Reits!

UBS Dec 5 Is the S-REIT sector dying? 􀂄 Outlook We doubt it. The sector is struggling, however. It is therefore increasingly likely that 2009 will see major changes, and would benefit from being recapitalised. We believe the banks will accommodate 50% leverage in most cases, but equity investors are increasingly calling for REITs to de-leverage to around 35%. 􀂄 Equity raising potential If this was to occur over S$2.8bn would need to be raised, with the sector increasingly discounting the overhang of these potential recapitalisations by REITs including AREIT, CCT, CMT and SUN. The precedent has been set in Q4’08, with the Australian REITs having successfully raised S$4.0bn to recapitalise. 􀂄 Pricing If these equity raisings occurred they would dilute NAV (-18%) and DPU (-27%), however, as seen in Australia the removal of the equity overhang can trigger a rerating. We believe at a 16.9% CY’09 yield and -60% P/NAV the S-REIT sector is already pricing in distressed scenarios and recapitalisations for many entities. 􀂄 Key picks We continue to favour those with defensive fundamentals, including CMT, and SUN of the larger REITs and FCT, MLT and Parkway of the smaller REITs. CCT remains our least preferred.

excellent, intriguing, and cheery analysis of Cambridge Industrial Reit by the folks at ..... sgdividends.blogspot.com/search?updated-...8%3A00&max-results=3 u shld read it!

tanjm at wallstraits.com forum: Here\'s a exercise for you. Ascendas REIT has a gearing of 41%, Price/book of 0.68, and a historical yield of 13%. Cambridge Industrial REIT has a gearing of 37.6%, Price/book of 0.26 and a historical yield of 28%. If CIT were to trade at Ascendas yield, its price would be 43 cents. Assume the market is not stupid (i.e. reasonably efficient). How would you account for the difference in the market pricing of Ascendas and CIT?

Avoid ALL REITs. They have a uphill task to manage their refinancing as well as to grow the DPS. Anticipate ALL REITs to spend 2009 consolidating their balance sheets, writing down their overly valued assets and de-leveraging from over zealous acquisitions in 2007/2008. :laugh: :laugh:

UOB Kayhian today Jan 20: OVERWEIGHT REITs. Availability of credit to REITs has improved although not fully normalised. Yield spread is attractive at 10.4% above 10-year government bond yield of 1.9%, more than three standard deviations above mean. Our preferred BUYs are: Frasers Centrepoint Trust and CapitaMall Trust for retail, CapitaCommercial Trust for office, Ascendas REIT for industrial and Ascott Residence for hospitality.

4 months is such a sshort time. now REITs are the market\'s darling. Refinancing risk is lowered, the yields are irresistible... sigh people do invest in herds.