Sabana REIT: 1Q 2012 DPU 2.26c.

The REIT's yield accretive purchases of five properties last year has helped to push DPU to 2.26c for 1Q 2012. Annualised, this would give us a DPU of 9.04c. Based on the REIT's last closing price of 97.5 per unit, we are still looking at a distribution yield of more than 9%. 9.27% to be more exact.

With a NAV/unit of $1.04, the REIT is still trading at a discount to NAV even though its unit price has risen significantly in the last few months.

Gearing: 33.9%.

Interest cover ratio: 5.5x.

Occupancy: 96% to 98.4%.

WALE: 2.6 years

Weighted average remaining land lease: 39.9 years.

The REIT will go XD on 25 April and income will be distributed on 29 May.

I would like to see the managers working to increase occupancy and negotiate lease renewals with positive rental reversions this year. If successfully executed, we could see DPU improving marginally in the next few quarters.

For anyone interested in investing in an industrial S-REIT for regular income, Sabana REIT would appear to be an attractive proposition even at current prices.

Related post:
Sabana REIT: 4Q 2011 results.

See presentation slides: here.

First REIT: 1Q 2012 DPU 1.93c and a higher fair value?

First REIT has declared a DPU of 1.93c. The unit price of First REIT has been rising steadily. It is clear that Mr. Market is willing to pay a gradually higher price for the REIT's units which leads me to wonder if we could see First REIT's distribution yield compressing to 6% which would bring it closer to PLife REIT's distribution yield which is currently under 6%. This could see the REIT's unit price going to $1.06.

When calculating distribution yield, I would rather use a DPU of 1.6c per quarter instead of 1.93c. Why? When we look at the numbers, we would see that the net property income (NPI) has improved 6% while distributable income has improved some 22%. This is because First REIT is still paying out its gains from divesting its Adam Road property. If we remove this component, the DPU should hover at 1.6c or so.

In fact, year on year, if we look at the distributions from operation, it has actually declined a marginal 1.4%. Total comprehensive income, even after the removal of the one off gain from the divestment of its Adam Road property, saw a reduction of some 7%; this is due to higher income tax expense. So, one would not be wrong to wonder if its estimated post rights DPU of about 1.6c per quarter in future could be maintained, everything else remaining equal.

When the REIT acquired its first property in South Korea, freehold Sarang Hospital, many were optimistic. However, the acquistion increased the REIT's gross revenue by 6.3% while increasing its operating expenses by 51.1%. Expectations for a higher DPU due to the acquisition has yet to be met.

Some might say that the underperformance is to be expected since being the REIT's only facility in South Korea, there is no economies of scale per se. In fact, I wondered about this when the acquisition was announced last year.

See the relevant blog post: here (First REIT: Yield accretive purchase in South Korea).

Although S-REITs distribute a minimum of 90% of their income to unitholders unlike companies which pay dividends from their earnings, it might still be of interest to some to note that First REIT's earnings per unit has declined year on year from 2.13c to 1.51c. This takes into consideration its rights issue, of course.

With its NAV per unit at 79.99c, the REIT is now trading at a 15% premium to NAV.

What remains largely in the REIT's favour is its very low gearing level and if it were to gear up to 40% to make yield accretive purchases in locations where it could benefit from economies of scale, we could see its DPU bump up by more than 20%.

At current prices, I would hold and not add to my long position.

See financial statement: here.

Related post:
First REIT: To sell or not to sell?

SPH: Interim dividend of 7c per share.

SPH remains my largest investment in a blue chip. Over the years, it has been very good to me. Last year, I had hoped to buy more SPH shares if price should dip to $3.60 a piece but it never did.

Clementi Mall.

Singapore Press Holdings’ (SPH) 2QFY12 PATMI came in at S$83.9m, or 5 S-cents per share, which was 16% higher YoY. 1HFY12 PATMI now make up 46% of our full year forecast, falling short mainly due to lower investment income.

2QFY12 topline was S$298.5m - in-line with our expectations - and making up 50% of our full year forecast. An interim dividend of 7 S-cents was declared.

We continue to view SPH favorably as it continues to ramp up on its retail mall strategy - a stable counterweight to its print business going forward. Group investible funds currently stand at S$0.9bn, which points to sufficient capacity for further allocation into its retail strategy ahead.

Maintain BUY with a higher fair value estimate of S$4.05 (versus S$3.99 previously) mostly due to stronger assumptions for Clementi Mall.

Source: OCBC Research, 16 April 2012.

AIMS AMP Capital Industrial REIT: 4Q FY2012.

AIMS AMP Capital Industrial REIT has declared a DPU of 2.7c for 4Q FY2012. Total DPU for FY2012 is, therefore, 10.45c. At the last session's closing price of $1.185 a unit, this means a distribution yield of about 8.82%. The REIT goes XD on 2 May and will distribute income on 19 June.

Gearing: 30% (which would drop to 28.8% upon completion of sale of 31 Admiralty Road). 25 properties revalued upwards and this probably helped to lower the REIT's gearing.

NAV/unit: $1.406.

Interest cover ratio: 6.2x

Occupancy: 99.2%.

Weighted average land lease expiry: 41.7 years.

Weighted average lease expiry (WALE): 2.62 years.

Average security deposits: 8.1 months.

The REIT also saw positive rental reversions of 10 to 15% in FY2012.

With 38.9% of leases expiring in 2013, the management has either commenced negotiations to extend the leases with tenants and sub-tenants or completed re-leasing for the affected properties. It is also good to know that 88.2% of Master Leases expiring in 2013 are supported by underlying sub-leases.

The REIT is offering a Distribution Reinvestment Plan this time. For unitholders who would like to own more units at current prices without having to pay any brokerage fees, this is probably a good thing.

"By the implementation of the Distribution Reinvestment Plan, the Manager is providing Unitholders with an option to receive Distributions, either in the form of Units or cash or a combination of both, declared on the Units held by Unitholders. It enables Unitholders to acquire additional Units without having to incur transaction or other related costs.

"AIMSAMPIREIT will also benefit from Unitholders’ participation in the Distribution Reinvestment Plan as, to the extent that Unitholders elect to receive distributions in the form of Units, the cash is retained by AIMSAMPIREIT to fund its continuing growth and expansion. The retention of cash and the issue of Units in lieu of cash under the Distribution Reinvestment Plan will also enlarge AIMSAMPREIT’s capital base, strengthen its working capital reserves and improve the liquidity of Units."

Personally, I would not be taking part as I am investing for income. Also, I am not looking to increase my long position at current prices.

See presentation slides: here.

See announcement on Distribution Reinvestment Plan: here.

Related posts:
1. AIMS AMP Capital Industrial REIT: 3Q FY2012.
2. AIMS AMP Capital Industrial REIT: Accumulate on weakness.

FCOT: DPU up 16.8% in the last 18 months.

I did a piece on FCOT in October 2010 when I said that the REIT has probably turned the corner. At that time, it was trading at 15.5c a unit (which would have been 77.5c a unit, post consolidation). It closed at 87.5c in the last session.

DPU was 0.5549c then (which would have been 2.7745c, post consolidation). FCOT has declared a DPU of 3.2423c for 1H FY12 which means that DPU has increased some 16.8% from 18 months ago. It will go XD on 25 April and income distribution will take place on 30 May.

Annualised, we are looking at a distribution yield of 7.4% at a unit price of 87.5c.

Distributable income increased 7.7% YoY to S$15.9m as a result of lower interest expenses.

Average portfolio occupancy eased marginally to 96.1% from 97.6% seen in 1Q.

Weighted average lease to expiry as at 31 Mar was maintained at 3.4 years, with 17.0% of its leases due to expire in FY12.

NAV/unit: $1.33

Gearing: 36.1%

Interest cover ratio: 3.25x.

Related post:
FCOT: Turning around.

See OCBC Research: here.

See presentation slides: here.

Cache Logistics Trust: 1Q 2012 DPU 2.086c.

It is no secret that I like industrial S-REITs as passive income generators. I am also vested in Cache Logistics Trust although my long position here is quite a bit smaller compared to my investments in Sabana REIT and AIMS AMP Capital Industrial REIT.

DPU for the quarter came in at 2.086 S cents and represented a 6.9% YoY increase. 

Income distribution is payable 30th of May 2012.

CACHE’s portfolio properties remained 100% occupied.

The weighted average lease expiry (WALE) stood at 4.4 years.

Aggregate leverage improved from 29.6% as at 31 Dec 2011 to 27.7%. This gives the REIT an estimated S$110m of additional debt headroom for future investment opportunities.

Interest cover maintained at a strong 8.0x.

Related post:
Cache Logistics Trust: 4Q and 2011 results.

See OCBC Research, 19 April:
Cache Logistics Trust: Positive start to FY12.

See presentation slides: here.

AIMS AMP Capital Industrial REIT: Credit rating.

Life has been somewhat stressful for me lately. Lots of things happening. That explains the paucity of blog posts.

I am trying to get up to speed with things and also trying to catch up on my reading of business periodicals which I have neglected lately.

In today's The Business Times, I read that AIMS AMP Capital Industrial REIT has received an investment grade credit rating of BBB- from Standard & Poor's. This is good news indeed. This rating is the same as the one received by Sabana REIT last year in August.

This means that AIMS AMP Capital Industrial REIT would be able to access investment grade debt and capital markets from now on. It would also allow the REIT to gear up to a maximum of 60% if necessary.

Anyone who has been following my blog would know that I have been walking the talk when it comes to AIMS AMP Capital Industrial REIT. So, for anyone who has walked the walk with me although there has been no lack of naysayers, good on you. Congratulations!

Fair value for AIMS AMP Capital Industrial REIT, I believe, remains closer to S$1.25 per unit which would see its distribution yield compressing to about 8% per annum.

Related posts:
1. AIMS AMP Capital Industrial REIT: How much higher?
2. OCBC Research: Industrial REITs.