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Singapore government still don't get it huh...for land scarce singapore, still want to play property game....
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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From a corporate point of view, REITs do not pay corporate tax for their rental income provided they maintain a distribution policy exceeding 90%. So if Centurion do succeed in listing out their assets, they will reap substantial tax savings.
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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Thanks Musicwhiz and Nick.
From what I gather these 5 are the factors
1. High relative yield to other asset (with corresponding high leverage)
2. Low historical volatility (likely due to generally stable DPUs) which lead to lower discount rate
3. Tax benefits increase overall cashflows to owners
4. Gain exposure to commercial real estate classes
5. Preference for real estate
With regards to point 4 and 5 I am just wondering why developers who are often partial owners and sponsors of REITs seem to have these points working against them instead. E.g. Capitaland
Others are welcome to add more as it will definitely aid in my understanding to see which these factors are rational and how they might affect the fair value of REITs (i.e. will they tip the balance to make it over or under valued)
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Net gearing of more than 90%, is a concern...
Centurion Corp's high debt level a concern now that REIT IPO on hold
SINGAPORE (March 23): Centurion Corp ( Financial Dashboard)'s decision to put on hold a plan to float some of its properties through a REIT listing will revive concerns over its high net gearing, analysts say.
The company had engaged Barclays, United Overseas Bank ( Financial Dashboard) and UOB Kay Hian (Financial Dashboard) in January to explore a REIT IPO in Singapore, but said last Friday that it will not proceed for the time being following consultations with the Singapore Exchange, which considers the proposed exercise a so-called chain listing.
"We have constantly highlighted that Centurion’s high gearing, due to its rapid expansion, is a concern and could potentially limit or be a hindrance to its further potential expansion plans relating to new acquisitions in both workers and student accommodation segments," RHB Securities Singapore analysts Jarick Seet and Terence Wong said in a note today.
Centurion, which owns and operates dormitories for foreign workers in Singapore and Malaysia, has a net gearing of 94% at the end of last year.
...
http://www.theedgemarkets.com/sg/article...t-ipo-hold
“夏则资皮，冬则资纱，旱则资船，水则资车” - 范蠡
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23-03-2015, 07:43 PM
(This post was last modified: 23-03-2015, 08:09 PM by CCUV.)
sgx had never been comfortable with reits or business trust with very short leasehold or useful life. It is a way of the stock exchange protecting potential investors of that kind of reits or business trust from risks that come with those assets
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Post the interesting article here as Centurion has a 456 unit student accomodation in RMIT, Melbourne Victoria...
Jun 16 2015 at 2:47 PM Updated Jun 16 2015 at 8:05 PM
Student plight in finding the right home in Australia
Student Anthony Goh spent months finding suitable accommodation in Brisbane. Glenn Hunt
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by Matthew Cranston
For months commerce student Anthony Goh couldn't find the right place to live in Australia. From his home in Malaysia he searched high and low for a place to live close to the University of Queensland, in the Brisbane suburb of St Lucia.
"At first I wanted to stay at a college but they wouldn't let me stay over the summer," he said.
"I went online and searched but it was really difficult. It was expensive mostly because the [rental properties] I looked at were just students trying to rent out parts of their places."
His plight is faced by hundreds of thousands of students who are coming to be educated in Australia with its cheap currency and good standards of teaching.
After applying early in his online searches he eventually found a two bedroom double-ensuite apartment, to share with another student, at a UniLodge within the grounds of the university.
"Some of the places I looked at were really cramped and not much cheaper than what I am paying now."
Mr Goh is paying about $360 per week for his new place and hopes he can stay there for the next 18 months of his commerce course, and hopefully forever after gaining employment.
Malaysian students such as Mr Goh are the fifth largest group of students coming to Australia with 4.6 per cent of the market. China is top of the list with 29 per cent.
For UniLodge chief executive, Peter Bates, the appetite from students attracted to Australia could mean that his accommodation business will double in the next five years.
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