Sabana Shari'ah REIT

(12-06-2013, 11:03 PM)BlueKelah Wrote:

(23-05-2013, 02:55 PM)NTL Wrote:

(23-05-2013, 01:49 PM)cfa Wrote: Now we should know why the management unloaded their holdings. Drop 6% today.

They shouldn't have see it coming, do they?

NTL hope you managed to unload I have been saying REITs are overvalued all along

Wow now yield 8%++ as per today share price...

Tempted to buy some but STI is still not 10% correction yet I cant buy anything as per my asset allocation rules hehehe

No, I didn't unload. When it started falling, I sit up and think hard. On the reason I am holding REITs. The reason is for the yield. I will unload only if it does not give me the yield that I am looking for. As this fundamental still holds, so I still hold on. Whether this is the right decision or not, I will only know in the future. I am also waiting for further correction to utilise 50% of my spare money, keeping the rest for deep correction if any. Whether on REITs or Companies shares, it will depend on
how it turns out.

Most important thing is I have yet to lose sleep.

Why REITS all have different yields? We all know there are many reasons to consider. For me i think who is backing the REITS is quite important too. Because when there is a capital squeeze, then may be the weakest one will go first. So far so good in Singapore.

Sabana Shari'ah REIT has one of the highest yield and has been giving dividends consistently however selling has been quite intense.
The debt level is typical. Any particular reason ?

Some master leases may not be renewed, many industries are moving to Iskanda Malaysia. Armstrong disclosed in recent AGM that they are not renewing its tenancy agreement, because they are building their factory up North.

This must be one of the most unloved REIT!

When it got listed on 26-Nov-10 @ $1.05, despite a high Yield = 8.2% & low Gearing = 26.5%, it got sold down and never went back above IPO price till sometime in 2012.

I thought I was smart when I correctly predicted the sell down. My reasoning was simple - A weak sponsor (Freight Links) which only retained 5%+ (Kua family deemed interest slightly higher at 6%+). I wanted to get vested as I was greedy for the high yield and I waited patiently till it hit my target price and appeared stabilised.... I bought from $0.985 all the way down to $0.845 (almost 1 year later on Aug-11)...

Back then, I was quite active in CNA forum. ( I'd left Wallstraits forum due to the frequent quarrels and was left in the wilderness all alone... ). Sabana was one of the fav bashing REIT over there and was unkindly called 'Banana' by some. Besides myself, there were only a couple of other 'fools' who'd continue to post more objective stuff on this REIT..

What have gone up beside the price since IPO?

1. Gearing @ 37.7% vs 26.5%
2. Assets @ $1153M vs $884.6M (Acquisition + Revaluations)
3. Debts @ $432.8M vs $215.1M
4. DPU @ 2.41ct vs 2.18ct (Jun11 was 1st full Q ; Mar11 was for 4mths+)
5. Kua Family @ 10.68% vs 6.1% (mostly purchased during the days after IPO, possibly to help provide some price support).

To be frank, I have not done much analysis... I just went to tabulate the total dividends collected since IPO = 21.22ct (only the earliest ones). Till today, I have not sold any of my original holdings. I also don't know why... Perhaps complacency?? Or fallen in love with my stocks?? Somehow, even at 7%+ yield just before the recent price plunge, I still can't bear to sell any....

In ipo prospectus, the management stated the DPU will not remain 100% payout after 2 years.

I think sabana is very well managed and the yield of 8%+ now is very attractive

I can't imagine a better environment for REITs than now.

the interest rate is so low that it almost can't be lower.

the availability of money is so high, you can get it if you want it with local property assets backing.

so how favorable is the future going to be?

sabana even if they cant pay out 100%, 90% is the min and its decent too
their gearing is getting high so the 10% retained can be used to pay off debt or expand, both also decent I guess
the only fear is a rights issue

For industrial property , it is the tenant market, too many in the market .