REIT price has fallen close to 12% over the past 6 months. Is this correlated to economy slow down and property crisis in China? Could you do an update on the REIT please?
I'm still generally prefer industrial REITs to retail and office REITs. If we compare MapleTree Industrial with MapleTree Pan Asia we find that the former has longer weighted average lease expiry of 4 years vs 2.6 years (factoring in income), and much higher overall average property yield, 7.8% vs 4.4%. This more than compensates for the higher gearing, and supports a higher valuation. Some analysts think MapleTree Industrial REIT is more than 20% undervaled at today's share price, where as MapleTree Pan Asia is trading ar slightly more than fair value. As for the crowds in the malls, I think a lot of people are just window shopping and frequently go home and buy online. Let's face it it's usually less expensive!
I have a burning question. Since REITS pays out at least 90% of their net income, would they have sufficient funds or gearing to borrow for the renewal of lease expiry such as festival walk? What should be the asset strategy here? As lease approaches zero, how would this impact the stock? If no renewal is to be granted, what is the consequences to shareholders? Hopefully you will be able to address such pertinent issues in greater depth perhaps with insights from the management? Thanks!
Hi Ben, a REIT will typically raise funds through equity and/or debt to expand. So we may expect the same for a land lease renewal. If no renewal is granted, the asset is essentially lost, which will impact the REIT's net asset value and rental income.
@@TheFifthPersonChannel this is what I am essentially concerned with reits that hold assets with relatively short leases esp the industrial reits with local assets. It's akin to hdb decaying lease issue that is waiting to explode.
@ben k, yes, it is factor you have to consider before you invest. Ideally, if a land lease renewal is not possible, a good REIT manager will sell the asset before the value decays substantially and recycle the capital into a newer/better asset.
Excellent review. Thanks. I recall that Rusmin was quite negative about the merger between MCT and MNACT so it's good to see that he's come around in his viewpoint. Festival Walk was a huge part of MNACT before and when it was doing well, the results were great. Conversely, when covid hit, it dragged the results down. It feels like there's a lot of upside there now with China/Hong Kong opening up and the Shanghai property is pretty solid too. The Beijing one is going to struggle for a while, even with the BMW renewal but Vivo should more than make up for that. I agree with your comments about Vivo.....it's really busy with tourists on the weekday and packed on the weekends. Assuming the further development of Sentosa and the casino area goes ahead, nothing but growth in the years to come. MBT 1 and 2 are solid foundations too so overall, MPACT looks like a solid bet.
Theoretically. But certain REITs may trade under their book values for a long time, so we like to compare their P/B to their long-term average for a better picture.
Looking forward an update on MPact soon
Coming next!
REIT price has fallen close to 12% over the past 6 months. Is this correlated to economy slow down and property crisis in China? Could you do an update on the REIT please?
Thanks for the suggestion!
A year later, is the reit still undervalued?
yes at 1.21
I'm still generally prefer industrial REITs to retail and office REITs. If we compare MapleTree Industrial with MapleTree Pan Asia we find that the former has longer weighted average lease expiry of 4 years vs 2.6 years (factoring in income), and much higher overall average property yield, 7.8% vs 4.4%. This more than compensates for the higher gearing, and supports a higher valuation. Some analysts think MapleTree Industrial REIT is more than 20% undervaled at today's share price, where as MapleTree Pan Asia is trading ar slightly more than fair value.
As for the crowds in the malls, I think a lot of people are just window shopping and frequently go home and buy online. Let's face it it's usually less expensive!
Thanks for sharing your views, Jonathan! Good points as well!
Could you help me understand what the dividend “3 cash options” refer to?
I have a burning question. Since REITS pays out at least 90% of their net income, would they have sufficient funds or gearing to borrow for the renewal of lease expiry such as festival walk? What should be the asset strategy here? As lease approaches zero, how would this impact the stock? If no renewal is to be granted, what is the consequences to shareholders? Hopefully you will be able to address such pertinent issues in greater depth perhaps with insights from the management? Thanks!
Hi Ben, a REIT will typically raise funds through equity and/or debt to expand. So we may expect the same for a land lease renewal. If no renewal is granted, the asset is essentially lost, which will impact the REIT's net asset value and rental income.
@@TheFifthPersonChannel this is what I am essentially concerned with reits that hold assets with relatively short leases esp the industrial reits with local assets. It's akin to hdb decaying lease issue that is waiting to explode.
they are exempted from corporate taxes once they are labelled as "reits"
@ben k, yes, it is factor you have to consider before you invest. Ideally, if a land lease renewal is not possible, a good REIT manager will sell the asset before the value decays substantially and recycle the capital into a newer/better asset.
How do you find the historical average PB? each year end price divided by the book value of the year?
It is the average value of all the daily P/B data points in a given time period.
that didn't turn out well
We actually bought more; it's now paying near 7% yields.
@@TheFifthPersonChannel 1.21 now..buy more?
Festival Walk (FW) seems to be a drag on MPACT. Any visibility on FW’s key performance metrics going forward?
Outstanding gentlemen.👍
Thank you kindly!
Thank you for the sharing. Can you guys talk about CLR ETF Reit or SATS in that case?
Good value if it comes closer to 1.70 (Vested)
I like MCT but not comfortable with MNACT portion. The merger feels like to use the stronger MCT to offset the weaker MNACT.
We'd have preferred a pure play Singapore REIT as well!
Excellent review. Thanks. I recall that Rusmin was quite negative about the merger between MCT and MNACT so it's good to see that he's come around in his viewpoint. Festival Walk was a huge part of MNACT before and when it was doing well, the results were great. Conversely, when covid hit, it dragged the results down. It feels like there's a lot of upside there now with China/Hong Kong opening up and the Shanghai property is pretty solid too. The Beijing one is going to struggle for a while, even with the BMW renewal but Vivo should more than make up for that. I agree with your comments about Vivo.....it's really busy with tourists on the weekday and packed on the weekends. Assuming the further development of Sentosa and the casino area goes ahead, nothing but growth in the years to come. MBT 1 and 2 are solid foundations too so overall, MPACT looks like a solid bet.
Good points, Mel. Thanks for sharing!
Jai Hinduja. If Price to book is greater than 1, is the REIT still under valued?
Theoretically. But certain REITs may trade under their book values for a long time, so we like to compare their P/B to their long-term average for a better picture.
Will add more during pullback
Very informative!
Glad it was helpful!
You have release videos everyday leh.
Haha thank you! We need the time to do our research for the rest of the week, so that'll be tough!