Ascendas Reit

[swakoo]

I managed to get a figure that's close if I used the no. of units from Q3 results (includes units to be issued for mgmt fee, if any),

ie. 2,239,184,937 units (didn't double check, taken from my ss)

If we divide Performance Fee = $6,959,000 by the above => 0.3108ct/unit

Thanks - impressive that you have so much data in your ss for someone who is not vested in this counter.
Neither am I, so time to rest our brain cells.

[specuvestor]

This discussion is most valid for a REIT investor than most people realise: How the pie is being divided between the manager and the investor, remembering the investors have to pay for future cash calls for capex... The manager doesn't cut their fees.

We balked at 20% capital gains tax yet ok on exorbitant management fees or 20% profit share. There is psychological irrationality at work.

[swakoo]

We balked at 20% capital gains tax yet ok on exorbitant management fees or 20% profit share. There is psychological irrationality at work.

Capital gains tax goes to a 3rd party who does NOT directly contribute to getting the gains.

Profit share goes to a party who IS directly responsible for the profit, and CAN further increase the profit if motivated with the adequate profit share.

[KopiKat]

It'd appear that one of the possible weakness of this Performance Fee incentive structure (a similar form of which is also employed by a couple of other REITs), is that although the Performance Fee is 'fairly' based on an improvement in DPU, the quantum of the Performance Fee is independent of the DPU improvement achieved ie. based on 0.1% of Deposited Properties. For a lay person like me (not financially trained to solve the differing DPU base conudrum), it does appear to be 'unfair' that the REIT Mgr is getting a bigger slice of the pie of the increase in DPU. I supposed in the worst case, it may be even possible that Performance Fee (in terms of DPU, rather than absolute) becomes greater than the increase in DPU? Especially when AUM (or deposited property) becomes a much larger figure?

IMO, another thing that seems 'not so fair' is that there's no mention (maybe I missed that while scanning thro' their IPO prospectus) of any 'high watermark' clause ie. DPU need to be better than a previous high, not just y-o-y to trigger any Performance Fee.

[specuvestor]

We balked at 20% capital gains tax yet ok on exorbitant management fees or 20% profit share. There is psychological irrationality at work.

Capital gains tax goes to a 3rd party who does NOT directly contribute to getting the gains.

Profit share goes to a party who IS directly responsible for the profit, and CAN further increase the profit if motivated with the adequate profit share.

Ya but the 3rd party provides the infrastructure and environment

You are right in that it creates motivation. Motivated enough to increase the DPU just above the performance fee payout, if KopiKat is right. But short term self-interest will destroy long term shareholders' interest if the DPU increase deteriorates the financial strength of the REIT, as the 09 crisis has shown us. That is why having a cap on leverage makes a lot of sense, and IMHO should also be implemented in business trusts, else the incentive is to increase DPU at expense of capital structure or future capex needs. We need to prevent self-interest from imploding the company and marginalising the majority.

I share KopiKat's concern, not just for AREIT but listed trusts in general. Cashcalls have to be fulfilled by shareholders while management just hold tight to their piggy bank. The split in distributable income does not make sense risk-adjusted.

[swakoo]

Ya but the 3rd party provides the infrastructure and environment

Notice I said "NOT directly"?

You are right in that it creates motivation. Motivated enough to increase the DPU just above the performance fee payout, if KopiKat is right. But short term self-interest will destroy long term shareholders' interest if the DPU increase deteriorates the financial strength of the REIT, as the 09 crisis has shown us. That is why having a cap on leverage makes a lot of sense, and IMHO should also be implemented in business trusts, else the incentive is to increase DPU at expense of capital structure or future capex needs. We need to prevent self-interest from imploding the company and marginalising the majority.

Notice I said "CAN" not "WILL"?

[KopiKat]

First time see BlackRock as a substantial shareholder (for any SREIT),

274,000 units @ S$596,661.58 => $2.1776 on 30-Aug
From 4.99% to 5%

http://infopub.sgx.com/FileOpen/Ascendas...eID=255029


Just the other day, saw their adverts for their funds. Their factsheets,

http://www.blackrock.com.sg/IndividualIn.../index.htm

Must be increasing their presence in this part of the world?

[NTL]

I only buy one of their fund,

This one.

http://www.blackrock.com.sg/content/grou...095893.pdf

[mkmk]

http://infopub.sgx.com/Apps?A=COW_Corpor...l6oqtJQLVg

http://infopub.sgx.com/Apps?A=COW_Corpor...l6pINJQLVg

http://infopub.sgx.com/Apps?A=COW_Corpor...l6pLdJQLVg

Q2 Results Highlights
1. 2Q FY13/14 amount available for distribution increased by 9.3% y-o-y to S$86.4 million
2. Distribution per Unit (“DPU”) grew by 2.0% y-o-y, from 3.53 cents per Unit in 2Q FY12/13 to 3.60 cents per Unit in 2Q FY13/14
3. Achieved positive rental reversion, averaging 10.8%, across all segments of the portfolio
4. Completed acquisition of A-REIT City@Jinqiao in July 2013, with 25.3% of leasable space pre-committed and completed development of Nexus@one-north in September 2013, with 73.9% of leasable space pre-committed
5. Strong balance sheet with aggregate leverage at 29.7%

http://infopub.sgx.com/Apps?A=COW_Corpor...l6pN9JQLVg

What does this annoucement mean?

(not vested)

[CityFarmer]

For those vested and interested.

(not vested)

Higher rents, acquisitions boost A-REIT’s income

SINGAPORE — Ascendas Real Estate Investment Trust (A-REIT) yesterday reported that its fiscal fourth-quarter distributable income surged 21.9 per cent as it enjoyed higher rents and recognised rental takings from The Galen in Science Park, Nexus @one-north and A-REIT City@Jinqiao in Shanghai.

For the three months ended March 31, A-REIT’s distributable income totalled S$83.9 million, up from S$68.8 million in the corresponding period a year earlier.

Distribution per unit (DPU) rose 16 per cent to 3.55 cents. Net property income for the period increased 12.2 per cent to S$112.3 million as gross revenue rose 7.7 per cent to S$156.5 million.

For the full fiscal year, DPU rose 3.6 per cent to 14.24 cents as the amount available for distribution increased 11.9 per cent to S$342 million. Net property income and gross revenue both grew 6.6 per cent to S$436 million and S$613.6 million, respectively.

The trust manager said: “In 2014, while the supply of industrial space in Singapore is expected to increase, the demand outlook for business and industrial space is likely to remain healthy on the back of a tentative global recovery.”

Mr Tan Ser Ping, chief executive of the trust manager, said: “A-REIT’s portfolio achieved positive rental reversion averaging 14.8 per cent for leases renewed in FY13/14 … We expect the trend to continue in FY14/15, albeit at a more modest rate.”
http://www.todayonline.com/business/high...its-income