Viva Industrial Trust

[corydorus]

I will be surprise they can inflate beyond reasonable value. Thought this requires external party to certify or something like that.

On surface, % of NAV seems better for shareholders as it measures efficiency for every dollar whereas % of income may means indiscriminate raising of cash to increase absolute income however the dividend yield can go lower.

[valueinvestor]

Not all reits are scam. Starhill Global is a good reit which never anyhow borrow and acquire property.

[AlphaQuant]

seems like reits shifting from % of nav to % of income.. is this good or bad?

I prefer % of income as manager will try to increase distributable income, and I get more dividends
if % of nav, we see managers like ARA, inflate the NAV of suntec reit and take in higher fees...

ideally what should align managers vs investor's interest is % of DPU

nothing stops them from issuing more equities to make acquisitions which ultimately leads to increase in distributable income. This does not necessarily lead to a higher DPU since more units are issued. But of cos, DPU increases can come simply thru higher gearing as well.

[lonewolf]

Standard Chartered has been appointed as Stabilising Manager for Viva Industrial Trust.

SGX announcement

Ammo? A mere 12,820,000 units. Anybody wanna take bet how long this will last? I say 3-5 days.

[ForeverAlone]

hm... this one is likely to go under water like soil build reit?

[AlphaQuant]

Goh Eng Yeow has written a piece on this in the ST previously - i reproduce part of it below, esp the "dodgy" part in bold.

***************************

In addition, the two sponsors, Ho Lee Group and Kim Seng Holdings, will together cough up $75 million to take 14 per cent while listed United Engineers - which is selling UE BizHub East to the trust - will pay $23.2 million for a 5 per cent stake.

This means the four parties will together own nearly two-thirds of the trust - a ringing endorsement of their confidence in it.

As a further sweetener, the prospectus also lists a string of possible acquisitions from Mr Tong's Summit Group, UE, as well as the two sponsors, and that may further boost growth.

In other words, it is an offer packed full of carrots to entice both institutional and retail investors alike.

So it may come as a big surprise that there are some misgivings over the proposed offering.

The concern rests on page 61 of the prospectus. This flags the big variation in the valuation of UE BizHub East, which makes up over two-thirds of the trust's value.

It said: "The independent valuers have valued UE BizHub East at $522 million (Suntec Real Estate) and $518 million (Jones Lang LaSalle), as at April 30, 2013."

However, when UE announced that it was selling UE BizHub East on July 4, it disclosed that Colliers International had valued the business park-cum-hotel at only $293 million as at Dec 31.

That suggests that between Dec 31 and April 30, UE BizHub East had leapt in value by $229 million using the Suntec valuation, or $225 million using Jones Lang's yardstick.

UE will book an estimated net divestment gain of $86.7 million if the sale goes through.

As a note of caution, the prospectus says: "The valuation of any of the properties does not guarantee a sale price at that value at present or in the future. The price at which Vi-Reit may sell a property may be lower than its purchase price."

So is the trust over-paying for UE BizHub East?

On Page 135, the prospectus observes: "As noted in the UE announcement, the purpose of the independent valuation commissioned by UE was for 'financing and year-end financial reporting purposes', and not for the purpose of a sale transaction."

Just to clear doubts, it gave the basis for the valuations made by Suntec and Jones Lang, as well as the valuation of UE BizHub East with and without rental support.

The prospectus also notes that between the end of December and April 30, there was a jump in the business park's occupancy rate from 47 per cent to 64 per cent while the hotel started operations in January.

So one issue which an investor may like to consider besides the yield is the difference in UE BizHub East's valuation. They will have to make up their minds as to which valuer to believe if they want to invest in Viva Industrial Trust when it launches its offer.

[ForeverAlone]

thanks for the info
seems like nowadays have so many traps
difficult for small time retail investors like me wor

[AlphaQuant]

http://infopub.sgx.com/FileOpen/VIVA_IND...eID=262427

22 out of 50 chance of allotment @ the atm with 50% of allotment going to those who applied for >100lots.

Without a large stablisation ammo from SCB, it feels like an underwater issue.

[ForeverAlone]

5 times sub only, feels weak~ we shall see
if 10-20% underwater maybe can whack haha

[CityFarmer]

Let's keep a record on its first day trading.

Viva ends flat amid rate concerns

SINGAPORE - Viva Industrial Trust, a Singapore business and property trust, ended its first day of trading unchanged after opening lower amid concerns that interest rates will rise and make it difficult for real estate investment trusts to raise funds, Bloomberg reported.

The shares opened at 76.5 Singapore cents at 2 pm local time on Monday, 1.9 per cent lower than the initial stock offering price of 78 cents apiece. Viva Industrial had raised S$365 million through a share sale to Chinese property tycoon Tong Jinquan and the public.
...
http://www.todayonline.com/business/viva...e-concerns