Lippo Malls REIT (LMIR)

[Share Investor]

Isnt it unfair that the reit manager charge a 1% fee for acquisition when it doesnt really benefit shareholders?

Furthermore, gearing has gone up. I held on to the units last time because of the low gearing with the hope that the DPU will rise as more acquisition are done with debt. But ever since the DPU neutral acquisitions a couple weeks back, I have given up hope and sold all my units.

[money]

Isnt it unfair that the reit manager charge a 1% fee for acquisition when it doesnt really benefit shareholders?

Furthermore, gearing has gone up. I held on to the units last time because of the low gearing with the hope that the DPU will rise as more acquisition are done with debt. But ever since the DPU neutral acquisitions a couple weeks back, I have given up hope and sold all my units.

i would probably do the same if i own the shares, surprisingly, the market hasnt reacted much

[Greenrookie]

I have also divested. However, I am very puzzled how it is possible that malls that are already in operation to not contribute to increase in income? How can the operating costs equal to or is higher than the rents collected? Is indeed that is the case, why still make that aquisition?

[Nick]

I have also divested. However, I am very puzzled how it is possible that malls that are already in operation to not contribute to increase in income? How can the operating costs equal to or is higher than the rents collected? Is indeed that is the case, why still make that aquisition?

LMIR recently issued $200 million Notes due in 2015 with 4.88% interest and $50 million Notes due in 2017 with 5.875% interest. Since the acquisitions was funded with debt, my guess is the NPI yield didn't exceed the interest rate expense.

[Greenrookie]

I have also divested. However, I am very puzzled how it is possible that malls that are already in operation to not contribute to increase in income? How can the operating costs equal to or is higher than the rents collected? Is indeed that is the case, why still make that aquisition?

LMIR recently issued $200 million Notes due in 2015 with 4.88% interest and $50 million Notes due in 2017 with 5.875% interest. Since the acquisitions was funded with debt, my guess is the NPI yield didn't exceed the interest rate expense.

Hmm.. But I thought all aquisitions by reits is mostly financed by debts? Anyway the sum doesn't add up.
The expected NPI is about 110 million, after taking account interest payment and operating costs, where did the money go to ??

[money]

I have also divested. However, I am very puzzled how it is possible that malls that are already in operation to not contribute to increase in income? How can the operating costs equal to or is higher than the rents collected? Is indeed that is the case, why still make that aquisition?

well i dont have a direct answer to that. What i do know is you can expect management to do something stupid from time to time.. take a look at first ship lease trust, marcarthurcook properties securites fund, rickmers, omega navigations, management took on leverage, shareholders appear happy for a while cos more dividends enter their pockets but the dividends are not always sustainable...

even macquarie international infrastructure fund doesnt look like it can sustain its dividend if it were to make bullet loan repayments by its underlying business in years to come... of course many forumners disagree with... well only time will tell

[KopiKat]

PROPOSED ACQUISITIONS

Proforma Impact : Slight Drop in DPU, No Change in NAV (Properties at Discount to Valuations), Increased Gearing


<Not Vested>

Looks like it does add to DPU after all (after a 2-3 Qs). DPU increased to 0.89ct vs 0.74ct for last Q (Dec12) & 0.79ct for Q212 (Jun), the Q before the acquisitions. Yield ~6.5% @ $0.545 (current last done price) ; Gearing 24.3% ; NAV = $0.5654. Main risks are Exchange Rate & Political as all assets are in Indonesia.

Press Release

<Vested - since this AM>

[Temperament]

PROPOSED ACQUISITIONS

Proforma Impact : Slight Drop in DPU, No Change in NAV (Properties at Discount to Valuations), Increased Gearing


<Not Vested>

Looks like it does add to DPU after all (after a 2-3 Qs). DPU increased to 0.89ct vs 0.74ct for last Q (Dec12) & 0.79ct for Q212 (Jun), the Q before the acquisitions. Yield ~6.5% @ $0.545 (current last done price) ; Gearing 24.3% ; NAV = $0.5654. Main risks are Exchange Rate & Political as all assets are in Indonesia.

Press Release

<Vested - since this AM>

i have been selling my Lippomall slowly.
In fact, i have managed to sell all at 11:16:30.
May fortune continue to smile on those who buy today.
And i may buy back some of the Reits earlier for dividend play.
Lippo is my last Reits counter.

[KopiKat]

PROPOSED ACQUISITIONS

Proforma Impact : Slight Drop in DPU, No Change in NAV (Properties at Discount to Valuations), Increased Gearing


<Not Vested>

Looks like it does add to DPU after all (after a 2-3 Qs). DPU increased to 0.89ct vs 0.74ct for last Q (Dec12) & 0.79ct for Q212 (Jun), the Q before the acquisitions. Yield ~6.5% @ $0.545 (current last done price) ; Gearing 24.3% ; NAV = $0.5654. Main risks are Exchange Rate & Political as all assets are in Indonesia.

Press Release

<Vested - since this AM>

Yesterday was a pleasant surprise. It went xd but Share Price closed unchanged @ $0.555 (DPU was 0.89ct). Vol = 9,281,000 ; Range = $0.545 to $0.555 ; Open = $0.545

I must admit that I was rather surprised the other day, when I went to grab some first thing in the AM (after quickly going thro' the Q1 results announced the night before and seeing the jump in DPU). Hey! there'd been a 20% jump in DPU q-o-q (even higher if y-o-y but not a suitable comparison as different asset base). How come no one seems to be sharing my enthusiasm? Perhaps everyone is wary of the headline news that Indonesia GDP growth is slowing down? 6.11% (Q412) drop to 6.02% (Q113) vs median estimate 6.1% seems like a big concern?? I don't know... me no economist... but looks a lot better than Singapore to me... Perhaps something else? Someone told me the increase in DPU is likely due to the strong Rupiah. I was thinking I better go stare at the financials more in detail...

Today, when I looked at my watch list again at aro' 3pm, I was again pleasantly surprised to see LMIR trading at $0.565 / $0.57. Volume has already surpassed yesterday's. This time round, I wonder why it'd gone up (also thinking whether to take profit..)... Perhaps some analysts issued a positive report?? Let's hope it was the 'Voting Machine' at work the other day and now, finally, the 'Weighing Machine' is asserting itself... I certainly hope it's not vice versa....

PS. Had been busy (too many quarterly financials to quick read at night) and have not gone back to check the financials... Oops.. Getting lazy.....

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Closed @ $0.58 +2.5ct
Range = $0.55 to $0.58
Vol = 15,440,000
Open @ $0.55

[swakoo]

I must admit that I was rather surprised the other day, when I went to grab some first thing in the AM (after quickly going thro' the Q1 results announced the night before and seeing the jump in DPU). Hey! there'd been a 20% jump in DPU q-o-q (even higher if y-o-y but not a suitable comparison as different asset base). How come no one seems to be sharing my enthusiasm? Perhaps everyone is wary of the headline news that Indonesia GDP growth is slowing down?

blah blah blah

Today, when I looked at my watch list again at aro' 3pm, I was again pleasantly surprised to see LMIR trading at $0.565 / $0.57. Volume has already surpassed yesterday's. This time round, I wonder why it'd gone up (also thinking whether to take profit..)... Perhaps some analysts issued a positive report??

My observation is that especially for the less liquid reits, there is a somewhat lagged reaction to the quarterly results of up to a few days, for whatever reasons. So it is true that luck and fortune favours those who are "fast leg fast hand" when opportunity knocks.

Incidentally, take a look at the chart of mall reits:

[Image: z?s=%5eSTI&t=5y&q=l&l=off&z=l&c=J69U.SI,...&region=US]

Notice that Lippomalls (purple line) was initially tracking the STI (blue line) until it did a massive dilutive rights end 2011 whereupon it started to underperform the STI, joining the company of the other 2 mall reits which also did massive dilutive rights (in 2009) - CMT and Starhill Global (yellow and orange lines respectively). Note: this observation is not necessarily a prediction of the future.