Saizen REIT

[Nick]

ACQUISITION OF FLOUR MANSION JYOSEI

http://info.sgx.com/webcoranncatth.nsf/V...700331E5B/$file/20111215_Announcement_Acquisition_of_Flour_Mansion_Jyosei.pdf?openelement [SGX Announcement]

This must be its first acquisition after a very long time. This is one of the rare REITs which repays its debt and owns freehold asset in a first world country and yet boast a dividend yield of 7%. But natural disasters is a risk which prospective investors should take into consideration. Always good to see a company recovering from its troubles in the past.

(Not Vested)

[touzi]

The 2 tables in the announcement show that the NAV and EPU drop after the acquisition. Why do they want to acquire the property if that is the case?

[Nick]

I think the EPU (or more accurately Loss Per Unit) rose from - 1.18 cents to - 1.14 cents. DPU should be accretive since no equity was raised.

[touzi]

Ah...yes, got it. ....Thanks.

[tanjm]

I recently took a relook at this counter.

It appears to have a fully diluted (all warrants exercised) operational cashflow (before debt principal repayment) of 2 cents per share, a gross property yield (i.e. not counting expenses) of about 10%, freehold properties all over the country, and a decent debt maturity profile (it appears to have fully exchanged its legacy CMBS debt for somewhat longer term debt). A fully diluted NAV/sh of 29 cents.

From a macro view, while it is unlikely to be a high growth counter (though it claims to be looking at a new acquisition), it does have what looks like a highly stable income profile on its existing properties. While Japan has its problems, rental housing is as basic as food for Japanese consumers. The main issue might come from the JPY exchange rate but it would take a pretty major economic event to make it go down significantly.

looks decent so far. Its price is currently 14+ cents per share. Discount to NAV is large. What have I missed?

[Zelphon]

Well..

I have been holding it for the past 3 yrs ..
Seen its' dark days till turn-around..

I am still holding it..
The warrants will expire in Jun 2012..

At the moment, it is sitting on a huge cash hoard.. I suppose..
Present yield is around 8% but will be diluted with the warrants conversion ..

Long-term wise..
I think it has potential to turn-around ..

[Contrarian]

> looks decent so far. Its price is currently 14+ cents per share. Discount to NAV is large. What have I missed?

1. There is little rental upside
2. The banks lends at most 50% of collateral
3. There is little chance of revaluation upwards
4. Liquidity is a concern

So for all these, I cashed out in August last year. Used it to buy something better... Till today, I can come back, still same price...

But then, there are better choices REITs...

[KopiKat]

> looks decent so far. Its price is currently 14+ cents per share. Discount to NAV is large. What have I missed?

1. There is little rental upside
2. The banks lends at most 50% of collateral
3. There is little chance of revaluation upwards
4. Liquidity is a concern

So for all these, I cashed out in August last year. Used it to buy something better... Till today, I can come back, still same price...

But then, there are better choices REITs...

I went to extract End-Aug11 Share Price data to compare with yesterday's close and got this table,

[wrap]
[table=REIT]
Cambridge
FrasersCT
Sabana REIT
Fortune Reit HK$
CLT
MCT
AIMSAMPIReit
CapitaRChina
First REIT
MapletreeLog
MIT
FCOT
CapitaComm
StarHill
Ascendasreit
AscottREIT
CDL Htrust
CapitaMall
SaizenREIT
PLife REIT
SuntecReit
K-REIT
LippoMapleT
[/table]
[table=27-Feb-12]
$0.515
$1.505
$0.935
$3.910
$0.995
$0.865
$1.055
$1.250
$0.800
$0.900
$1.170
$0.830
$1.180
$0.605
$2.010
$1.055
$1.710
$1.760
$0.141
$1.770
$1.215
$0.920
$0.395
[/table]
[table=E/Aug-11]
$0.480
$1.430
$0.900
$3.780
$0.965
$0.840
$0.205
$1.220
$0.785
$0.890
$1.180
$0.840
$1.195
$0.620
$2.120
$1.115
$1.815
$1.870
$0.150
$1.885
$1.350
$1.155
$0.585
[/table]
[table=% Change]
7.3%
5.2%
3.9%
3.4%
3.1%
3.0%
2.9%
2.5%
1.9%
1.1%
-0.8%
-1.2%
-1.3%
-2.4%
-5.2%
-5.4%
-5.8%
-5.9%
-6.0%
-6.1%
-10.0%
-20.3%
-32.5%
[/table]
[table=DPU Yield]
8.6%
5.8%
9.2%
6.9%
8.4%
6.6%
9.9%
7.1%
8.8%
7.5%
7.4%
7.2%
6.4%
6.6%
6.9%
7.7%
6.7%
5.1%
8.7%
5.6%
8.2%
7.3%
8.3%
[/table] [/wrap]

Note that share prices had not been adjusted for any rights issue (but adjusted for share consolidation for AIMS). A fairer comparison would be to add in the DPU paid out (too lazy to extract the figures as very tedious). For eg. Saizen 0.5ct + 0.61ct vs the lowest Yielding REIT, CMT (2.36ct + 2.42ct + 2.3ct) and you may see Saizen moving up the performance table.

[Sampling]

Thank you kopikat. This was very helpful

However it should be 27 Feb 2012?

> looks decent so far. Its price is currently 14+ cents per share. Discount to NAV is large. What have I missed?

1. There is little rental upside
2. The banks lends at most 50% of collateral
3. There is little chance of revaluation upwards
4. Liquidity is a concern

So for all these, I cashed out in August last year. Used it to buy something better... Till today, I can come back, still same price...

But then, there are better choices REITs...

I went to extract End-Aug11 Share Price data to compare with yesterday's close and got this table,

[wrap]
[table=REIT]
Cambridge
FrasersCT
Sabana REIT
Fortune Reit HK$
CLT
MCT
AIMSAMPIReit
CapitaRChina
First REIT
MapletreeLog
MIT
FCOT
CapitaComm
StarHill
Ascendasreit
AscottREIT
CDL Htrust
CapitaMall
SaizenREIT
PLife REIT
SuntecReit
K-REIT
LippoMapleT
[/table]
[table=27-Feb-11]
$0.515
$1.505
$0.935
$3.910
$0.995
$0.865
$1.055
$1.250
$0.800
$0.900
$1.170
$0.830
$1.180
$0.605
$2.010
$1.055
$1.710
$1.760
$0.141
$1.770
$1.215
$0.920
$0.395
[/table]
[table=E/Aug-11]
$0.480
$1.430
$0.900
$3.780
$0.965
$0.840
$0.205
$1.220
$0.785
$0.890
$1.180
$0.840
$1.195
$0.620
$2.120
$1.115
$1.815
$1.870
$0.150
$1.885
$1.350
$1.155
$0.585
[/table]
[table=% Change]
7.3%
5.2%
3.9%
3.4%
3.1%
3.0%
2.9%
2.5%
1.9%
1.1%
-0.8%
-1.2%
-1.3%
-2.4%
-5.2%
-5.4%
-5.8%
-5.9%
-6.0%
-6.1%
-10.0%
-20.3%
-32.5%
[/table] [/wrap]

Note that share prices had not been adjusted for any rights issue (but adjusted for share consolidation for AIMS). A fairer comparison would be to add in the DPU paid out (too lazy to extract the figures as very tedious). For eg. Saizen 0.5ct + 0.61ct vs the lowest Yielding REIT, CMT (2.36ct + 2.42ct + 2.3ct) and you may see Saizen moving up the performance table.

[KopiKat]

However it should be 27 Feb 2012?

Ooops.. Corrected. Also added in the DPU Yield based on yesterday's closing price. Hope no more mistake as didn't do a thorough check ie. Just copy the figures from that blog, put into my excel ss and sort. Rushing to beat the 9am SGX opening.

---

I added the % Price Change & the Dividend Yield and re-sorted the table (Saizen ranks higher than CMT as I suspected in the earlier post). Although the above 2 uses different base price, I have checked on my ss that the ranking remains the same even if I were to use the same base price ie. Aug-11 price. So, it can still serve as a quick guide on the performance since Aug-11. Still, didn't do any adjustment for rights issues eg. KREIT, LMIR

[wrap]
[table=REIT]
Cambridge
Sabana REIT
AIMSAMPIReit
CLT
FrasersCT
First REIT
Fortune Reit HK$
MCT
CapitaRChina
MapletreeLog
MIT
FCOT
CapitaComm
StarHill
SaizenREIT
AscottREIT
Ascendasreit
CDL Htrust
PLife REIT
CapitaMall
SuntecReit
K-REIT
LippoMapleT
[/table]
[table=27-Feb-12]
$0.515
$0.935
$1.055
$0.995
$1.505
$0.800
$3.910
$0.865
$1.250
$0.900
$1.170
$0.830
$1.180
$0.605
$0.141
$1.055
$2.010
$1.710
$1.770
$1.760
$1.215
$0.920
$0.395
[/table]
[table=E/Aug-11]
$0.480
$0.900
$0.205
$0.965
$1.430
$0.785
$3.780
$0.840
$1.220
$0.890
$1.180
$0.840
$1.195
$0.620
$0.150
$1.115
$2.120
$1.815
$1.885
$1.870
$1.350
$1.155
$0.585
[/table]
[table=% Change]
7.3%
3.9%
2.9%
3.1%
5.2%
1.9%
3.4%
3.0%
2.5%
1.1%
-0.8%
-1.2%
-1.3%
-2.4%
-6.0%
-5.4%
-5.2%
-5.8%
-6.1%
-5.9%
-10.0%
-20.3%
-32.5%
[/table]
[table=DPU Yield]
8.6%
9.2%
9.9%
8.4%
5.8%
8.8%
6.9%
6.6%
7.1%
7.5%
7.4%
7.2%
6.4%
6.6%
8.7%
7.7%
6.9%
6.7%
5.6%
5.1%
8.2%
7.3%
8.3%
[/table]
[table=% Change + DPU Yield]
15.9%
13.1%
12.8%
11.5%
11.1%
10.7%
10.3%
9.5%
9.5%
8.6%
6.5%
6.1%
5.1%
4.2%
2.7%
2.3%
1.7%
0.9%
-0.5%
-0.8%
-1.8%
-13.0%
-24.2%
[/table] [/wrap]