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Singapore REITs still offer some upside in M&A plays says UBS in note. Broker says S-REIT sector failed to see consolidation so far but has seen management changes at Allco , Cambridge Industrial, strategic review at Macquarie Prime REIT. Advises investors to buy into MacArthurcook Industrial REIT, rated Buy with $1.30 target. Macquarie Prime rated Buy with $1.42 target; Cambridge Industrial rated Buy with $1.03 target. Says, Macquarie Prime's strategic review "lost momentum," but "current price may potentially attract new suitors which could want to privatize the REIT to access the trophy assets in the REIT." General offer for MacArthurcook Industrial unlikely, but could be upside if REIT re-branded, new sponsor seeks to increase stake. Adds, Cambridge Industrial may benefit from re-branding.
This post is for sharing, if int rate go up come sept. all reit have much more to go down. Most of them got heavy borrowing.
If want to buy , buy in trenches. But the risk is greater than not buy.
Wait and patient .DYODD
1929, and now.is different..as of now i think a 10% from current will be more reasonable. 20% a miracle.
Yes, interest rate got to exceeed inflation if u want to fight inflation. And with the whole world infaltion running at double digit. You think there will no be global recession?
Worst is stagflation. Now, the authority is at a lost of what action to take next.
It will be a long time for the whole world to digest the messes.
Still i believe there will be a goodbye kiss to 3300 before we see the worst. The best direction to take as we not sure what morrow will bring is still sell to strength and wait on the side line for surge to start.
http://www.kitco.com/ind/nichols/jun122008.html
This is hard time for fed, they should be reducing rate if not for the weak $. Housing is still in trouble. And with weak $ come high commodities px. Job losses escalated.
This is the beginning of stagflation. which will lead the whole world into a long recession, hopefully not depression.
After reading, then check back , found the dow rally 20% over prior to the 1929 crash..that is the last goodbye kiss David is talking about.
Hope for the best. good luck DYODD
Singapore REITs may face strong headwinds amid steepening Singapore bond yield curve, potential risks of higher interest rates, says Kim Eng Securities. Notes 10-year bond yield has spiked more than 100 basis points to 3.5% in past two weeks - fastest pace in 26 years - on inflation fears (Singapore's May CPI reading at 7.5%); "the issue here is that S-REITs will face difficulties in securing long-term funding to fund their acquisition growth and/or refinance short-term borrowings." Says current yield spread between S-REITs and 10-year SGD bonds has narrowed to under 200 basis points (below historical average), making REITs unattractive.
Credit Suisse maintains Market-Weight on Singapore REIT sector, says retail REITs look best bet at present. Broker tips retail REITs to achieve decent rental growth driven by healthy retail sales, domestic consumption. Says new retail supply likely to be absorbed by growing demand, unlike office sector where demand appears to be dwindling, future supply looks excessive. Among large caps, says top picks are CapitaMall Trust, CapitaCommercial Trust both rated Outperform with target prices of $3.96, $2.78 respectively. Also likes Ascendas REIT for its defensive earnings profile, has Outperform rating with $2.86 target price.
Macquarie keeps Singapore REITS as largest overweight position in regional property portfolio. "Despite higher inflation and interest rate concerns, we reaffirm our preference for S-REITs given compelling valuations, earnings security and pricing power." Notes 10-year Singapore bond yield has risen sharply over past two weeks, reflecting inflation concerns; but adds, raising risk-free rate assumption by 50bp to 3.50%, would lower valuations by only 9%-16%, still offering significant upside from current share prices. Says views Asia rental-oriented property vehicles as better inflation hedges than development-oriented stocks. "We like the S-REITs over developers and prefer those with strong sponsors and healthy balance sheets." Tips key picks as CapitaCommercial Trust, CapitaMall Trust and CDL Hospitality Trust.
Recent pullback in REITs due to inflation, interest rate hike concerns has made sector more attractive, offering opportune time to accumulate, says UOB KayHian. Says average distribution yield for S-REITs is 5.5%, in line with 5-year average. Likes Frasers Centrepoint Trust for FY08 distribution yield of 6.24%, a spread of 2.55% over 10-year S'pore government bonds. Notes A-REIT offers FY08 yield of 6.88%, while CCT trades at 25.4% discount to NAV of $2.79/unit. Keeps Buy call on Frasers, A-REIT, CCT, with respective target price of $1.55, $3.00, $2.63.
Cambridge Industrial Trust and MacarthurCook REIT rose after OCBC research said these REITs were M&A targets following regulatory changes in the sector.
Securities Industry Council said last week that any party that acquires at least 30% of a REIT must now make a general offer for the remaining units.
The move provides more clarity on M&A rules for Singapore REITs, OCBC analyst Winston Liew said in a client note. Liew added that M&A was a growth opportunity for REITs operating in the current competitive market, where there are fewer properties to buy due to the property up-cycle.
"We see the likely winners in the new M&A rules to be those trading with higher yield and low price-to-book relative to their peers in the same sector," noted Liew, pointing out other M&A candidates such as Allco Commercial REIT , Macquarie MEAG Prime REIT and First REIT.
FIRST REITS 76 cents liao.... up up up for my REITS Investment
Thanks for the reminder, terencefok. At last closing price, it works out to be 7%+, also not bad.
But I quite up to the limit for CPF, guess have to think again...
Hi ultrameg, launch some time ago. don't get mistaken by the upcoming one, it is MacarthurCook Industrial REIT. anyway, MacarthurCook Property Securities Fund has paid a dividend of 2.375 Australian cents for the 3 months to 31 March, if you calculate its yield on an annual basis, it easily works out to at least 8%.
Not sure about MacarthurCook Property Securities Fund? Had it launch yet?
I will hold on to my FIRST REITs. So far, I had noticed that there is support around 0.74
Asian is aging, FIRST REITs will outperform in the future.
For those who are still new to REITs, read on
http://www.helium.com/tm/216915
Hi all, any views on MacarthurCook Property Securities Fund? Heard they target yield of 8%
I had got 20,000 shares from FIRST REIT today. Thanks to punter2006.
Since the industry that the FIRST REIT focusing is relatively new, I believe it will have a great potential in the future.
Welcome to any suggestions and feedbacks.
Based from the information in the article below:
http://www.helium.com/tm/216915
Which will have a better prospect in REITs Investing?
In terms of blue chip status and moderate yield - Capitalmall and Ascendas are the obvious choice.
In terms of aggressive acquisition growth, Capital Retail China, CCT and K-reit are the ones to choose - but they have the lowest yields, reflecting the fact that the growth has been factored into the price - to what extent, is anybody's guess.
For dark horses - I would think that MMP Reit, Mapletree are my choices. For MMP Reit, yield is reasonable, but they have yet to do any acquisition (they promise one acquisition by 1st half 2007).
For Mapletree - the yield is also reasonable, and they still have quite an acquisition pipeline for 2007 - probably 1 billion.
Suntec yield is reasonable, compared to CCT, Capitalmall, K-reit, but is does not have any concrete acq plans, will have dilution of shares from 2nd half 2008 onwards (I think) - However, they are experiencing strong organic growth from the bouyant office space rental as well as retail sector.
DPU refer to distribution per unit? How is it calculated? How come got the concept of units like Unit Trust? Are REITs something like Unit Trust with the difference that they are traded on SGX only?
Thk Qs yah punter2006 for putting up those Reits Table, it hard work.