In my quest for yield, a reit that caught my eye again is Saizen Reit. What's interesting is the recent softening of it's price due to the depreciation of the Yen mainly. 6 cents move is a year dividend ... oh a little pain..
Few questions come into my mind. Is there opportunity to gain/recover from this ?
Impact to S$ returns
"Hedged the distribution payments for the six-month financial period ending 31 December 2014 and for the six-month financial period ending 30 June 2015 at JPY81.9/S$ and JPY85.6/S$ respectively."
This hedging is rather important though not cheap. Looks like they did it well considering rate is about 91 currently. I do not see dividend issue for Mar'15.
Property Yield
About 1/4 of the portfolio in Sapporo: Prices known to increase in that area but Cap Rate maybe mute.
Age of the Reit properties are not young so i would perceive rental yield stable considering the net property income in last report shows slight decrease in JPY Q/Q not proportional to Revenue decrease.
S$- denominated bank balances help a little from the Warrant proceeds leftover.
Trend
Revenue has been decreasing about 2% quarterly. Operating expenses increased slightly from the net property income of lQ'15 report.
"The decrease in gross revenue was due mainly to a year-on-year decrease in occupancy rates."
Leverage Potential
Ability to access low fixed loan rate is a plus for higher leverage considering their returns are relatively stable.
Moving Forward
One thing to watch is the the weekend election and what this means to Saizen. Abe wins mean more weakening of the Yen therefore more hedging needed. Delay in consumption tax hike is good news.
Cory
14th Dec 2014
Few questions come into my mind. Is there opportunity to gain/recover from this ?
Impact to S$ returns
"Hedged the distribution payments for the six-month financial period ending 31 December 2014 and for the six-month financial period ending 30 June 2015 at JPY81.9/S$ and JPY85.6/S$ respectively."
This hedging is rather important though not cheap. Looks like they did it well considering rate is about 91 currently. I do not see dividend issue for Mar'15.
Property Yield
About 1/4 of the portfolio in Sapporo: Prices known to increase in that area but Cap Rate maybe mute.
Age of the Reit properties are not young so i would perceive rental yield stable considering the net property income in last report shows slight decrease in JPY Q/Q not proportional to Revenue decrease.
S$- denominated bank balances help a little from the Warrant proceeds leftover.
Trend
Revenue has been decreasing about 2% quarterly. Operating expenses increased slightly from the net property income of lQ'15 report.
"The decrease in gross revenue was due mainly to a year-on-year decrease in occupancy rates."
Leverage Potential
Ability to access low fixed loan rate is a plus for higher leverage considering their returns are relatively stable.
Moving Forward
One thing to watch is the the weekend election and what this means to Saizen. Abe wins mean more weakening of the Yen therefore more hedging needed. Delay in consumption tax hike is good news.
Cory
14th Dec 2014
