ARA Asset Management

[pianist]

How to buy its closed end fund?

[Boon]

ARA has been ranked No: 33 by PERE among private equity real estate GPs

http://www.perenews.com/resources/PERE%2...PERE50.pdf

(vested)

[gutman]

ARA is one of Macquarie's recent mid-cap top picks. Macquarie has a target price of $2.12.

[Nick]

1) Fortune REIT has issued a trading halt. If this relates to M&A, it will be earning accretive to ARA this year in the form of recurring management (base and property) and one off acquisition fees.

2) Some details on their Australia venture:

Initial public offerings of Australian property trusts are back in vogue, with two management teams currently meeting institutional investors in Asia ahead of planned September listings.

Pacific Retail REIT, which will own five shopping malls, is seeking up to 395 million Australian dollars (US$363 million) at A$1.00 a share in a deal underwritten by Moelis & Co., according to an investor presentation seen by MoneyBeat.

At least A$28 million of that total will come from Singapore-based ARA Asset Management and its associates. ARA is an affiliate of Hong Kong-based Cheung Kong Group, which specializes in taking stakes in listed and unlisted real estate trusts.

The company is offering an earnings yield of around 8.5%–almost double the returns most individuals can fetch by parking their cash in term deposits with Australia’s major lenders.

Proceeds from the IPO will help Pacific Retail REIT pay for four of its five shopping centers, which it has agreed to acquire from CFS Retail Property Trust Ltd.CFX.AU 0.00% for A$446.5 million.

Source: http://blogs.wsj.com/moneybeat/2013/07/2...-ipo-buzz/

3) Klang Parade, a mall purchased by ADF in 2012 has undergone refurbishment.

Source: http://www.thesundaily.my/news/783839

(Vested)

[gutman]

Detail for Fortune Reit's trading halt is out.
http://infopub.sgx.com/Apps?A=COW_Corpor...y&F=884303

Proposed acquisition of mall from Cheung Kong at HK 5,849 mil.

Correct me if I am wrong. Just a quick calculation, should this be approved, ARA stands to make a 1% acquisition fee amounting to HK 58.49 mil or approx. SGD 9.5 mil.

[pianist]

Wow what kinda mall is that cost almost one billion singdollars.

[Nick]

Acquisition Price: HK$5,849 million
Annualized 1H 2013 NPI: HK$220.8 million

As the Manager of Fortune REIT, assuming the transaction is completed, ARA will stand to gain HK$58.49 million one off acquisition fees which works out to S$9.5 million. Moreover, it earns 0.3% of AUM as base fees and 3% of NPI as performance fees so this works out to HK$24 million recurring income (S$3.9 million) on an annualized basis.

(Vested)

[swakoo]

Net property income yield based on respective acquisition prices:

Fortune reit
Kingswood Ginza: 3.8%
Tenure: could not find in the document but think HK malls typically 30-40 years leasehold

SPH reit
Paragon: 4.8%
Tenure: 99 years leasehold

Clementi mall: 5.4% (with income support), 4.6% (without income support)
Tenure: 96 years leasehold

Other S'pore mall reits
Valuation capitalisation rates: typically 5-5.75%

SPH should have listed it's reit in the HKSE

[Contrarian]

Acquisition Price: HK$5,849 million
Annualized 1H 2013 NPI: HK$220.8 million

As the Manager of Fortune REIT, assuming the transaction is completed, ARA will stand to gain HK$58.49 million one off acquisition fees which works out to S$9.5 million. Moreover, it earns 0.3% of AUM as base fees and 3% of NPI as performance fees so this works out to HK$24 million recurring income (S$3.9 million) on an annualized basis.

(Vested)

Maybe higher with asset enhancement and revision of rentals. Dunno condition and profile of tenants in this mall.

---

Alpha Investment Partners on number 30, is part of Keppel Land.

Hopefully another rating of REIT managers including public listed REITs and private funds.

ARA has been ranked No: 33 by PERE among private equity real estate GPs

http://www.perenews.com/resources/PERE%2...PERE50.pdf

(vested)

[freedom]

Net property income yield based on respective acquisition prices:

Fortune reit
Kingswood Ginza: 3.8%
Tenure: could not find in the document but think HK malls typically 30-40 years leasehold

SPH reit
Paragon: 4.8%
Tenure: 99 years leasehold

Clementi mall: 5.4% (with income support), 4.6% (without income support)
Tenure: 96 years leasehold

Other S'pore mall reits
Valuation capitalisation rates: typically 5-5.75%

SPH should have listed it's reit in the HKSE

if I am not wrong, Hong Kong properties normally have provision for lease til 2049, the year "One China, two systems" ceases to effect.