KOREReitUSD    Last:0.182    +0.003

Kep-KBS Reit

Price has dived to a low of USD0.810,... amy opinions please, forummers ? Another Turkey effect ?

I recalled it has already started falling even before the Turkey problem was upon us,....

 

https://www.theedgesingapore.com/kbs-realty-said-be-considering-us1-bil-reit-ipo-singapore?utm_source=Singapore+Market+Report& utm_campaign=ef425f9fd3-EMAIL_CAMPAIGN_2018_07_26_10_10& utm_medium=email& utm_term=0_46b7beec93-ef425f9fd3-92358833

Wondering why is KBS starting another REIT when it already has one with Keppel ? Why can' t the existing REIT with Keppel Corp absorb the rest of the properties under KBS ?
 

 

Happy with the results last evening,... exceeded my expectations of the dpu payout,....

And I would think the mkt is happy too, for the unit price  went up from 0.865 close yesterday to close today at 0.880,...

Glad I ' transferred' my USDs from Manulife US REIT to this one ! Let' s observe MUST' s results in August,...

 

Results Highlights

- Higher net property income supported by overall rental growth, lower property expenses, and a one-off compensation income
- Distribution per Unit (DPU) of 3.82 US cents above IPO forecast of 3.80 US cents, translating to an annualised distribution yield of 6.77%
- Proactive leasing efforts with 32 new leases signed in 2Q 2018 with reputable tenants, improving committed portfolio occupancy rate to 90.3% as at 30 June 2018 -- Actively pursuing accretive acquisitions in key growth markets to expand portfolio and capture upsides in the market 

 

http://infopub.sgx.com/FileOpen/KORE%201Q18%20Results.ashx?App=Announcement& FileID=499492

The gearing level is only at 33.6%, not 36%. As they said :-

" As at 31 March 2018, the REIT had an aggregate leverage of 33.6%, providing headroom to acquire quality yield?]accretive assets. All?]in average borrowing costs were 3.40%, and the REIT&rsquo s borrowings are entirely in USD, providing a natural hedge for its income and investments."

The total asset size is below $1B. This is considered small, and may not be able to get some better deals, eg loan interest rates for their drawdowns. As of March 31st. this year, their asset size amounts to ONLY $809M. They need to stretch another 20% to reach $1B. REITs today needed at least an asset size of $1B in order to be able to ' compete' in the mktplace.

Currennt nav is 88 US Cts. It is trading at only 1x to book value. This goes to show that investors are really not confident to want to buy at anything higher than its book value.

With all the above, and especially the mention that there is still available headroom for it to buy more assets, I would think the mgr is looking around to now to fulfill an acquisition. Otherwise, this REIT will not be able to compete with other REITs for investors,... due to low asset size and mgr inactivity.
 

SimpleTrade      ( Date: 04-Jun-2018 13:24) Posted: I guess the decision to more acquistions very depends on the mgt and sponsor. If the sponsor has huge pipeline of assets waiting to offload or mgr aggressive, then you will see more actions. Has kbs reit obtained a credit rating yet? Also， i heard investment fund will only consider buying if the reit asset size > 1 billion, not sure true or not.

 

I guess the decision to more acquistions very depends on the mgt and sponsor. If the sponsor has huge pipeline of assets waiting to offload or mgr aggressive, then you will see more actions.

Has kbs reit obtained a credit rating yet? Also， i heard investment fund will only consider buying if the reit asset size > 1 billion, not sure true or not.

 

Okay bro,... hmm,... if it' s going to go on liek this, then what that will happen is this REIT will be disadvantaged by its size. Today, REITs are all rushing to incarese their AUM due to the many advantages that can be reaped from a bigger REIT with a big asset size.

SimpleTrade      ( Date: 03-Jun-2018 20:32) Posted: What you mentioned is the SOP, however in actual not easy to achieve or satisfy all parties. Manulife reit is a very good example. Thats why i say it is better (not necessary) to start with lower debt. At the first 2 rounds can utilise the bank loan

 

What you mentioned is the SOP, however in actual not easy to achieve or satisfy all parties. Manulife reit is a very good example.

Thats why i say it is better (not necessary) to start with lower debt. At the first 2 rounds can utilise the bank loan

 

I hear ur opinions, bro,... yeah,...but still, I believe the right combination of Equity Fund Raising using Units and Loan Drawdown should be able to give unitholders the best balance between dpu-accretiveness and REIT gearing level.

SimpleTrade      ( Date: 02-Jun-2018 10:53) Posted: Subject to diff people opinions, to me i think for a newly listed reit Kbs reit gearing is considered as above average. Yes, pte placement or rights issue can be done , but at the expense of diluting retail investors shareholding. If not handle properly, may have very bad conseq to the npi /dpu , and subsquently the share price. At this turbulence tines, maybe the best is. do nothhing, focus on streamlining their properties mgt process, reduce operating costs.

 

Subject to diff people opinions, to me i think for a newly listed reit Kbs reit gearing is considered as above average.

Yes, pte placement or rights issue can be done , but at the expense of diluting retail investors shareholding. If not handle properly, may have very bad conseq to the npi /dpu , and subsquently the share price.

At this turbulence tines, maybe the best is. do nothhing, focus on streamlining their properties mgt process, reduce operating costs.

 

At 36% now before any acquisition,... is this too high, bro ?? I think can easily be pushed down to 30% after a Rights Issue or Private Placement. Being from the Keppel Group,... shouldn' t have any problems if finding suitors to do placements.

 

High gearing ratio from the start

 

Kep-KBS USR has hit its ALL TIME LOW today, and USD 0.875. I beieve it must soon come up with an acquisition ann' t for it to maintain its share price performance. It has been a few months since listing, but it has not been able to identify any opportunities for asset acquisition till today. Wondering what the problem is here,....

 

http://infopub.sgx.com/FileOpen/KORE%201Q18%20Results.ashx?App=Announcement& FileID=499492

As above,...First Quarterly Result published since listing,.... At first glance, things looks good, but as we read down the report, we see that the good turnout from the  Net Property Income (NPI)  is because of the collection of a one-off USD1Mil from a tenant who terminated earlier on Feb 28th., 2018. This is a ONE-OFF ! Without the one-off, the  NPI would be in-line with the forecast made during IPO.

Then : The Distributable Income would be LOWER than the IPO forecast,... assuming all other metrics stand,...

Then, a simple approximate calculation for the dpu would be : 2.20 US Cts per unit generated for thiese five months (since Listing on 9.11.2018). Apportioned out, would be 5.28 US Cts for this FY. And yield would be : 5.28 US Cts divided by 88.5 US Cts = 6.00 %.

Does not seem to be  a good start for Keppel-KBS REIT : not long after listing, a tenant gave early notice to move-out !!!!!!!

 

Included #Keppel-KBSREIT into the Singapore REIT comparison table.
http://mystocksinvesting.com/singapore-reits/singapore-reit-fundamental-analysis-comparison-table-1-jan-2018/

 

The inst players may push the share up to 90cts. 

 

Open at 0.895 usd , trading at 0.885 currently. 

 

https://www.bloomberg.com/news/articles/2017-11-01/fed-signals-december-hike-on-track-as-trump-weighs-next-chair

 

Local IPO is 6.7 times over-subscribed. Not bad given it is a US$ counter. Private tranche is also over-whelming over-subscribed. Let' s hope it performs on debut.

 

Kep - KBS reit (USD). Starts trading today 9 nov 2pm.