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Decided to make adjustments on the way I blog & share due to time constraints and other commitments. In the coming weeks you should see them. Short updates but more frequent & concise.

Monday, February 24, 2014

Time To Revisit mREITS (Possible Opportunity in 2014)

I finally received my 'durian runtuh' (windfall) after investing in BSDREIT since 25th August 2010 @ the purchase price of RM1.32. I have actually thoroughly researched mREITs several times and posted them:
06.2010: Investing in Real Estate: Real Estate Investment Trusts
07.2010: Malaysian REITs (Part 1)
08.2010: Malaysian REITs (Part 2 - Updated)
08.2010: MREIT: Al-Hadharah Boustead
03.2013: Which are my MREIT picks for Year 2013?

In July 2013, Boustead Holdings Sdn Bhd announced that it is going to take its REIT unit private, merge it with its plantations unit and then list the unit (new IPO), seeking economies of scale at a time when crude palm oil prices are falling. It was taken private at the price of RM2.10.
Annoucement 1: "We intend to consolidate our plantation assets under Boustead Plantations, while achieving economies of scale and business synergies in our operation."

Announcement 2: "The selective unit redemption by BREIT of all undivided interest in BREIT (“Units”) that are held by all unitholders of BREIT, other than BPB (“Entitled Unitholders of BREIT”) for RM1.94 for each Unit (“SUR Exercise”); and the special dividend of RM0.16 for each Unit that is held by the unitholders of BREIT (including BPB) as a condition to the SUR Exercise as set out in Section 1.3 (ii) above (“Special Dividend”)."

Hence a total return of almost 65% including cumulative dividends over the years. From Aboi's portfolio that's RM9000->RM15000. A very handsome profit indeed after holding it for 3 years. As such it is time to revisit this sector once again. You may read this article as well: Investment REIT attraction for long-term investors. As early preparation, a week ago I have started making two tables; [1] to track mREITs price movements [2] to monitor target price when it hits good yield.
[1] NextView customized Portfolio view - I take a look at this when I'm free

[2] i3Investor customized Portfolio view - Once the Price Diff column hits even point or minus, we reach the targeted good yield (7.5% to 8% depending on which REIT)

I have not come into any conclusion as to which mREIT I will be targeting next partly because it takes time and more importantly there is still room (one to two quarters) before opportunity kicks in (due to economies; long grandfather story), I will leave that for Part 2 and it is going to involve a decent amount of calculations and ratios so stay tuned :)

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