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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)
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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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?
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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.
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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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?
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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 ..
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> 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...