Keppel DC Reit ( former K-Reit Asia )

Keppel DC Reit ( former K-Reit Asia )

Postby winston » Fri May 09, 2008 9:28 pm

Substantial shareholder Tan Swee Yiow has increased its interest in K-REIT Asia from 0.014% to 0.016%.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118528
Joined: Wed May 07, 2008 9:28 am

Re: K-Reit

Postby winston » Fri May 23, 2008 11:53 am

From UOB-Kay Hian:-

K-REIT Asia (BUY/S$1.45/Target: S$1.81)

• K-REIT achieved an average gross rent increase of 14% qoq to S$6.86psf pm in 1Q08 due to positive rental reversion from existing properties and full-quarter contribution from One Raffles Quay. It is well positioned to ride the upswing in office rentals with 24.2% of net lettable area (NLA) due for expiry and another 15.5% of NLA due for rent review in 2008 and 2009.

• K-REIT provides an attractive 2009 distribution yield of 6.05%. This assumes the balance of the bridging loan from Kephinance Investment is refinanced at a steep interest rate of 4.2%.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118528
Joined: Wed May 07, 2008 9:28 am

Re: K-Reit

Postby winston » Fri Jan 30, 2009 7:23 am

Copied from Suntec Reit thread.

====================================

by ichew on Fri Jan 30, 2009 1:13 am

hi winston

i tot kreit MAY be one tat fits the bill
i understd tat office rentals r affected and MBFC etc r adding much space
but kreit's current avg rental is $7.61 psf pm which is much lower than the reported high of $13-15 psf pm
of cos i will run if ubs, or other banks in ORQ close shop

but i wasnt too happy tat it ex-div more than their declared 5 cents dividend
i mean look at cct
such good support ex-div
also 5cents declared but drop 4cents only

so the lesson i learn here is again liquidity
still i'm holding on to my lots n looking fwd to their nxt div
prayin n hopin tat their full yr div will come up to 10cents
assumin i dont avg dwn, i breakeven in abt 7yrs

my own very crude estimate:
their total NLA = 1,231,692 sq ft
avg $7.61 psf pm
assumin worse case drop to $3.50 psf pm
=> gross rentals per yr of $51m
minus estmated ppty expenses of $13m
minus borrowing costs of 23.58m
minus mgr fees of $13m
plus net tax adjustments of 37.7m
gives 39m or abt 6cents div per sh

kreit has their own Gross Rent sensitivity forecast
can be found in several of their docs
range from plus minus 0.03cents to 0.06cents to their base case

in appendix A2-10 (pg 81 of 118) of the Rights Issue circular dtd 9 APRIL 2008,
they used 0.03cents
let's assume 5% changes in Gross rental will impact DPU by 0.04cents la
so $7.61 to $3.50 => a drop of abt 55%
so DPU will drop by 0.44cents
if DPU is 8cents, then DPU becomes 7.56cents
hmmm frankly it doesnt make sense so i must have got it wrong somewhere
i mean cannot be rentals drop 55% but DPU drop only 0.44cents only right?
anyone who knows pls let me know
issit becos of "Changes in the Gross Rent of uncommitted leases"?

btw pls note that i'm still very much learning abt investing
so take my words with a pinch of salt
i am merely sharing and hoping that more experienced forummers can help guide me
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118528
Joined: Wed May 07, 2008 9:28 am

Re: K-Reit

Postby winston » Fri Jan 30, 2009 7:49 am

Hi ichew,

I dont really follow K-Reit so dont have alot of notes on it:-
1) NAV 2.26; Take this numble with a big pinch of salt !
2) Temasek was buying; UBS was Selling; Please check SGX website for latest transactions

Target Price:-
1) DBS 0.8 Jan 20 from 0.93 Oct 21 from 1.61 Jul 29 from 1.69 from 3.7 Sep 24 from 2.45 Oct 13
2) UBS 1.49 Jan 29 Sell from 3.65 May 23
3) UOB 1.19 Jan21 Oct2 from 1.67 Jul29 from 1.69 from 1.46 Jun8 from 1.81 May23 from 1.96 Mar17
4) Lehmann 4 Dec 12 from 3.42 Dec 6
5) GS 2.1 May 6 from 3.29 Sep 25 from 3.6 Jul 31
6) Citi 2.17 Dec 13 from 2.87
7) Merrill Sell Recommendation Jan 15
8) MacQ 1.67 Jan 30

Take care,
Winston
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118528
Joined: Wed May 07, 2008 9:28 am

Re: K-Reit

Postby ichew » Fri Jan 30, 2009 10:31 am

thanks winston

btw i am awaiting for AR 08 for more info
but from pg 59/124 of AR07, we see

10% decrease in avg rental rates = rental income minus $ 813,900
1% decrease in occupancies = rental income minus $ 707,300

55% decrease in avg rental rates = rental income minus $4.476m
i am assuming this is gross rental

but assuming i minus this off from the FY08 distributable income of $58.182m, we still have abt 53m

the scary thing would be if occupancies drop to say 75%
a 25% decrease in occupancies = rental income minus $17.682m
assume again i use distributable income, we left with $35m
hmmm ...
User avatar
ichew
Foreman
 
Posts: 397
Joined: Thu Aug 28, 2008 11:11 pm

Re: K-Reit

Postby winston » Fri Jan 30, 2009 10:37 am

I think we should look at a multi year decrease in rental..
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118528
Joined: Wed May 07, 2008 9:28 am

Re: K-Reit

Postby ucypmas » Fri Jan 30, 2009 9:14 pm

The term "uncommitted leases" refers to the areas up for renewal, but for which the existing tenants have given not any commitment (in writing or otherwise) to K-REIT to renew their lease contracts.

If you read through the assumptions (page 74 of 118 of the same document you were referring to), the total area up for renewal is 14.1% of the total NLA. Out of that 44.3% have not been committed (i.e. uncommitted leases). Therefore the sensitivity of 0.03 is for the 14.1% x 44.3% = 6.25% of total area.

If you extend the analysis out and reduce the rent by 5% for all of the applicable area then the rental impact is 0.48cents per unit (0.03 / 6.25%), for 5% decline in overall rental rates. If rental rates falls by 55% then the total impact is 4.8cents => big time ki chia.

REITs are definitely in a down cycle (especially the office ones). However most new office supplies are coming on only in 2010, and current operators are cushioned by ongoing 3-year leases. You won't see renewals like >90% of the portfolio in just one year leading to large drops in income. Unless we are talking about mass corporate bankruptcies in Singapore leading to skyrocketing vacancies, I see distributions heading downwards, but steadily over the next five years instead of running off a cliff. A more immediate concern would the be the level of debt across the REITs. Eventually most of the REITs will have to call for rights issue to deleverage, as incomes decline and credit becomes tight. I think one should try to steer clear of REITs with high debt ratios, as well as large absolute debt amounts.
ucypmas
Coolie
 
Posts: 116
Joined: Sat Sep 06, 2008 4:50 pm

Re: K-Reit

Postby winston » Thu Oct 01, 2009 3:07 pm

Not vested. From Kim Eng:-

K-Reit Asia yesterday proposed a one-for-one rights issue to raise some $620 million in gross proceeds. The proposed issue price of 93 cents per unit is at a 21.2 per cent discount to yesterday's closing price of $1.18 per unit. The issue price is also an 11.8 per cent discount to the theoretical ex-rights price of $1.06 per unit.

Chief executive Ng Hsueh Ling of K-Reit Asia Management (the manager of K-Reit Asia) said that the proposed issue of about 666.7 million units at this price would 'provide significant funding headroom and put K-Reit Asia in a strong financial position to seize future acquisition opportunities'.

The manager intends to use 80.8 per cent of the gross proceeds to repay loans from Kephinance Investment. These include a bridging loan to be drawn down for the acquisition of six strata floors of Prudential Tower. Another 18.5 per cent of the proceeds will fund K-Reit Asia's 'potential acquisitions and asset enhancement initiatives', and for general corporate and working capital purposes. Estimated fees and expenses incurred for the rights issue are expected to take up the remaining 0.7 per cent.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118528
Joined: Wed May 07, 2008 9:28 am

Re: K-Reit

Postby ucypmas » Fri Oct 02, 2009 9:04 am

Chief executive Ng Hsueh Ling of K-Reit Asia Management (the manager of K-Reit Asia) said that the proposed issue of about 666.7 million units at this price would 'provide significant funding headroom and put K-Reit Asia in a strong financial position to seize future acquisition opportunities'.


Translation: We are taking advantage of the rise in equity markets to pump our shareholders for more money and raise cash so that we can do more empire-building, help our parent company unload their property at an inflated price to our REIT bagholders (or shareholders) and generate fees and big bonuses for ourselves.
ucypmas
Coolie
 
Posts: 116
Joined: Sat Sep 06, 2008 4:50 pm

Re: K-Reit

Postby winston » Fri Oct 02, 2009 12:48 pm

Not vested. From DBS:-

Our research analyst is surprise that K-Reit is proposing to raise S$620mil through a 1-for-1 rights issue at $0.93 each because their debt is maturing only around 2011 that is still some 18-20 months away. Proceeds will be used to repay debt and fund new acquisitions.

At the same time, K-Reit wrote down the value of its properties by 6.3%. Post rights, gearing will fall to 9.1% but DPU will be diluted by 36% to 6cts FY09 and 6.5cts FY10. We
see a lack of catalyst in the near-term as offices rents continue on a slow pace slide. Downgrade to HOLD with a target price of $1.01 (rights-adjusted $0.95).
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118528
Joined: Wed May 07, 2008 9:28 am

Next

Return to H to K

Who is online

Users browsing this forum: No registered users and 4 guests

cron