIT is facing possible bad cashflow or possibility of near term refinancing problems.

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cheongwee
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05-Feb-2009 00:05

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Have read more reit will paying out DPU in term of shares and not cash...what do u think?

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investor
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10-Jan-2009 13:35

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MacArthurCook I Reit has gone up from a recent consolidation low of 0.25 cents to yesterday's closing price of 0.315.

Based on last qtr div payout of 2.35 cents, the stock is trading at a historical yield of 29.9 %.

Most of the reits have shown improvement in share price, and Capitacomm's re-financing of their debt at approx 4 % - 4.4 % has given the mkt the confidence that re-financing should not be a problem for the rest of the other reits.

Having said that, Saizen did disappoint the mkt by going for a rights issue - the most dilutive option for a reit.

I did a stress test on MacArthurCook Reit. If the current interest cost of approx 2.7 % goes up to 7 %, their div will drop to 1.45 cents per qtr, giving an annualised yield of 18.39%, and if the interest cost goes up to 9 %, their div will drop to 1.03 cents per qtr, giving a yield of 13.04 %.

THe assumption above is that all other factors remain the same, same tenancy rentals, etc.

ALso, the company has mentioned that they are in advance negotiation to re-finance their debt (see Q209 corporate announcement in SGX) and that this should be settled in Jan 09. Let us hope that shareholdets are not disappointed, and that the company does not do what Saizen did.

Vested. Not a call to buy/sell.

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jeremyow
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23-Dec-2008 17:33

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Hmm.....I don't quite understand the business of shipping trust so I cannot do a comparison of the two. But, I am accumulating positions on MacarthurCook Industrial REIT because I believe in their long term competitive growth prospect. For example, it's management is in progress of negotiating it's refiancing and also getting funding for acquisition of Plot 4A, International Business Park in December 2009. This will increase it's total assests and future revenue. If management can continue to beef up it's assests in future at a suitable pace, this will become also one of a giant REIT. I'm having faith in this REIT because it's Australian listed parent company MacarthurCook Limited is one of the fastest growing company in Australia. Somemore, it's net assest value per share is $1.30, so current stock price is at a discount. It's average expiry of majority of leasing for rentals is around 3 to 4 years time, so it will not face drastic drop in occupany rate in near future and it's income will not be affected much. Also, it has plans to expand regionally which it has came true by already having acquired a warehousing and logistic facility in Japan. I am hoping this company will continue to stay true to their plan in local and regional expansion and also navigate through this tough time prudently. The only negative is whether it can get refinancing and funding for acquisition at suitable interest rates.

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nickyng
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23-Dec-2008 15:17

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hmm..comparing this burger and FSL ship trust...the yield looks attractive siah ! now...which has more potential ?? :D

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crimson
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22-Dec-2008 10:10

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Now not moving liao... txn kindly sloooowed down... do you think manipulation by BBs?

hsbhsb ( Date: 22-Dec-2008 09:38) Posted:

MacArthur is up 2.5 cents this morning! Now at 27.5 cents!
I guess the market decided that the yield is too attractive .....
Historical yield abt 39%. Even if DPU is cut in 2009 as refinancing costs go up, the yield wld still be fantastic.
Over 30%?
there are various points of view worth considering here: http://www.nextinsight.com.sg/component/option,com_fireboard/Itemid,67/func,view/id,636/catid,3/

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hsbhsb
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22-Dec-2008 09:38

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hsbhsb
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17-Dec-2008 09:38

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Notwithstanding the slowdown in the global economy, barring any unforeseen events or significant deterioration in the external economic environment, the Manager expects to be able to deliver a return that is in line with its recent performance for the balance of the current financial year.

The Manager is currently in negotiations in relation to a new facility to refinance the existing S$220.8 million facility

maturing in April 2009 and to provide funding for the settlement of Plot 4A, International Business Park in December 2009.

http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_4B664864DE25AB3D482574FA001A0299/$file/MI_REIT_2Q_FY09_Unaudited_Financial_Statements_final.pdf?openelement

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nickyng
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15-Dec-2008 09:31

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looks like even with confirmed loan renewal....cant cheong much leh.... :P but divy if maintain looks gd siah :P

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investor
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14-Dec-2008 21:14

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If you look at the Q3 results of all the reits, the majority reported increase in dividends. The exceptions were Cambridge Reit (due to payout of trustee mgmt fees being paid 100 % in cash, as compared to previous qtr), as well as FraserComm (formerly Allco Reit), due to their financing cost.

Like I said, one of the risks to reits is their financing cost, the majority of their income should be quite stable in the medium term as most of the tenancies are already locked in. In fact, some of the reits in the office space, like Suntec will still experience POSITIVE rental reversion, ie their rentals will go up, as the old rentals were at a very low rate (aprox $5 psf), whereas, right now, even with a 30 % drop in office space, the new rental rate will still be HOGHER than $5.00 psf.

In calculating the 29 % yield of MacArthurcook I reit, I am using a dividend rate of 1.7 per qtr, which is ALREADY down from the Q3 rate of 2.35 cents, ie I am assuming a 38 % drop in dividend !

At current price of 0.23 cents, the stock has drop from its IPO price of 1.20 - a 80 % drop in price !

Assuming that the projected rate of 1.7 cents is wrong, lets take it down to half of that, ie 0.85 cents per qtr. The yield would still be approx 15 % !

The RISK to this stock would be their inability to re-finance their loan (And that is why Cambridge's refinancing gives me optimism).

And yes, I did bought some on Friday at 0.23 cents. (My average cost is probably 0.245 cents).

In the current bear mkt, yes do be careful - anything can happen - So please do your own homework carefully.

Not a call to buy/sell.

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Nokita
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14-Dec-2008 20:24

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whatever anxiety & caution we experience, it seems that insiders have no problem accumulating.

source of this table is http://www.nextinsight.com.sg/content/view/708/60/

Reit/Shipping Trust	Buyer	Date of purchase	No. of shares purchased	Average price/share (S$)	Nov 7 price
Cambridge Industrial	Hunter Hall Investment Management	24-10-2008	2,096,000	0.25	27 cents
	UBS AG*	29-10-2008	1,044,000	Not available
	Schroder Investment Management Group*	30-10-2008	216,000	Not available
MacarthurCook Industrial	MacarthurCook Limited	24-10-2008	1,243,000	Not available	39 cents
	MacarthurCook Limited	20-10-2008	3,714,000	Not available
	Lion Global Investors	20-08-2008	936,000	Not available
Ascendas India Trust	Philip Yeo Liat Kok	31-10-2008	100,000	0.4897	55 cents
	Burton Ltd	29-10-2008	1,856,000	0.4176
Saizen Reit	ASM Asia Recovery Fund	14-10-2008	386,000	0.2895	21 cents
	ASM Asia Recovery Fund	13-10-2008	3,585,000	Not available
	ASM Hudson River Fund	13-10-2008	717,000	Not available
Rickmers Maritime	Andreas Sohmen-Pao	04-11-2008	100,000	0.45	45 cents
	Lim How Teck	16-10-2008	50,000	0.52
First Ship Lease Trust	American International Assurance *	31-10-2008	599,000	Not available	50 cents
	Cheong Chee Tham	23-10-2008	50,000	0.5175
	Philip Clausius	22-10-2008	50,000	0.5165

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cheongwee
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14-Dec-2008 18:38

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I think this dividend yield by analyst are misleading,,they are base on current share px which have been sold down in the current market with the latest dividend given out.

I do suggest caution if you really want to buy into reit and trust...pls do careful analysis..next year going to be bad for sure..

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cheongwee
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14-Dec-2008 18:25

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Of course, if you REALLY bought at 0.23c, but for other the yield will be lower as they bought at higher share px..

And the dividend will drop by 0.9c from the coming dividend which will be much lower than current one for sure., not from the previous latest distribution. Dont count your gain before result is out...and for ,many reit ..the result is going to be horriffic...celebrate only after money is in your pocket..forcasting too early before the reporting is misleading..

Just ask yourself honestly...will the result be good at current condition???vested in hyfluxwt,Parkway, and first reit...personnally don't expect them to be good, but am focus on long term...will not hestitate to cut on fundamental changes..if the result is very bad.

investor ( Date: 13-Dec-2008 23:43) Posted:

Kim Eng is indeed too optimistic - They are not taking into account the rise in financing cost.

However, it was a pleasant surprice when Cambridge Reit indicated that their dividend will drop by

ONLY 0.9 cents, after refinancing.

WHo knows - MaCarthurCook I Reit might give us a similar surprise.

Having said that, my own estimate is that their dividends will drop to 1.7 cents per qtr or 6.8 cents per

annum. Hey - I am happy with that 6. 8 cents, at closing price of 0.23 - that is a 29 % dividend yield !.

Not a call to buy/sell. Vested.

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investor
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13-Dec-2008 23:43

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Nokita
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13-Dec-2008 22:34

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recent Kim Eng forecast for MacArthur yield in 2009 looks too optimistic.
it's down marginally from 9.3 cts to 9.1 cts!
That's a yield of 40%

source: http://www.nextinsight.com.sg/content/view/737/60/

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investor
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13-Dec-2008 15:38

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One of the advantages in investing in property reits is the 'certainty' of earnings and hence dividend yields. MacathurCook I Reit has 64 % of tenants who are listed companies or subsidiaries of listed companies, and their average lease expiry is 5.1 yrs.

On top of that, they hold between 3 mths to 2 yrs worth of security deposits from their tenants, and most of the tenants will pay a built-in escalation in their rentals.

They have 18 properties, and this provides for some diversification, in the event of early termination by tenants. Even in the worst case scenario of their dividend being cut by half, the reit will still give a dividend yield of approx 15 % (base on closing price of 0.23 and the already projected reduced dividend payout of 1.7 cents per qtr)

Again, the risk to this stock is the re-financing part, and the cost of funds - If theses 2 problems are resolved, a lot of uncertainty will be removed. NOt a call to buy/sell, Investors are advised to do their own homework.

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cheongwee
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13-Dec-2008 00:02

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Your forcast payout should not base on current earning, what if next yesr the earning is down greatly and the share px tumble further if the crises worsen, which is very likely....no one can tell or know...but one thing for sure..it is down for sure... You can Buy capitaland at 1.7 ..someone said i wont be able to get, but if it go to that come next year, we will be too scare to buy, cause we think it will go down further...right???..currently dont have this..those who got this dont need to be scare, it is too big to fail with alot of cash..and i can see this a multi bagger when the bull return....my guess...12 buck easily..just my guess...inflation adjusted...

investor ( Date: 12-Dec-2008 23:01) Posted:

Now that Cambridge Reit has finalised the re-financing of its 390m debt, at 6.6 % interest cost (at a lower rate than what the mkt was expecting), the reduction to its annual dividend is a mere 0.9 cents less, there should be cause for optimism for MacCookIreit. Like Cambridge, Maccook has a approx gearing of 39%, with an outstanding loan of approx 220m. Assuming that the interest cost increased by 3 %, additional financing cost would be 3 % of $220m = approx $6.6m. This works out to approx $1.65m extra interest cost per qtr. As MacCook paid out $6.13m for last qtr (Q209), the net effect would be to reduce dividend payout to $4.48m. This means that dividend would be cut from 2.35cents to approx 1.7 cents, still giving an annualised yield of 29 % based on the closing price of 0.23. THe main concern in the mkt was whether MacCook would be able to re-financing its debt, and the success of Cambridge should ally this concern. Secondly, the assumption of an increase of an extra 3 % in interest cost is a conjecture on my part - Investors should do well to do their own analysis. My calculations above are assumptions and I hope that I did not calculate the figures incorrectly ! Vested. Not a call to buy/sell.

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investor
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12-Dec-2008 23:01

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