(A) News On Tower REIT
 

5.3 sen dividend for Tower REIT ( The Star 10/2/07)

• GLM REIT Management Sdn Bhd, the manager of Tower Real Estate Investment Trust (REIT), has declared a dividend income distribution of 5.3442 sen per unit for the year ended Dec 31, 2006, to be paid to unitholders on Feb 28. 
• Net income after tax for the period was RM51.2mil, of which RM12.6mil was realised and distributable income and RM38.5mil unrealised surplus income from fair value adjustment of the investment properties.
• the distribution per unit, totalling RM12.69mil, was 10% higher that the 4.86 sen per unit forecast. This translates to an annualised yield of about 8.29% for the period between April 12 and Dec 31, 2006, based on the closing price of 91 sen as at Dec 31
• Tower REIT owns two properties in Kuala Lumpur - Menara HLA and HP Towers - whose combined value amounted to RM390mil, or 11% above acquisition cost, translating to a growth of 16 sen in net asset value per unit.
• GLM is a wholly-owned unit of GuocoLand (M) Bhd and a member of the Hong Leong
   

(B) News On Al-Hadharah Boustead REIT
Al-Hadharah Boustead REIT Opens At RM1.10 Which Is 11% premium on debut ( The Star & The Edge 2/07)

• The country’s first plantation-based Al-Hadharah Boustead REIT made a debut on Bursa Malaysia on Feb 8 with a 11% premium over its offer price.
• Boustead REIT Managers Sdn Bhd is the manager of the REIT and its chairman is Tan Sri Lodin Wok Kamaruddin.
• The REIT opened at RM1.10, an 11 sen gain over its offer price of 99 sen, with 1.17 million units done at this price. It closed at RM1.12 with 17.59 million units done.
• The Al-Hadharah Boustead REIT is structured on the principles of Islamic financing and the first REIT to be backed by plantation assets.
• Besides owning 12,680ha of oil palm estates, the REIT will use part of the proceeds to acquire two palm oil mills on a 12.7ha piece of plantation land for RM472 million, priced at a discount of 3.4% of its market value. Some RM229 million from the REIT proceeds will be used to purchase these assets.
• The REIT would increase the efficiency of the estates to between 27 and 28 tonnes per hectare from the current 25 tonnes.
• REIT’s earnings would also be boosted by the higher crude palm oil (CPO) prices, which was targeted at between RM1,800 and RM2,000 per tonne this year on strong demand in the international market.
• Its initial public offer (IPO) of 220 million units was oversubscribed by 8.02 times. There were 20,919 applications for 180.42 million units from the Malaysian public.
• For the bumiputera portion, 10,703 applications for 56.52 million units were received, representing an oversubscription of 8.42 times.

 (C)  News on AmanahRaya REIT
(i)  AmanahRaya considering injection of hotel properties into REIT (The Star 13/2/07)
According to managing director, Datuk Mohamed Azahari Kamil of AmanahRaya JMF Asset Management Sdn Bhd

• It is considering the injection of hotel properties in London and Paris into AmanahRaya real estate investment trust (REIT), AmanahRaya JMF managing director said. 
• The REIT manager was currently “looking at the valuation (of the properties) with the first injection into the REIT by the first half of 2008,. 
• The potential injection of the two overseas properties would be on top of the 11 new local properties to be added to the REIT,
• Apart from the London and Paris properties, the REIT manager was also on the lookout for assets in other parts of Europe and Australia, mainly considering city locations. 
• The REIT manager is currently identifying overseas investments in collaboration with its partners, Australia’s Macquarie Group and Switzerland-based Faisal Private Bank.
• While currently focused on the hospitality sector, the REIT was also open to overseas investments in industrial or commercial property assets
• the strong response from foreign institutional investors is due to the REIT’s BBB rating by Standard and Poor’s.
• 63% of the private placements were taken up by large foreign investors engaged in asset management, insurance and private banking. 
• On the REIT’s high gearing, the injection of new assets within the next six to nine months would bring down the figure to between 35% and 40% from close to 50% now. 
• The balloting for the public portion of the REIT of 9.2 million units, priced at 89.5 sen each, saw a more than 12 times oversubscription rate.  
• A total of 16,511 applications were received for 123 million units.
   

(ii) AmanahRaya REIT may rise to RM2b by end-2008 – The Star 13/2/07

• Looking forward to increase its REIT value to RM2 billion by end-2008, with the injection of overseas properties.
• Chief executive officer Datuk Mohamed Azahari Mohamed Kamil said the REIT would want to have a more geographically diverse portfolio to cushion the potential impact of any adversity in a particular sector or country. This will then  help the REIT towards sustaining and outperforming projected yields.
• It was “grooming” five more local properties worth RM300 million for injection into AmanahRaya REIT within the next six to nine months. The five properties will add 50 basis points to the yield and double the trust’s current value of RM336 million,
• It was seeking potential strategic partners in developing properties, both locally and abroad, in line with its strategy to grow the value of the REIT’s portfolio.
• It is currently looking at assets in the United Kingdom, Europe and Australia with the help of our partners and is expected to acquire hotels in London and Paris within the first half of next year.
• It had identified the properties and are working with partners, particularly the Holiday Villa group, to manage the hotels for the REIT
• The REIT is allowed to allocate 30% of its portfolio for overseas properties.
• At  the balloting of the retail investors portion of its initial public offering in Kuala Lumpur on Feb 13:  9.2 million shares for public subscription at 89.5 sen per unit has been oversubscribed 12.37 times after receiving a total of 16,511 applications for 122.99 million units.
• The REIT’s promoter Amanah Raya Bhd’s offer of 119.6 million units was fully taken up via private placements in Singapore, Hong Kong and Europe. Foreign institutional investors constitute approximately 63% of the total units offered under private placements
• Under its listing slated for Feb 26, AmanahRaya REIT is raising RM336 million.
• ECM Libra Avenue Securities Sdn Bhd is the principal adviser, managing underwriter and sub-placement agent while Aseambankers Malaysis Bhd is the lead manager and placement agent for institutional offering.
• Notices of allotment will be dispatched by post to all successful applicants by Feb 23.
   

(iii) Subscribe to AmanahRaya REIT, says OSK Investment Research -The Edge (9/2/07)

OSK Investment Research recommended :

• Investors should subscribe to the first government-linked company’s real estate investment trust (REIT), AmanahRaya REIT as it offers good diversification in locations and types of properties
• The mix of properties in the REIT comprising hotels, offices and factory lowers the required risk premium and value
• The portfolio of properties and strong tenancy of the REIT makes it comparable with Axis-REIT and Quill Capital Trust REIT in terms of growth strategy. Thus far, these REITs are traded at 1.25 times and 1.67 times to their respective net asset value (NAV) per unit of RM1.43 and 81 sen or 7.4% and 4.5% in gross yield.
• Hence, AmanahRaya REIT should be priced at RM1.10 to RM1.20 per unit, implying price-to-NAV of 1.15 times to 1.26 times, or initial yield of 5.4% to 5.9%
• AmanahRaya REIT has total asset size of RM336.85 million, and could grow beyond RM1 billion by 2008 given Amanah Raya Bhd’s plans to inject at least 11 other properties into the REIT.
• The potential properties earmarked are Selayang Mall, Silverbird factory, Summit office, Tamadam bonded warehouse, Kelana Centre Point, AIC factory, Bangunan Darul Ehsan, Pekeliling Business Centre and Holiday Villa Cherating.
• The market seems to price a REIT at a higher valuation premium should the REIT be committed to grow its asset size aggressively. The AmanahRaya REIT is also at properties in Australia and New Zealand through its alliance with Australia-based Macquarie (M) Sdn Bhd
• Another attractive feature is the strong tenancy, with master tenants required to provide security deposits or bank or corporate guarantee ranging from three months to three years’ average rental. Security payment will be forfeited if tenants fail to pay rental on the 7th of every month, and the owner will have rights of claim of cash flow/rental from sub-tenants in the case when the master tenants default. The tenancy of the REIT is on a triple net basis or requiring tenants to be responsible for maintenance and property expenses such as quit rent, assessment and utilities.
• while the locations of Wisma AmanahRaya, Wisma ARB, SEGi College were good, some of the other properties were located at less well-received areas, hence requiring higher investment/dividend yield as a trade-off.
• AmanahRaya REIT intends to maintain a 100% payout ratio for FY07, FY08 and FY09, and thereafter distribute at least 95% of its distributable income.
• With the aforementioned dividend payouts, the REIT is expected to deliver a gross dividend a gross dividend yield of 6.93%, 6.94% and 7.27% for FY07, FY08 and FY09 respectively.
   

(iv) AmanahRaya REIT fully taken up ( The Edge 6/2/07)

• Amanah Raya Bhd’s offer of 119.6 million units of AmanahRaya REIT (real estate investment trust) for institutional investors has been fully taken up via a private placement exercise.
• the REIT’s manager AmanahRaya-JMF Asset Management Sdn Bhd said the response from local and foreign institutional investors had surpassed the original number of units initially allocated for the institutions.
• it said the institutional investors were attracted to the unique features of the REIT, which features stable income from long-term leases, high security deposits arrangement, as well as a transparent and aggressive growth strategy to increase the asset base.
• Foreign institutional investors constitute approximately 63% of the total units offered under private placements.
• Most of the institutional investors are from Europe, Hong Kong and Singapore
   

(D) CapitaLand To Double Its REIT Portfolio By 2010

Reported in The Edge (14/2/07), Chief executive Liew Mun Leong of  CapitaLand, Southeast Asia’s biggest developer announced the following:

• it plans to double its REIT portfolio by 2010 by looking into new opportunities in China, India and Malaysia.
• the group also reported a record profit for last year
• it owns five REITS, including retail-based CapitaMall Trust and office-based CapitaCommercial Trust, with exposure to countries such as Singapore, China and Malaysia.
• the group plans to cash in on Asia’s booming property market, as the region could provide some US$400 billion (RM1.4 trillion) of REITs.
• CapitaLand, in which state investor Temasek Holdings has a 46% stake, generates about 80% of its earnings outside of Singapore.
• it would pay S$41 million (RM93.32 million) for a 13% stake in Japanese property trust BLife Investment Corp, making it the biggest shareholder.
• CapitaLand posted a near five-fold surge in fourth-quarter net profit on Feb 14, beating expectations and helped by bumper home sales in Singapore and a write-back from asset revaluations.
• The group posted record profit in the full year of S$1.02 billion, up 35.6% from 2005.
• The developer said fourth-quarter net profit surged 389% to S$455.82 million, from S$93.18 million in the same period the previous year. The result beat the S$101.9 million fourth-quarter profit forecast by Reuters Estimates.
• Assets under its management are expected to reach S$18 billion by the end of 2007, up from S$14.3 billion in 2006.
• The developer reaped a gain of S$163.8 million from the divestment of its Chinese shopping malls into another REIT, CapitaRetail China Trust. That was listed in December with a portfolio of seven malls valued at S$690 million.

Which Is11% premium on debut ( The Star & The Edge 2/07)

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