Mapletree Industrial Trust

http://www.remisiers.org/cms_images/Spor...062011.pdf - some info about this

preferential issue of 2 for 25 at $1.05 to $1.07 per share...
hopefully can get excess to round up to 1 lot

Quote:DPU Accretion for Existing Unitholders
The Acquisition Portfolio, coupled with the financing structure, is expected to result in
distribution per Unit (“DPU”) accretion to Unitholders. On an illustrative basis, based on the
planned financing structure, the financial effect of the acquisition on MIT’s projected
distributable income per Unit for the financial year from 1 April 2011 to 31 March 2012 as
provided in the IPO prospectus dated 12 October 2010 (the “IPO Prospectus”) (“Projection
Year 2011/2012”)
4
is expected to be an additional 0.07 cents per Unit assuming that:
ï‚· MIT had purchased, held and operated the properties in the Acquisition Portfolio since
the start of Projection Year 2011/2012, for the whole of Projection Year 2011/2012;
ï‚· the Manager elects to receive its base fee in respect of the Acquisition Portfolio in
Units, and to receive its performance fee in cash for the Projection Year 2011/2012;
and
ï‚· the average debt cost on the bank borrowings for the Acquisition Portfolio is
approximately 2.2% p.a.

there is hardly any accretion if the borrowing cost is higher than 2.2% p.a. but leverage up from 36 - 39

(27-07-2011, 11:59 PM)freedom Wrote: there is hardly any accretion if the borrowing cost is higher than 2.2% p.a. but leverage up from 36 - 39

I think the beauty of all these ex-JTC assets is its potential for rent escalation. So I expect the accretion to be higher eventually.

(Vested)

(28-07-2011, 12:18 PM)lonewolf Wrote:

(27-07-2011, 11:59 PM)freedom Wrote: there is hardly any accretion if the borrowing cost is higher than 2.2% p.a. but leverage up from 36 - 39

I think the beauty of all these ex-JTC assets is its potential for rent escalation. So I expect the accretion to be higher eventually.

(Vested)

but is market too optimistic about the prospects of MIT? The uncertainty still exists about potential rent escalation and asset re-development.

(28-07-2011, 12:46 PM)freedom Wrote: but is market too optimistic about the prospects of MIT? The uncertainty still exists about potential rent escalation and asset re-development.

This remains to be seen and depends on how the economy in general is doing. If we continue to plough along at 4-6% growth, I think we will be ok. But of cos if another crisis hit and we go into another round of negative growth, the the rent escalation will not take place. But when that happens, what is true for MIT, will also be true for other REITs and businesses.

My view is that cost of borrowings would be a pertinent factor in determining if they have excess cash flow to pay out to unit-holders. 2.2% is probably close to historic lows in terms of financing with banks, and we are talking about a medium-term tenure. Shorter tenures can command rates of about 1.7% to 2%, but you would need to roll-over more frequently.

So an important question is when is all this debt due? And also, how often do they have to roll-over?

Just my 2-cents.

MIT gearing will exceed 41% while its yield would edge upwards to 6.9%. I would say A-REIT offers more value at 6.3% yield and 29% gearing ? The latter has plenty of development opportunities and a longer track record. Development projects tend to be the best way to reward unit-holders since the cost on yield is higher and the gain in property valuation will give a timely boost to NAV and a reduction in gearing. Would value your views ! Please correct any mistakes in the figures.

(Not Vested in any industrial REIT)

A-REIT starting or started to invest oversea especially in China. MIT properties are now all in Singapore. When come to REITS , so far local properties are safer and may gives better return in the long run. i prefer local property REITS. Yesterday, closing price shot up to $1.20 after confirmation of rights issue. Time to take small profit or to hold & subscribe for rights issue





Vested in BOTH.

(29-07-2011, 07:03 AM)Temperament Wrote: A-REIT starting or started to invest oversea especially in China. MIT properties are now all in Singapore. When come to REITS , so far local properties are safer and may gives better return in the long run. i prefer local property REITS. Yesterday, closing price shot up to $1.20 after confirmation of rights issue. Time to take small profit or to hold & subscribe for rights issue





Vested in BOTH.

China investment represents a very small 3-4% of the total assets. Ultimately, no REIT listed ever faced an operating crisis - poor occupancy, acts of terrorism/war, lack of utilities etc. The closest would be Saizen REIT during the nuclear crisis. But we had a number of REITs who faced existential risk during the credit crunch when bankers were unwilling to roll over the loans of highly geared reits. The industrial reit sector was especially hard hit...Just take a look at the number of S-REITs compelled to turn to rights issue in late 2008/early 2009. In short, gearing is perhaps the most risky aspect of a REIT.