Manulife US REIT

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#31
(07-06-2016, 11:05 AM)MINX Wrote:
(07-06-2016, 10:39 AM)Temperament Wrote: What about comparing to the upcoming FLCT IPO?
It seems IPO way is not for "value Investors" to talk about.
Someone ask a good question why FLCT IPO IN SGP and not AUS?
If it's a HK OR CHINA IPO, i will not even consider no matter what the market thinks.
Anyone like to answer why IPO in SGP and not in Aus?

i know!
i know!
IPO stands for "It's Probably Overpriced"

But i think everything can be valued.
Never look down on an IPO if it is valued "probably".
Ha! Ha!
Fraser CPT has build up quite a good reputation & following in Singapore for the 3 Reits that it currently manage, so they will get a better reception if they list here, perhaps? Confused

Actually, the best is if we can ask the ISSUER of IPO why here and not there?
Can we?
One thing obvious is bank's FD rate in Aus are much higher than SGP.
i suspect the AUS doesn't save so much money like us SGP - CPF, ...
Anyone has some statistics?
Or maybe have some solid information?

If IPO is CPF approved, you have at least some sort of answer already.
WB:-

1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.

Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.

NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
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#32
Reviving this thread,.....

1) Back in June 19th. this year, there was a private placement done when The Plaza was acquired.

2) Now, in beginning-September, as the mgr is abt to acquire another property, called, in short, The Exchange, there will be a Rights Issue,details of which have been announced this morning.

Press Release : http://infopub.sgx.com/FileOpen/MUST%20-...eID=469422

Detailed Document : http://infopub.sgx.com/FileOpen/MUST%20-...eID=469421

Skimmed through the documents today,... and of all the infos provided, the one disturbing piece if we look at Page 22 of the above detailed document,... which says :-

Based on Proforma Financial Effects using FY2016 for comparison, the DPU will drop from the actual 3.55 US Cts to 3.41 US Cts post-acquisition of The Exchange..

Did I miss something, or have I not considered some other details which may have rendered the resultant DPU more than 3.55 Cts after acq ? A lower DPU after this acquisition is not healthy for unitholders,...
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#33
I'll add-in some further explanations that I thought of this morning after replying to a forummer in another forum :-

Yes bro,... it is accretive, but NOT dpu-accretive. It is yield-accretive.

Document for reference, the Circular : http://infopub.sgx.com/FileOpen/MUST%20-...eID=469425

Being 'yield-accretive' is DIFFERENT from being 'dpu-accretive'. The 'yield-accretive' matter is explained in the following paras on page 29 of the above document which is The Circular :- 

4.4 Accretive Acquisition Funded by a Rights Issue

4.4.1 Accretive Acquisition that Improves DPU Yield to Unitholders

FOR ILLUSTRATIVE PURPOSES ONLY: Assuming the Acquisition was completed on 20 May 2016 (the date of listing of Manulife US REIT) and Manulife US REIT held and operated the Property in FY2016, the pro forma DPU yield of the Enlarged Portfolio would increase by 2.2% to approximately 6.23%(1) compared to the pro forma DPU yield of the Current Portfolio of approximately 6.10%(2).

The 2016 actual yield is said to be at only 6.10% annualised from an actual dpu of 3.55 cts divided by the last closing price last Friday of 96.5 Cts.
BUT the way they calculated the resultant yield after the acquisition of 10 Exchange Place and the completion of the Rights Issue is by dividing 3.41 cts (resultant dpu) with A LOWER PRICE OF 88.6 Cts.

3.41 US Cts is THE RESULTANT DPU, being LOWER tha the 3.55 US Cts that we got last year, with all references being equal !

The resultant dpu is LOWER !!!!!!

Did I miss anything ?
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#34
Dont know much about reit but one reason could be because the exchange purchase will be fully funded by the rights proceeds. As man u life reit is leveraged, a 100% or close to it equity funding will result in the scenario you described
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#35
(03-09-2017, 10:15 AM)CY09 Wrote: Dont know much about reit but one reason could be because the exchange purchase will be fully funded by the rights proceeds. As man u life reit is leveraged, a 100% or close to it equity funding will result in the scenario you described

Tq CY09, bro Mod... I appreciated your reply,....

I'm afraid, still,... this is not good for unitholders, right ? Whatever the reasons,...

But, after saying the above,... among the docs released yesterday, there is one doc that mentioned the following :-

The current intention of the Manager is to finance the Total Acquisition Cost with debt financing and proceeds from the Rights Issue. However, the Acquisition Fee in relation to the Acquisition is to be paid in the form of Units.

The final decision regarding the proportion of equity and debt financing for funding the proposed Acquisition will be made by the Manager at the appropriate time taking into account the then prevailing market conditions and interest rate environment, availability of alternative funding options, the impact on Manulife US REIT’s capital structure, distributions per Unit ("DPU") and debt expiry profile and the covenants and requirements associated with each financing option.

---------------------------------------------------------------------------------------------------------------
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#36
(03-09-2017, 09:59 AM)WH Cheng Wrote: I'll add-in some further explanations that I thought of this morning after replying to a forummer in another forum :-

Yes bro,... it is accretive, but NOT dpu-accretive. It is yield-accretive.

Document for reference, the Circular : http://infopub.sgx.com/FileOpen/MUST%20-...eID=469425

Being 'yield-accretive' is DIFFERENT from being 'dpu-accretive'. The 'yield-accretive' matter is explained in the following paras on page 29 of the above document which is The Circular :- 

4.4 Accretive Acquisition Funded by a Rights Issue

4.4.1 Accretive Acquisition that Improves DPU Yield to Unitholders

FOR ILLUSTRATIVE PURPOSES ONLY: Assuming the Acquisition was completed on 20 May 2016 (the date of listing of Manulife US REIT) and Manulife US REIT held and operated the Property in FY2016, the pro forma DPU yield of the Enlarged Portfolio would increase by 2.2% to approximately 6.23%(1) compared to the pro forma DPU yield of the Current Portfolio of approximately 6.10%(2).

The 2016 actual yield is said to be at only 6.10% annualised from an actual dpu of 3.55 cts divided by the last closing price last Friday of 96.5 Cts.
BUT the way they calculated the resultant yield after the acquisition of 10 Exchange Place and the completion of the Rights Issue is by dividing 3.41 cts (resultant dpu) with A LOWER PRICE OF 88.6 Cts.

3.41 US Cts is THE RESULTANT DPU, being LOWER tha the 3.55 US Cts that we got last year, with all references being equal !

The resultant dpu is LOWER !!!!!!

Did I miss anything ?

=============
Edit: my mobile browser is not showing the html quote tags to split my reply

Some quick calculations based on the MUST - Circular and sgx reit data website seems to show its not accretive. Correct me if I am wrong 

From reit data
DPU is 1.65c per quarter and price is 96.5c giving a yield of 6.84%

From circular page 31
Distributable income after purchase increases by 8.7m for 225 days (starting from 20 may). Annualized is 8.7/225x365=14.11m

New shares issued is 930m-627m=303m
Additional distribution over additional shares is 14.11/303=4.656c
Yield is 4.656/69.5=6.7% which is less than 6.84%

To be overall accretive, the rights funds need to yield higher than current yield on market price of 6.84%
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#37
(03-09-2017, 11:17 AM)angtc11 Wrote:
(03-09-2017, 09:59 AM)WH Cheng Wrote: I'll add-in some further explanations that I thought of this morning after replying to a forummer in another forum :-

Yes bro,... it is accretive, but NOT dpu-accretive. It is yield-accretive.

Document for reference, the Circular : http://infopub.sgx.com/FileOpen/MUST%20-...eID=469425

Being 'yield-accretive' is DIFFERENT from being 'dpu-accretive'. The 'yield-accretive' matter is explained in the following paras on page 29 of the above document which is The Circular :- 

4.4 Accretive Acquisition Funded by a Rights Issue

4.4.1 Accretive Acquisition that Improves DPU Yield to Unitholders

FOR ILLUSTRATIVE PURPOSES ONLY: Assuming the Acquisition was completed on 20 May 2016 (the date of listing of Manulife US REIT) and Manulife US REIT held and operated the Property in FY2016, the pro forma DPU yield of the Enlarged Portfolio would increase by 2.2% to approximately 6.23%(1) compared to the pro forma DPU yield of the Current Portfolio of approximately 6.10%(2).

The 2016 actual yield is said to be at only 6.10% annualised from an actual dpu of 3.55 cts divided by the last closing price last Friday of 96.5 Cts.
BUT the way they calculated the resultant yield after the acquisition of 10 Exchange Place and the completion of the Rights Issue is by dividing 3.41 cts (resultant dpu) with A LOWER PRICE OF 88.6 Cts.

3.41 US Cts is THE RESULTANT DPU, being LOWER tha the 3.55 US Cts that we got last year, with all references being equal !

The resultant dpu is LOWER !!!!!!

Did I miss anything ?

=============
Edit: my mobile browser is not showing the html quote tags to split my reply

Some quick calculations based on the MUST - Circular and sgx reit data website seems to show its not accretive. Correct me if I am wrong 

From reit data
DPU is 1.65c per quarter and price is 96.5c giving a yield of 6.84%

From circular page 31
Distributable income after purchase increases by 8.7m for 225 days (starting from 20 may). Annualized is 8.7/225x365=14.11m

New shares issued is 930m-627m=303m
Additional distribution over additional shares is 14.11/303=4.656c
Yield is 4.656/69.5=6.7% which is less than 6.84%

To be overall accretive, the rights funds need to yield higher than current yield on market price of 6.84%
Tq Ang,... you have provided a different method to count the yield,...

But,..the actual dvd amount paid out for the whole of FY2016 was 3.55 cts only, and not (1.65 cts x 4) which you have used in yr calculation above and which you pulled from reitdata.com.

Using (3.55 cts / 225) x 365 divided by the closing price of 9.65 cts gives a yield of approximately 6.00% only, that's what they are trying to say,... So,... from yr calculation of using the Rights Price of 69.5 cts to calculate the resultant yield, they will claim that it is 6.84%, which is still higher than my 6.00% above.

Just a question : which is the right way to count ? TO divide by the expected resultant TERP or to divide by the Offer Price of the Rights Issue ?
Reply
#38
(03-09-2017, 11:57 AM)WH Cheng Wrote:
(03-09-2017, 11:17 AM)angtc11 Wrote:
(03-09-2017, 09:59 AM)WH Cheng Wrote: I'll add-in some further explanations that I thought of this morning after replying to a forummer in another forum :-

Yes bro,... it is accretive, but NOT dpu-accretive. It is yield-accretive.

Document for reference, the Circular : http://infopub.sgx.com/FileOpen/MUST%20-...eID=469425

Being 'yield-accretive' is DIFFERENT from being 'dpu-accretive'. The 'yield-accretive' matter is explained in the following paras on page 29 of the above document which is The Circular :- 

4.4 Accretive Acquisition Funded by a Rights Issue

4.4.1 Accretive Acquisition that Improves DPU Yield to Unitholders

FOR ILLUSTRATIVE PURPOSES ONLY: Assuming the Acquisition was completed on 20 May 2016 (the date of listing of Manulife US REIT) and Manulife US REIT held and operated the Property in FY2016, the pro forma DPU yield of the Enlarged Portfolio would increase by 2.2% to approximately 6.23%(1) compared to the pro forma DPU yield of the Current Portfolio of approximately 6.10%(2).

The 2016 actual yield is said to be at only 6.10% annualised from an actual dpu of 3.55 cts divided by the last closing price last Friday of 96.5 Cts.
BUT the way they calculated the resultant yield after the acquisition of 10 Exchange Place and the completion of the Rights Issue is by dividing 3.41 cts (resultant dpu) with A LOWER PRICE OF 88.6 Cts.

3.41 US Cts is THE RESULTANT DPU, being LOWER tha the 3.55 US Cts that we got last year, with all references being equal !

The resultant dpu is LOWER !!!!!!

Did I miss anything ?

=============
Edit: my mobile browser is not showing the html quote tags to split my reply

Some quick calculations based on the MUST - Circular and sgx reit data website seems to show its not accretive. Correct me if I am wrong 

From reit data
DPU is 1.65c per quarter and price is 96.5c giving a yield of 6.84%

From circular page 31
Distributable income after purchase increases by 8.7m for 225 days (starting from 20 may). Annualized is 8.7/225x365=14.11m

New shares issued is 930m-627m=303m
Additional distribution over additional shares is 14.11/303=4.656c
Yield is 4.656/69.5=6.7% which is less than 6.84%

To be overall accretive, the rights funds need to yield higher than current yield on market price of 6.84%
Tq Ang,... you have provided a different method to count the yield,...

But,..the actual dvd amount paid out for the whole of FY2016 was 3.55 cts only, and not (1.65 cts x 4) which you have used in yr calculation above and which you pulled from reitdata.com.

Using (3.55 cts / 225) x 365 divided by the closing price of 9.65 cts gives a yield of approximately 6.00% only, that's what they are trying to say,... So,... from yr calculation of using the Rights Price of 69.5 cts to calculate the resultant yield, they will claim that it is 6.84%, which is still higher than my 6.00% above.

Just a question : which is the right way to count ? TO divide by the expected resultant TERP or to divide by the Offer Price of the Rights Issue ?

To me, the pro forma is just for standardized reporting and in this particular case, events have overtaken the pro forma. I will always use current dpu on market price to compare.
Use the rights price to calculate the yield of the new capital to decide whether its worthwhile to subscribe. Use the terp to compare the 'final' yield after subscription to decide whether to get the shares before ex rights (but it's theoretical anyway, unless you can get at 96.5c)
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#39
(03-09-2017, 01:31 PM)angtc11 Wrote:
(03-09-2017, 11:57 AM)WH Cheng Wrote:
(03-09-2017, 11:17 AM)angtc11 Wrote:
(03-09-2017, 09:59 AM)WH Cheng Wrote: I'll add-in some further explanations that I thought of this morning after replying to a forummer in another forum :-

Yes bro,... it is accretive, but NOT dpu-accretive. It is yield-accretive.

Document for reference, the Circular : http://infopub.sgx.com/FileOpen/MUST%20-...eID=469425

Being 'yield-accretive' is DIFFERENT from being 'dpu-accretive'. The 'yield-accretive' matter is explained in the following paras on page 29 of the above document which is The Circular :- 

4.4 Accretive Acquisition Funded by a Rights Issue

4.4.1 Accretive Acquisition that Improves DPU Yield to Unitholders

FOR ILLUSTRATIVE PURPOSES ONLY: Assuming the Acquisition was completed on 20 May 2016 (the date of listing of Manulife US REIT) and Manulife US REIT held and operated the Property in FY2016, the pro forma DPU yield of the Enlarged Portfolio would increase by 2.2% to approximately 6.23%(1) compared to the pro forma DPU yield of the Current Portfolio of approximately 6.10%(2).

The 2016 actual yield is said to be at only 6.10% annualised from an actual dpu of 3.55 cts divided by the last closing price last Friday of 96.5 Cts.
BUT the way they calculated the resultant yield after the acquisition of 10 Exchange Place and the completion of the Rights Issue is by dividing 3.41 cts (resultant dpu) with A LOWER PRICE OF 88.6 Cts.

3.41 US Cts is THE RESULTANT DPU, being LOWER tha the 3.55 US Cts that we got last year, with all references being equal !

The resultant dpu is LOWER !!!!!!

Did I miss anything ?

=============
Edit: my mobile browser is not showing the html quote tags to split my reply

Some quick calculations based on the MUST - Circular and sgx reit data website seems to show its not accretive. Correct me if I am wrong 

From reit data
DPU is 1.65c per quarter and price is 96.5c giving a yield of 6.84%

From circular page 31
Distributable income after purchase increases by 8.7m for 225 days (starting from 20 may). Annualized is 8.7/225x365=14.11m

New shares issued is 930m-627m=303m
Additional distribution over additional shares is 14.11/303=4.656c
Yield is 4.656/69.5=6.7% which is less than 6.84%

To be overall accretive, the rights funds need to yield higher than current yield on market price of 6.84%
Tq Ang,... you have provided a different method to count the yield,...

But,..the actual dvd amount paid out for the whole of FY2016 was 3.55 cts only, and not (1.65 cts x 4) which you have used in yr calculation above and which you pulled from reitdata.com.

Using (3.55 cts / 225) x 365 divided by the closing price of 9.65 cts gives a yield of approximately 6.00% only, that's what they are trying to say,... So,... from yr calculation of using the Rights Price of 69.5 cts to calculate the resultant yield, they will claim that it is 6.84%, which is still higher than my 6.00% above.

Just a question : which is the right way to count ? TO divide by the expected resultant TERP or to divide by the Offer Price of the Rights Issue ?

To me, the pro forma is just for standardized reporting and in this particular case, events have overtaken the pro forma. I will always use current dpu on market price to compare.
Use the rights price to calculate the yield of the new capital to decide whether its worthwhile to subscribe. Use the terp to compare the 'final' yield after subscription to decide whether to get the shares before ex rights (but it's theoretical anyway, unless you can get at 96.5c)

I see your point,... but that 96.5 cts last done price may not come back,.. so, that TERP may move too,..

Thinking abt this and analysing thru your points, I have another view. Why don't we consider a situation whereby the shareholdings are at a price that is slightly lower than the TERP given above as the benchmark. Then we try to work out if it is worthwhile to subscribe.

Say, for simplicity,.. 18000 shares are currently being held at 85.80 cts, being 3% below the TERP. The cost for this holding is $15444.

This 18000 units is given a chance to subscribe for 7380 Rights Units at a price of 69.5 cts, and say all are taken up, hence, the cost for taking up the Rights becomes $5129.10.

After having absorbed the Rights units, the holdings will rise to 25380 units with an average price of, [(15444.00 + 5129.10)/25380 units] = 81.06 cts.

The Annualised dpu after all the acquisitions + the Placement in June + the RI exercise now = 5.53 cts.

The new yield of this holdings now becomes 5.53 cts / 81.06 cts = 6.82%.

If my calculations above are logical, then we will need to decide if we can live with a new yield of 6.82% moving fwd.

What if we gauge from this way ?
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#40
(03-09-2017, 03:00 PM)WH Cheng Wrote: I see your point,... but that 96.5 cts last done price may not come back,.. so, that TERP may move too,..

Thinking abt this and analysing thru your points, I have another view. Why don't we consider a situation whereby the shareholdings are at a price that is slightly lower than the TERP given above as the benchmark. Then we try to work out if it is worthwhile to subscribe.

Say, for simplicity,.. 18000 shares are currently being held at 85.80 cts, being 3% below the TERP. The cost for this holding is $15444.

This 18000 units is given a chance to subscribe for 7380 Rights Units at a price of 69.5 cts, and say all are taken up, hence, the cost for taking up the Rights becomes $5129.10.

After having absorbed the Rights units, the holdings will rise to 25380 units with an average price of, [(15444.00 + 5129.10)/25380 units] = 81.06 cts.

The Annualised dpu after all the acquisitions + the Placement in June + the RI exercise now = 5.53 cts.

The new yield of this holdings now becomes 5.53 cts / 81.06 cts = 6.82%.

If my calculations above are logical, then we will need to decide if we can live with a new yield of 6.82% moving fwd.

What if we gauge from this way ?

The sunk cost of 15444 shouldn't affect affect your decision to subscribe for the rights (other than whether the counter will be over-represented in your portfolio after subscription). The rights should be judged on their own merits
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