Tag Archives: Funds

Despite cash calls, Reits are doing well

Posted on 29 Aug 2009 | Comments Off on Despite cash calls, Reits are doing well

Out of the 18 Reits that have announced their results, 12 reported revenue growth

YET another real estate investment trust (Reit) went cap-in-hand to its shareholders this week. Fortune Reit said that it was raising HK$1.9 billion (S$354.4 million) from a one-for-one rights issue to buy three malls in Hong Kong and pay down debt.

The news was not surprising. Reits have been raising cash by the billion. In June, Starhill Global Reit raised $337.3 million through its rights issue. Unitholders of CapitaMall Trust, CapitaCommercial Trust, Ascendas Reit and Saizen Reit have together dug out $2.16 billion from their piggy banks. Frasers Commercial Trust is raising $214 million in a three-for-one issue. Owning a Reit is not cheap.

It has not been rewarding either. The Straits Times Reit Index has underperformed the benchmark Straits Times Index almost every day in the past 12 months. Despite some recovery since March, Reit returns are still some 15 per cent behind the equity index. Unit prices have been driven down by concerns over refinancing and worries that commercial or industrial rentals will not get sprightly, and that hospitality rates will remain depressed. Continue reading →

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Opportunities for investors in Asian REITs amid rebound

Posted on 28 Aug 2009 | Comments Off on Opportunities for investors in Asian REITs amid rebound

Asian real estate investment trusts (REITs) have bounced back strongly in the first half of 2009, according to a recent analyst report by property consultancy CBRE. Their total market capitalisation rose 14.3 per cent for the period.

Analysts said on Thursday this performance was driven by improving credit conditions, government support for re-financing – especially for Japan REITs (J-REITs) – and successful rights issues as recently seen for Singapore REITs (S-REITs).

Other positive signs include the fact that many large-cap Asian REITs have managed to grow their rental income recently. In Singapore, the latest financial results of several REITs have performed up to or beyond analysts’ expectations.

Frankie Lee, head of property equities, Asia, Henderson Global Investors, said: “REITs have definitely rebounded very strongly, coming out of the issues of refinancing and also the cyclical downturn in the fiscal market. I think going into the second half, there’s still potential upside because some of the REITs are actually quite financially strong now, given some of the recapitalisation that they have done. Continue reading →

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