Analysing REITS

Hi All,

Have a question here regarding REITs managers renumeration.

When looking at Sabana's AR, there is a section on how much the directors are paid. And there is a management fees in the statement. So am wondering if the directors get paid from the management fees, or are they paid separately.

Thanks in advance for any replies.

(23-10-2013, 09:39 AM)NTL Wrote: Hi All,

Have a question here regarding REITs managers renumeration.

When looking at Sabana's AR, there is a section on how much the directors are paid. And there is a management fees in the statement. So am wondering if the directors get paid from the management fees, or are they paid separately.

Thanks in advance for any replies.

Some of them receive management fees in the form of units. E.g. Suntec

ARA will sell off the units they received as management fees. After that, do they use the money to pay for the directors? Or the directors' pay come from a separate (unitholders) pocket?

(23-10-2013, 09:39 AM)NTL Wrote: Hi All,

Have a question here regarding REITs managers renumeration.

When looking at Sabana's AR, there is a section on how much the directors are paid. And there is a management fees in the statement. So am wondering if the directors get paid from the management fees, or are they paid separately.

Thanks in advance for any replies.

The board of directors and management team are in an organisation that belongs to the reit manager. Hence the reit manager pays for these people out of it's management fees (which can be in dollars or in units). Their remuneration is not directly from the reit but indirectly from management fees paid by the reit to the reit manager.

Thanks for the reply. So in this case, what is the directors pay will not affect the reits payout then.

Need a little help here, hope somebody can enlighten me please! Thank you!

If a REITS have more than 100% payout ratio, does that mean that they are giving out dividends in excess such that they have to use their Free Cash which therefore being detrimental to the company (Cos they not earning any money) ?

Payout ratio = Dividends / Net Income

Take for example, I extracted out FCT latest report. Isn't FCT paying dividend in excess of what their net income is?

FY2013 Dividend Payout Ratio = 111%

FY2012 Dividend Payout Ratio = 111%

Correct me if I am wrong. So, how do they actually cope with it?

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i posted this on Cache REIT forum but got no replied...

just wondering, why the property price of all industrial REITs seem to be very cheap vis a vis the current market price?

for ex, the average value of warehouse space in industrial REITs is about SGD100-200 per sqft, whereas the current median market price stands at SGD400-500 per sqft (according to Colliers and Savills) and even >SGD 800 per sqft (according to URA)

thanks..

If warehouses have no individual strata titles then prices will be lower , unless they pay a fee and get it converted.
They have to sell the whole building, not unit by unit.

(26-11-2013, 12:29 AM)rickytj Wrote: i posted this on Cache REIT forum but got no replied...

just wondering, why the property price of all industrial REITs seem to be very cheap vis a vis the current market price?

for ex, the average value of warehouse space in industrial REITs is about SGD100-200 per sqft, whereas the current median market price stands at SGD400-500 per sqft (according to Colliers and Savills) and even >SGD 800 per sqft (according to URA)

thanks..

because leverage is involved and also you need to pay for the management fee?

(26-11-2013, 12:29 AM)rickytj Wrote: i posted this on Cache REIT forum but got no replied...

just wondering, why the property price of all industrial REITs seem to be very cheap vis a vis the current market price?

for ex, the average value of warehouse space in industrial REITs is about SGD100-200 per sqft, whereas the current median market price stands at SGD400-500 per sqft (according to Colliers and Savills) and even >SGD 800 per sqft (according to URA)

thanks..

I believe Industrial property is on short term lease. There maybe consideration on the depreciation side.