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26-11-2017, 10:25 AM
(This post was last modified: 26-11-2017, 10:43 AM by CY09.)
The announcement by Sabana actually hid one bad news and that was the renewal of its master leases. Renewal of the new leases is going to lead to a decrease of 1.3 mil in revenue.
Expect more downward valuation of its properties and distribution.
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Average remaining lease of ptf = 34yrs
Average remaining lease of 3 properties master-leased to sponsor = 30 (32yrs for 33+35 Penjuru, 21yrs for 18 Gul, 37yrs for 51 Penjuru)
One needs to be aware that roughly, valuation of properties ~ Rental / Cap Rate, and Cap Rate rises for decreasing leases.
A 12% drop in income for such properties nearing 30yrs will produce a much larger drop in valuations due to the dual effect of a lower numerator and a higher denominator.
Caveat Emptor - do your own math.
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27-11-2017, 11:54 AM
(This post was last modified: 27-11-2017, 11:56 AM by CY09.)
Hi AQ,
One thing I have learnt is how brilliant our Singapore valuers are in Maths. Over the years, we have seen how the capitalization and discount rates been tweaked by valuers to support the valuations of our local property value despite of events such as the hike in global interest rates.
As such, I have began to harp less on this issue as I find if regulators are not doing anything, my voice will not be effective. I believe Sabana REIT valuers are doing likewise.
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EXCERPTS FROM 联合早报
这（谈商终止）是缺乏能力的又一例子。在花费数以百万元资金请摩根士丹利为战略检讨的财务顾问之后，管理公司至今还未做出任何能让股东受益的东西。股东希望易商红木能够管理胜宝工业信托，因为他们已经对现有管理公司失去信心，现有管理团队过去几年已摧毁了信托的巨大价值。
金管局应该解释为何这个管理公司能够获准继续活动以及为何还更新其执照。管理公司旧班子的两个董事也还在任。
This is just another example of their incompetence. After spending millions of unitholders' money paying Morgan Stanley as the financial adviser in relation to the strategic review since 24 Feb 2017, the Manager has not come up with anything that can benefit the unitholders.
All unitholders were hoping for ESR (or anybody) to take over the REIT/ REIT Manager simply because we lost confidence with the present Manager and we do not believe they are able to improve the performance of the REIT. The present team has knowingly or stupidly create massive value destruction over the last few years. MAS should explain why this Manager is allowed to carry on its activities and why this Manager is granted a renewal of its license.
Two of the directors from the old team are still around.....
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