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becareful of REIT, just like buying an investment funds or unit trust, most of the time its the REIT manager that gets the most profit. Only can buy when they are trading way undervalue.

If you need exposure to property market better to buy one of the property developers

(02-06-2014, 05:06 PM)sentosaubin Wrote: [ -> ]When Jokowi wins the election and euphoria kicks in, and if LMIR goes up by 10%, i will sell this shares..

What are the implications if Jokowi wins? What (economic) reforms has he promised?

I think both are quite business friendly.


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(02-06-2014, 09:14 PM)SpeedingBullet Wrote: [ -> ]

(02-06-2014, 05:06 PM)sentosaubin Wrote: [ -> ]When Jokowi wins the election and euphoria kicks in, and if LMIR goes up by 10%, i will sell this shares..

What are the implications if Jokowi wins? What (economic) reforms has he promised?

As I say, it might be euphoria kicking in when he wins. Remember that Rupiah and Jakarta Index went up when Jokowi confirm the presidential nomination? Modi's winning India election is causing euphoria as well... This is my barometer to exit this lousy management. In future, I will ban any Lippo crony related stocks (any thing related to Riady's family, ex-SMRT CEO which joins Auric Pacific ie another Riady's related company).

I hope Riady repent and respect minority investor from now on to win shareholder's trust back

wrt Lippo Malls REIT, I have been investor since 33c share price and I have observed that they have not had any "good" acquisition from Sponsor. Unlike Capitaland related REITS where they acquire jewel Real Estate like Plaza Singapura, Lippo only acquire "lousy" malls that is near end of life. Ask anyone who is familiar with Jakarta Malls on LippoMalls underlying malls and most will tell you that they never heard of them.

For Pluit Village, LippoMalls management is playing dirty by not honouring their contract with Carrefour tenant because they want to put their own company Hypermart in the malls. After disastrous result, Lippo cowed back and give in to Carrefour. This information, do ask insider who works in carrefour indonesia and they might tell you more.

A new acquisition from LMRT

http://infopub.sgx.com/FileOpen/LMIRT_Ac...eID=314767

I have a question, in the pro forma calculation of increase of distributable income, does it have to take into consideration of the increase in finance costs the new debt to be taken?

I cannot find the footnote of their calculation, so I assume they didn't, if not it seems like a good deal to me.

Below id my write up fr my blog at sillyinvestor.blogspot.com (I moved house), comments welcomed:

A quick look at LMRT's new deal. Is it a good deal?
Some numbers first.

Total dilution assuming 40.5 cents for consideration shares and after placement of new shares (EFR shares)
= 16.7%

Improvement in NPI using 2013 numbers:
33.6 mio / 143.3 mio = 23.4%

Improvement in Distributable Income using 2013 numbers:
19 mio / 73 mio = 26%

Occupancy rate = 92.8%
Note: It is high enough number with room for improvement. It is newly opened in 2012 and if you compare this with Pluit Village record, it is being filled up quite quickly.

It is part of a integrated development by lippo, with hotels, Spa and hospitals. I think an eco-system concept is important, it is the only mall in the integrated development. Competition should be manageable since it is located in South Jakarta, which the Jakarta Mall Moratorium covers. The Infinity (Kemang Village) and
The Intercon (Kemang Village) were just completed in Q1 2014, yet the mall is already 92.8% filled, i believed when more residents move into the development, the mall attractiveness will improve.

Seems like a no-brainer good deal, since it improved it yield will improve despite dilution.
Pg 16 of announcement:



However, can we trust their calculation?

Not withstanding further weakness of currency, which is no fault of management, LMRT has put up a pro forma illustration that did not meet expectations in the past.

Next, I am trying to figure if they calculate the increase in finance cost in the projection of increase of distributable income.

Otherwise, 5% on 140 mio new loan to be taken will result in finance cost of 7 million.

Take away 7 million from 19 million, you will be left with 12 million.

Improvement in distributable income will be only 16.4% instead.

However, in conclusion, I still view this deal positive.

1) It did not seem to look like it is a dumping asset. The mall is quite attractive qualitatively f you ask me.

2) Dilution is manageable

3) It is a new management under Alvin (Very obvious dumping is taking place by past management), so perhaps we should give him a chance.

There are also 2 spanners:

1) Actual price of the placement shares. It will be at a 10 day average price prior to the completion of the deal. I hope the management keep the price stable through shares buyback and there is no black swan lurking in the corner.

2) I calculate 5% for 140 mio debt. If it is higher than that, it will be tough for the deal to be positive.

Financing cost is one of the core expenses of a reit. They have included in the announcement the assumption of the debt component ($140m) to finance the purchase consideration so I can't imagine the incremental interest cost being excluded from the proforma distributable income.

These guys seem to have a tendency to paint a rosy picture before an acquisition just to get you to vote for it

On page 13, i noted the followings:
LMIR: NPI=143M, Market Cap=$997M, NPI Yield about 14%.
LMK: NPI=34M, Total Purchase Cost=390M, NPI Yield about 9%.
At the risk of over-simplication, it seems to me the return is better to just buy back its own shares.
But obviously, REIT size matters especially when the manager fees are based on it, no?

http://www.businesstimes.com.sg/premium/...h-20140916

PUBLISHED SEPTEMBER 16, 2014
LMIR Trust to acquire Jakarta mall for 3.6 trillion rupiah
BYANITA GABRIEL
anitag@sph.com.sg @AnitaGabrielBT

LIPPO Malls Indonesia Retail Trust (LMIR Trust) plans to bulk up its portfolio by acquiring a five-storey shopping centre in southern Jakarta, Indonesia, for 3.6 trillion rupiah (S$385.7 million) which it plans to pay with cash and new units.
The acquisition of Lippo Mall Kemang (LMK) from PT Almaron Perkasa - a company incorporated in Indonesia which is 92 per cent indirectly owned by the trust's sponsor PT Lippo Karawaci - could potentially raise the trust's portfolio by 27 per cent from S$1.42 billion as at end-June to S$1.8 billion.
LMIR Trust's manager, LMIRT Management, has proposed to issue up to 301.37 million new units to PT Almaron Perkasa, which under the conditional sale and purchase agreement signed on Sept 14 will receive 3.18 trillion rupiah in cash and 420 billion rupiah in units for LMK.
The firm deemed the deal to buy LMK, which enjoyed a high occupancy rate of 93 per cent as at June this year, a "strategic acquisition of a prominent retail mall" located close to residential apartments, a hotel, a wedding chapel, a school and a country club. LMK also serves as the podium of the proposed JW Marriott Hotel, Pelita Harapan school campus, a planned hospital and three condominium towers.

Results not that great. Compared to 3Q 2013
- Gross revenue -14.9%
- NPI -16.8%
- DPU -20.7%

Exchange rate contributed to the decline, but even if you look at the results in IDR,
- Gross revenue -4.4%
- NPI -6.4%
There is an increase in property expenses and property management fee

http://infopub.sgx.com/FileOpen/2014_3Q_...eID=324312

The low IDR likely to persist, with upcoming interest rate rise next year, and the continued Indonesian current account deficit.


(vested, but not comfortable about it)