Soilbuild Business Space REIT

[Drizzt]

perhaps its the recent yield movement that is unsettling it. the TLT have been weak.

[felixleong]

yeah TLT yields has being spiking up
currently at 2.87%, wonder how industrial reits will be priced if yields hit 3-5%?

[orangetea]

Those who bought contras on 16 Aug 13 will be squeezed when the price drop further on T+3. Maybe that's where the meat will come from?
Subana yield is within sight, I guess.

I wouldn't consider it even when yields hit 10% simply because of weak sponsor.

[Greenrookie]

perhaps its the recent yield movement that is unsettling it. the TLT have been weak.

If it is due to the yield movement, it should be across the board fall, like the uniform fall in Reits when tapering is announced. Sabana and Cambridge ( closer comparables) both rise on Friday. It should be soilbuild related issues than macro factors in play

[wsreader]

Orangetea
Agreed that the strength of the sponsor is an important consideration for a value investor.

I was commenting on KopiKat's post.For shortists at the average price of $0.739, there maybe enough profit for them to be buyers at around sabana's yield (ref: post #35 for the yield table).
If the price drops further next week, friday's contra buyers may be providing the sell orders for these shortists to close their positions.

I will give some time for this reit to seek its equilibrium price level. Meanwhile, as other buddies had pointed out, the movement of long term bond yield is a concern for yield seekers.

[Drizzt]

perhaps its the recent yield movement that is unsettling it. the TLT have been weak.

If it is due to the yield movement, it should be across the board fall, like the uniform fall in Reits when tapering is announced. Sabana and Cambridge ( closer comparables) both rise on Friday. It should be soilbuild related issues than macro factors in play

they did fall badly the two days before.

[Temperament]

The price stabilisating action of usually maximum 30 days from IPO debut is allowed. What will happens if less then 30 days, all the price stabilisating money is used up? Can it happens?

[freedom]

Til today, I still can't understand the weak sponsor argument. See where Sabana is trading now. I think freightlink is not any better than soilbuild.

[lonewolf]

The price stabilisating action of usually maximum 30 days from IPO debut is allowed. What will happens if less then 30 days, all the price stabilisating money is used up? Can it happens?

Yes of cos it can and has happened. When the stabilising units had been used up, then stabilising action will cease.

APPT was the last example when on the 17th trading up, all stabilising units were used up.

SB REIT may set a new record for the fastest that the stabising manager has used up its stabilsing units.

[KopiKat]

Til today, I still can't understand the weak sponsor argument. See where Sabana is trading now. I think freightlink is not any better than soilbuild.

See what happened to the Aussie cowboys ones (MI-REIT, Allco, MMP) during the '08 crisis? While most of the other REITs start to recover in the '09 rebound, these remained battered for a longer period and their stake + mgmt co. were finally sold to others, who'd to come in to clean up the mess...

In the case of Sabana, Freight Links, despite a rather weak Balance Sheet back then, was able to survive their own crisis (not '08 one as Sabana was listed only on Nov-10). I guess the proceeds from selling their Industrial assets to the REIT helped in a large way to strengthen their Balance Sheet. On top of that, profitability also improved, perhaps lower Finance expenses from borrowings (I didn't study in detail). At the same time, the Kua brothers were also buying up some of the Sabana shares from the open market. Who knows what'd have happened if Freight Links had collapsed financially?

Still, Sabana shares continued to slide from $1.05 to the 80s for aro' 1 year. It took ~ 2 years before it recovered above IPO price.

So, the key is perhaps, a financially stronger sponsor (eg. Temasek linked or Blue Chip linked like F&N, CDL) gives better confidence of stability and ability to survive a crisis. Whether real or perceived (since the REIT is supposed to be a separate entity), the market voting machine will still dominate and in this case, perhaps last longer than many of us can remain patient / solvent (if geared)... haha..

Soilbuild looks financially stronger than Freight Links, at least the owner anyway, who must have gotten very rich from all the IPOs.... Still, the credentials and pedigree is not as established and presents uncertainty... That means opportunity... if you think it's worth the risk?