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28-05-2020, 12:09 AM
(This post was last modified: 28-05-2020, 12:10 AM by dreamybear.)
From the article, the valuation for Holiday Inn Resorts Orlando Suites seems to be based on cash flow / rental yield.
Properties in REITs are generally valued by cash flow generated / comparable property value.
I was just thinking(midnight inspiration) :
(a) Scenario 1 - Cash flow generated
Rental guarantees can be used to support the valuation of the properties. Asset enhancement initiatives to increase rental yield can also increase asset value.
(b) Scenario 2 - Comparable Value
This may depend more on the state/cycle of the economy. In a recession, property valuation is lower and higher during boom times.
To look for good value REITs then, perhaps to buy when there is very high discount to asset value(esp when asset is revalued downwards during bad times) or when there is a lot of asset enhancement potential or properties are currently charging below mkt rentals(with potential for rental upward revision).
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https://www.theedgesingapore.com/views/r...-valuation
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Investing in properties is the same as investing in companies; buy something that is cheap in relation to the future income it produces.
Valuing a property (or company) based on cap rate (or yield) tells you nothing about its future income.
Similarly, valuing a property (or company) based on other comparable properties (or 'peers') also tells you nothing about its future income.
In most cases, the future income of a property is more or less similar to its present income. If it is a good property, its future income will be higher than present income.
But in some cases, the future income of a property is less than its present income. And there are a variety of reasons for it. The income of tenants may be falling. The physical and political environment of the vicinity may be deteriorating. There may be alternative properties available with better value proposition.
Liabilities should also be considered in the valuation of a property (or company), since it has a claim on its income. There may be loans, long-term maintenance obligations, etc.
The starting point for an investor should always be the investigation of value (income of property/company), not price (cap rate/yield).
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Investors of EHT were hoodwinked into thinking it was a bargain when it was priced 50% BV (even excluding QM liabilities). Because sponsor UC never had a good chance of servicing those master leases. Which meant EHT properties never had a good chance of earning reliable income. And so the valuation of EHT's properties based on cap rates or master lease turned out to be unrealistic.
Yes, the properties are real, lots of tourists use it, and its managed by famous hotel franchises. It just isn't worth as much as the prospectuses says it should.
The EHT story is a very good lesson for those interested in avoiding pitfalls in property-related investments.
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https://www.businesstimes.com.sg/compani...1591326826
MAS, CAD investigating Eagle Hospitality Trust directors, officers
gg liao... another one... :O
1) Try NOT to LOSE money!
2) Do NOT SELL in BEAR, BUY-BUY-BUY! invest in managements/companies that does the same!
3) CASH in hand is KING in BEAR!
4) In BULL, SELL-SELL-SELL!
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29-10-2020, 07:47 AM
(This post was last modified: 29-10-2020, 07:48 AM by weijian.)
After bring on a poor product for IPO, this seems to be some amount of saving grace by DBS for their swift action.
The Trustee envisages that the selected candidate should be one that is focused on the long-term rehabilitation of EH-REIT and has a key interest in resolving the current situation for the long-term benefit of the Stapled Securityholders. The selected candidate’s objectives are to be aligned with those of the Stapled Securityholders. The selection of the final candidate will be announced imminently and is expected to be the replacement manager for EH-REIT as well, subject to the necessary approvals (including the Stapled Securityholders’ approval) being obtained at an Extraordinary General Meeting to be convened at a later date. Further information on this process will be announced in due course.
https://links.sgx.com/FileOpen/Trustee%2...eID=636910
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30-12-2020, 08:59 PM
(This post was last modified: 30-12-2020, 08:59 PM by weijian.)
There is strong objection to winding the trust up based on the 5th resolution that was bought up for voting as a result of the failure to pass the earlier ones. Coincidentally, the Sponsor had also proposed a rights issue to recapitalize the EHT and this looks a probable path ahead?
RESULTS OF EXTRAORDINARY GENERAL MEETING HELD ON 30 DECEMBER 2020
However, as Resolutions 1, 2, 3 and 4 were not carried at the EGM and SCCPRE HRM is not appointed as the new manager of EH-REIT, EHT has limited options. Given the present circumstance and challenges, EHT does not have sufficient resources as a going concern. The EH-REIT Trustee will consider the available options for EHT with its advisers, under the current circumstances and provide updates to Stapled Securityholders in due course
https://links.sgx.com/FileOpen/EHT%20-%2...eID=643786
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10-03-2021, 02:37 PM
(This post was last modified: 10-03-2021, 02:37 PM by weijian.)
(14-03-2020, 11:12 AM)weijian Wrote: The Tangs have taken a substantial stake off the remaining stake from the "previous owners", at a ~20-30% below market prices. The Tangs probably believe this is where there is value.
https://links.sgx.com/FileOpen/_Form%203...eID=600381
On hindsight, even the Tangs have been blindsided!
Looking at the way things are going, secured lenders will get back their money, unsecured lenders get a big haircut and shareholders get zero.
If the assets are sold at the bid level indicated by the stalking horse, will there be any value remaining to Stapled Securityholders? Will there be any payment to the Stapled Securityholders who have 2020 declared dividends?
While the entry into the Stalking Horse Agreement will be followed by the Second Bid Round and Auction to solicit higher or otherwise better bids and allow for any restructuring and/or recapitalisation alternatives to be put forward, Stapled Securityholders should note that there is no certainty or assurance that any such other proposals will materialise. At this juncture, based on the debt profile of the Chapter 11 Entities, the “floor price” in the Stalking Horse Agreement is unlikely to generate any residual value to be distributed to Stapled Securityholders (including the relevant Stapled Securityholders’ entitlement to the distribution of US3.478 cents per Stapled Security as declared on 17 February 2020).
Agreement: https://links.sgx.com/FileOpen/EHT-Updat...eID=651392
QnA: https://links.sgx.com/FileOpen/EHT-Stalk...eID=651393
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this one really takes the cake... dbs... no dd.... :O
1) Try NOT to LOSE money!
2) Do NOT SELL in BEAR, BUY-BUY-BUY! invest in managements/companies that does the same!
3) CASH in hand is KING in BEAR!
4) In BULL, SELL-SELL-SELL!
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30-06-2021, 08:14 AM
Eagle Hospitality Trust
Completion of Sale of Non-Auctioned Chapter 11 Properties
https://investor.eagleht.com/newsroom/20...9GO4.1.pdf
https://governanceforstakeholders.com/20...w-too-far/
“Before unitholders apply for units in a new listing, including foreign ones, in what seems to be assumed to be a “sure-win” REITs sector, they may want to ask themselves why certain foreign trusts are listing in Singapore especially when the sponsor is not local and the assets are overseas….the REIT market in U.S. is much bigger, so the question is why are some REITs with U.S. assets seeking listing here rather than back home…we believe it is important for investors to understand what they are investing in under our disclosure-based caveat emptor regime.”
But we did not foresee that it will take less than a year after listing for the eagle to fall.
Stay home and stay safe, everyone.
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(30-06-2021, 08:14 AM)¯|_(ツ)_/¯ Wrote: Eagle Hospitality Trust
Completion of Sale of Non-Auctioned Chapter 11 Properties
https://investor.eagleht.com/newsroom/20...9GO4.1.pdf
https://governanceforstakeholders.com/20...w-too-far/
“Before unitholders apply for units in a new listing, including foreign ones, in what seems to be assumed to be a “sure-win” REITs sector, they may want to ask themselves why certain foreign trusts are listing in Singapore especially when the sponsor is not local and the assets are overseas….the REIT market in U.S. is much bigger, so the question is why are some REITs with U.S. assets seeking listing here rather than back home…we believe it is important for investors to understand what they are investing in under our disclosure-based caveat emptor regime.”
But we did not foresee that it will take less than a year after listing for the eagle to fall.
Stay home and stay safe, everyone.
Prof MYT has made excellent points in his post. In case any one is ever tempted into an overseas Trust, we should make it a point to read this to remind ourselves how easy it is to lose money in it.
Disclaimer :-
I am not an investment professional.
I encourage you to do your own independent "due diligence" on any idea that I write about, because I could be and probably am wrong.
Nothing written here is an invitation to buy or sell any particular stock.
At most, I am handing out an educated guess as to what the markets may do.
The market will always find a new way to make a fool out of me (and maybe, even you!).
Even the best strategies of the past fail, sometimes spectacularly, when you least expect it.
I am not immune to that, so please understand that any past success of mine will probably be followed by failures
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