OUE (formerly: Overseas Union Enterprise)

$1.77B for two very old buildings sitting on leases fast expiring that WCY got rid off; only suckers will bite. 'Tricky tricky' said Lou Bega.

From reitsweek.com

Quote:Property firm Overseas Union Enterprise Limited (OUE) has fired its clearest signal yet that it will be moving ahead with the planned IPO of the OUE Hospitality REIT by lodging a prospectus with the MAS. The IPO will be offered between 88 Singapore cents and 90 Singapore cents.

At the indicative prices, the OUE Hospitality REIT is expected to raise up to S$1.18 billion, making it the third biggest IPO to hit the Singapore market this year.

OUE Limited is a property firm in the control of the Indonesian Riady family which also manages the Lippo group.

OUE REIT Preliminary Prospectus

looks not bad selling close to nav and has 7% yield
is this more attractive than the sph reit?

(10-07-2013, 09:36 PM)felixleong Wrote: looks not bad selling close to nav and has 7% yield
is this more attractive than the sph reit?

price $0.88-0.90
99 yrs lease from 1957=> 43 years remaining.
NAV ard 90c so depreciation p.a. is ard 2.1c p.a.

@ a fwd yield of 7%, this implies DPU of ard 6.3c
taking away the depreciation, the actual returns is only 4.2c per unit so 4.7% p.a.

so out of this 7% yield, 33% of it is actually just capital redemption.

"NAV ard 90c so depreciation p.a. is ard 2.1c p.a."

wahhh didnt know the depreciation is so much,omg

thanks a lot for highlighting this , I will probably pass this one

good luck to those who are press haha

(11-07-2013, 02:00 PM)AlphaQuant Wrote:

(10-07-2013, 09:36 PM)felixleong Wrote: looks not bad selling close to nav and has 7% yield
is this more attractive than the sph reit?

price $0.88-0.90
99 yrs lease from 1957=> 43 years remaining.
NAV ard 90c so depreciation p.a. is ard 2.1c p.a.

@ a fwd yield of 7%, this implies DPU of ard 6.3c
taking away the depreciation, the actual returns is only 4.2c per unit so 4.7% p.a.
You hit the nail on the head!
so out of this 7% yield, 33% of it is actually just capital redemption.

Should I be looking so remote far when investing in Reit? Most Reits have properties that are leasehold so this method should be applied to other existing Reits too but hardly see such an approach in analyst reports. Would asset under management growth, interest rates/cost of borrowing and rental revision more pertinent and pressing?

(14-07-2013, 08:30 PM)BeDisciplined Wrote: Should I be looking so remote far when investing in Reit? Most Reits have properties that are leasehold so this method should be applied to other existing Reits too but hardly see such an approach in analyst reports. Would asset under management growth, interest rates/cost of borrowing and rental revision more pertinent and pressing?

I believe it is a big concern as all(both) properties in the initial portfolio share the same short tenure and would form a big part of it's eventual portfolio even if they were to acquire the sponsor's ROFR properties. To make matters worse, two of its ROFR properties in China also have very short tenure, one 40+ years remaining and the other even less at 30+ years tenure.

(11-07-2013, 02:00 PM)AlphaQuant Wrote:

(10-07-2013, 09:36 PM)felixleong Wrote: looks not bad selling close to nav and has 7% yield
is this more attractive than the sph reit?

price $0.88-0.90
99 yrs lease from 1957=> 43 years remaining.
NAV ard 90c so depreciation p.a. is ard 2.1c p.a.

@ a fwd yield of 7%, this implies DPU of ard 6.3c
taking away the depreciation, the actual returns is only 4.2c per unit so 4.7% p.a.

so out of this 7% yield, 33% of it is actually just capital redemption.

I like it when someone talks about depreciation, it is very important and relevant when referring to many of these leasehold properties.

Another reason why i avoid reits these days is because many of them are quite leveraged, i dont want to imagine what will happen when interest rates go up, i dont want to be sucked into a cash call, that's pretty dumb when you are certain that interest rates will 100% go up in the next 5 years

Haha that aside, i made $224 for selling my SPHreits this morning

Not vested in any reits anymore

COngrats to OUE for selling REITs to suckers. OUE shareholders can expect a bumper special dividend. Riady likely to dig money out from OUE by way of dividends as his holding company Fortune Code is quite leveraged.