11/2019
It was Yesterday Once More again for SREITS which announced record fund raisings and acquisitions that totaled $4.298 billion and $11.027 billion in the first 10 months of the year, surpassing the previous record of $4.386 billion and $9.0.56 billion for whole of last year.
(this article was featured on Feb 2018)
The smart SREIT investor would note that for the 1st time ever, SREITS can still surge in price after announcing discounted private placements to fund their proposed acquisitions. Indeed, such phenomenon are what we have highlighted in our REITS Quarterly and Master Classes for the past 3 decades.
It is like the song Yesterday Once More –
Every Sha-la-la-la Every Wo-o-wo-o Still shines Every shing-a-ling-a-ling That they're startin' to sing's So fine
Keppel DC Reit
When Keppel DC REIT announced its twin-acquisitions of Keppel DC Singapore 4 Data Centre for $384.9 million and 1-Net North Data Centre for $200.2 million on Mon 16th Sep and a corresponding private placement of 135 million shares and preferential offer of 141.989 million shares to raise $478.24 million, its share price rose a fabulous 31 cents or 17.22% from $1.80 to close the week at $2.11.
The private placement price was $1.744, a 2.5% discount to its VWAP of $1.7882 while the preferential offer was at $1.71, a 4.4% discount to the VWAP.
2 weeks prior, the smart SREIT investor would have been able to buy Keppel DC REIT at below $1.65!
Indeed its
Every Sha-la-la-la Every Wo-o-wo-o Still shines Every Keppel-a-DC-Reit That they're startin' to sing's So fine
Mapletree Industrial Trust, MIT
The next day, MIT announced the acquisition of 3 Hyperdata Centres and 10 Powered Data Centres for US$683.9 million and on Tue 17th Sep. They would be financed by a private placement of 176.6 million shares at the price range of $2.225 - $2.265. The private placement was very well subscribed at the top end of the range at $2.265 allowing MIT to raise $400 million.
The private placement price of $2.265 was at a 2.7% discount to its VWAP of $2.3278.
MIT price rose a fantastic 16 cents or 6.87% from $2.33 to close the week at $2.49.
2 weeks prior, the smart SREIT investor would have been able to buy MIT at below $2.20!
Again, it is
Every Sha-la-la-la Every R-E-I-T Still shines
Good SREITS can still surge in price after announcing discounted private placements to fund their proposed acquisitions
The same rallies also played out for Mapletree Commercial Trust, MCT and Mapletree Logistics Trust, MLT when they launched their respective fund raising and acquisitions in Oct 2019.
Both MCT and MLT also closed off the month with handsome gains.
Clearly, as the song Yesterday Once More goes -
Those were such happy times and not so long ago How I wondered where they'd gone But they're back again just like a long-lost friend All the songs I loved so well
Every sha-la-la-la Every wo-o-wo-o, still shines Every shing-a-ling-a-ling, that they're startin' to sing's, so fine
Clearly if you pick the right REIT for your portfolio (as what we do in our REITS classes), you will be singing and dancing.
Why do some SREITS gain in share price after announcing discounted private placements to fund acquisitions while others bombed?
As we have highlighted in our Quarterly REITS and Master Classes, investing in the MACFK reits have reaped investors steady and consistent returns for reasons that we have stressed and emphasized in our classes since we commenced teaching and educating on REITS a decade ago.
In our classes, we go into detail in examining the respective REITS key financials, skills of the management and quality of their assets and DPU outlook.
Investor students have benefited from picking the right REITS, namely Keppel DC, MIT, MCT and MLT in the past 2 months when they do their fund raising.
In the current month of November, Christmas has certainly come in early for out student investors as one of our core REIT within the MACFK family, Ascendas REIT has just announced on Fri 1 Nov, the largest rights issue in the history of SREITS, proposing to raise a staggering $1.395 billion to finance: -
-$1.285 billion of the purchase of 28 business parks and offices in the US at initial NPI yield of 6.4%,
-$289 million of the purchase of the Nucleos business park in Singapore at an initial NPI yield of 6.7% (post-transaction) and
-$91 million of the purchase of the FM Global Centre in Singapore at an initial NPI yield of 5.5% (post-transaction)
Ascendas REIT closed at $3.12 on Monday 4 Nov above its TERP of $3.0955. The smart SREIT investor would note that for good REITS like Ascendas REIT that we have handpicked in our REITS classes, such is the favorable price behavior despite the REIT announcing its Rights price at $2.63, a hefty 17% discount to its prior price of $3.17 to fund their proposed acquisitions.
All our REITS classes have been sold out for this year due to strong demand.
We look forward to keeping you updated so that you can join us for our classes next year. Like it has been for the past 3 decades, it would be profitable for our investor students.
Just like before It's yesterday once more
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