Monday, December 7, 2009

Hektar REIT in talks to buy new assets


By Chong Pooi KoonPublished: 2009/12/07

Most of the potential acquisitions are located in Peninsular Malaysia, says Hektar Asset Management chairman

Hektar Real Estate Investment Trust (REIT), an investor in shopping malls, says it is in talks to buy new assets and plans to sell more units to fund future purchases.

"We are in the midst of negotiating for new acquisitions, but cannot divulge any more details at this time," Hektar Asset Management Sdn Bhd chairman and chief executive officer Datuk Jaafar Abdul Hamid told Business Times in an interview.

Most of the potential buys are located in Peninsular Malaysia, he said, adding that it was in talks with township developers and other asset managers.

"The typical shopping acquisition is quite significant, starting from RM100 million and above, and will definitely require us to raise equity-financing to place that acquisition in the REIT."

While there was no firm plan yet to place out additional units, Jaafar said he was pleased that the capital markets had rebounded substantially in the past few months.

"Hopefully the timing would be conducive (for us to sell new units) when we close any acquisitions," he said.

Units of Hektar REIT have risen 36 per cent this year to end-November, but still trails the 44 per cent gain in the benchmark FTSE Bursa Malaysia KLCI in that period.

Hektar REIT owns the Subang Parade shopping centre in Subang Jaya, Selangor; Mahkota Parade in Malacca; and Wetex Parade in Muar, Johor. The fund's gearing ratio was 41 per cent as at end-June, quite close to the 50 per cent limit set by the regulator for a REIT.

Although a unit placement exercise will pare down its gearing and raise more cash for potential acquisitions, Jaafar said it was careful not to dilute the dividends received by existing unitholders.

"We believe it is important to deliver steady growth in the form of dividends to our unit-holders. We hope to establish a track record as an asset manager that delivers stable returns. So if we were to do a placement, it would be to acquire productive assets which would support the REIT's income and dividend growth."

While rival Axis REIT has garnered more investor attention after converting into an Islamic REIT, Jaafar said that Hektar had no plans to follow in Axis' footstep.

"We have studied the Islamic REIT model since before our initial public offering and will continue to monitor the feasibility of the model," he said.

"(But) we realised it was not a simple proposition for retail properties because it meant that we would eventually, over time, have to eliminate various types of tenants, such as conventional banks, conventional insurance branches, health clubs, cinema, to name a few.

"This is a challenge, especially for a shopping centre, to remain relevant without these amenities for consumers."

44 comments:

Anonymous said...

Bought more Axiata at 3.02

horse said...

I received my Atrium dividend. :)

Anonymous said...

horse

Everytime received dividend is just as good as like reward bonus from your consistent buisness partner/rental income/incentive from job, are an extra income derived from your resource money earnning money. T

his is an consistent passive income at one time cost of investment; my ulitmate goals of living wih financial freedom

horse said...

hng,
Have to opt for earning dividends for now, as trading is almost out of my thought because just cant afford the time in office.

Any how earning from dividend & share appreciation also quite a happy and rewarding approach as my target set is not very high, it is about 10% to 20% p.a...

Anonymous said...

Core portfolio
Protasco 52.4%
Hingyap 40.7%
Lonbisc 16.8%
Crestbld 4.2%


Trading portfolio
Axiata 32%
TM 16.5%

Anonymous said...

horse

Return of minimum 10% from dividend should have no problem at all + 5-10% capital appreciation will just match your desire target return

horse said...

ya, i guess so, earning 10% pa is not difficult. Picking the right stocks is something that need more work here & this is it, you sit tight and slowly reap what you sow..

小偉 said...

The gearing is very high and they still want to buy asset? Got problem or not?

horse said...

Greenleaf,

Their business based on rental income, to increase shareholder value somehow need to buy more assets. This is nature of REIT. If gearing high, might need longer term to pay back but it could be a fruitful turnout in long run. Just like us paying 20 to 30 years loan to our house.... :(

Anonymous said...

Bought more Axiata at 3.03

horse said...

Received my Amfirst dividend as well.. :)

horse said...

Received my Hektar dividend as well.... :)

horse said...

Volume has shrunk a lot :(

Anonymous said...

Core portfolio
Protasco 52.4%
Hingyap 40.7%
Lonbisc 16.8%
Crestbld 3.9%


Trading portfolio
Axiata 41%
TM 16.5%

horse said...

hng,
Not much tradings today huh...

I just briefly run through some of the counters you purchased, some have very nice run up. If you were to adopt buy & hold with volume strike on few counters not sure this will bring you even more profits. Just to name few HLB, Tanjong, GAB....next probably is AXIATA... :)

horse said...

klse computer glitch ??

Anonymous said...

Its vendor for most of bank (affecting pbbank, hlbank etc) that cause problem. Bursa and other investment banking have no problem at all. Trnasaction go as normal even can't display on the screen. Noe the problem already rectify

Anonymous said...

Bought maximum Axiata a 3.01

horse said...

hng,
seem like u have full confident on Axiata...
I would say is quite safe at current price now. I migth consider buying as well.

Anonymous said...

Axiata is my current biggest stock in trading portfolio. I rely high hope on its rebound :)

Portfolio already full, take sideline position.


Core portfolio
Protasco 52.4%
Hingyap 40.7%
Lonbisc 16.8%
Crestbld 3.9%


Trading portfolio
Axiata 115%
TM 16.5%

horse said...

Basing your percentage, your margin line have go above 240%.
Wow, the power of leveraging...

horse said...

Damn boring market. :(

Anonymous said...

leveraging is my extra-bullet to capitalize on trading oppurtunity. So long the stock are liquid, there should no problem and can wait for stock to rebound and exit. Of course, have to set cut loss level to protect capital.

horse, have you buyback your Citi? Citi trade at 3.85-4.05 last night. You can repeat similar strategy, targeting 10% return and reap handsome profit again :) I'm seriously thinking to venture to US market next yr.

horse said...

Not yet, will target to buy C below 3.80 if possible. Hope US market can fall further tonight. Will monitor closely.

Anonymous said...

Sold back today Axiata at 3.03, realize few hundred intraday gain :)

Anonymous said...

Not yet? i thought Citi has surpass your target sell at US4.30 before.

Anonymous said...

bought Bjtoto at 4.18

horse said...

yes, C touches above 4.30.
I decide to hold for a while and it slide back. :(
Might increase my stake when it fall further.

Mkt seem lossing steam. :(

Anonymous said...

bought GENM at 2.79

Anonymous said...

sold partial GENM at 2.82....

bought TM at 2.97

Anonymous said...

sold off all GENM at 2.82, realize few hundred intraday gain :)

Anonymous said...

bought more bjtoto at 4.18

Anonymous said...

bought GENM at 2.80

horse said...

everything closed off low.. :(

Anonymous said...

Sold off today TM at 2.99, realize small intraday gain.

Unable to make intraday trade on Bjtoto and second round GENM.


Core portfolio
Protasco 52.4%
Hingyap 40.7%
Lonbisc 16.8%
Crestbld 3.9%


Trading portfolio
Axiata 41%
TM 16.5%
GENM 15%
Bjtoto 15%

Anonymous said...

Index close have been down lowest in a day in last 3 consecutive day due to last min selling pressure.

Anonymous said...

bought ioi corp at 5.37

Anonymous said...

Investor displeasure over GenM RPTs


INVESTORS tend to dislike related-party transactions (RPT), so when Genting Malaysia Bhd (GenM) (3182) announced its latest RPTs - exactly a year after its last one sent the stock tumbling - more than a few eyebrows were raised.

This time, the casino-and-hotel operator plans to buy two firms which own properties in Kuala Lumpur - 25-storey Wisma Genting office building for RM259.6m (including RM46.9m debt owed to Genting Berhad) ; and
b) Segambut land comprising 2 adjoining land parcels with total area of 380,906 sq ft for
RM24.6m (including RM8.6m debt owed to Genting Berhad

It will not need to get the go-ahead from shareholders or regulators for these purchases as the price does not exceed 5 per cent of its shareholder funds.

Given this, and in the spirit of good corporate governance, the onus should have been on GenM to provide enough information to assure its shareholders, especially minority ones, that the deal is fair and in the best interest of all. It needed to explain this well to shareholders as, otherwise, the deal might be seen simply as a convenient way to inject cash into the parent. Technically, the move actually provides good yields to Genting Malaysia. But that is not the point or the major concern - if its good for one party, it must be not so good for the other party. Questions will surface as to why Genting Malaysia is being used to keep properties and land, is that a long term strategy to accumulate properties or a slipshod move, neither here nor there. Why is Genting Berhad hiving off assets, is that a long term strategy to be purely gaming


A year ago, when GenM made a more controversial decision to pay RM250 million for loss-making start-up firm Walker Digital in another RPT, the stock lost almost 15 per cent of its market value over two days.

However, history has shown that RPTs are not always shunned by investors. Shares of Carlsberg Brewery Malaysia Bhd, for example, rose sharply for three straight days after it said in July that it wanted to buy a Singapore firm for RM370 million in an RPT.

Analysts said it had done a "superb" job at explaining why the deal was good. Three months later, shareholders gave the thumbs up for the deal to go through.

GenM's repeated RPT transactions have only served to raise more doubts over how it will use its sizeable cash balance of RM5.2 billion.

Keith Wee, an analyst at OSK Research, has cut his recommendation on GenM's stock to "neutral", partly because of concern that there could be more RPTs in the pipeline. Going by listing rules, GenM can undertake more RPTs of up to RM214 million over the next 12 months without getting shareholder approval, he noted.

So, unless the Genting group can step up and be more proactive in explaining how it intends to spend its cash pile to dividend-hungry shareholders, the fear of potentially more RPTs will continue to dampen sentiment on its stocks.

Anonymous said...

Sold off all TM at 3.01, realize one time transaction cost loss

horse said...

Certainly, if GenM keep pressing on more RPTs in future. It share price will definitely being bashed down further. This kind of act is to benefit only one party which is GEN Bhd. To the minority a very displeasure one :(
Most of us only aim for dividends & appreciation, if both of these can;t be fulfilled, what the point of holding on. Dispose is the only right way to do. Nevertheless, i still take the chance to see further what is the managment of GENM want to do with the cash pile...

Anonymous said...

bought bjtoto at 4.16

Anonymous said...

Sold off all bjtoto at 4.19-4.20; ioicorp at 5.41, realize few hundred intraday gain :)

Sold also some Hingyap at 1.18; cresbld at 75sen, protasco at 96.5-97sen, realize more paper profit



Core portfolio
Protasco 49.3%
Hingyap 34.2%
Lonbisc 16.8%
Crestbld 2.2%

Trading portfolio
Axiata 41%
GENM 15%
Bjtoto 15%

Anonymous said...

Both Genting and GENM rebound in last min by market maker... Although RPT seem unwelcome and deter market sentiment, but due to their bluechip and big cap status, market unlikely to just ignore these two gaming counter.

Anonymous said...

The management seem more keen to extract cash from GENM through more RPT instead of opt for special dividend /capital repayment to all shareholder. Unfair treatment to minority shareholder!

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