Starhill REIT dilution

For investors thinking of investing in Starhill REIT, one important information release not long ago.

Announcement

the total number of Units will increase from 1,943,023,078 Units to 2,153,218,267 Units, and
the number of CPUs will decrease from 173,062,575 CPUs to 20,334,750 CPUs;

on the distribution per Unit (“DPU”) of Starhill Global REIT for the financial year ended 31

December 2012 is a dilution of approximately 1.1% assuming that the Conversion took place on 1 January 2012;

I updated my Dividend Stock Tracker accordingly

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  • div lover

    Can I ask why you do not look at debt or preference shares also for steady income stream with reduced potential market risk?

  • http://www.productiveorganizer.com/ Kyith

    Hi, I am open to them, but when I took them up in view the risk versus reward not worth the risk.

    Preference in this case have a tendency to behave like their equities brothers

  • div lover

    would love to hear your thoughts on some as your equity/ CF analysis is so good?

    Used Singtel just as easy example the 7.375% Dec 31 Singtel bond. Currently yielding 4.11% vs 4.4% with the Equity, and the market risk is much less considering the bond being both higher in the debt structure and cpn being linked to credit rating (ie drop in credit rating is compensated with higher coupon). Obviosuly liquidty for this sort of bond is much less than the equity and pricing may be spotty so maybe not a great example, but still think some worth?

  • http://www.productiveorganizer.com/ Kyith

    I think the man reason corporate bond is not discussed is that the unit size is such that average investors cannot get invest in them

  • div lover

    yeah absolutely, a main reason I have never owned them, but I see Singtel for example is only $1,000 min piece. Olam actually has many also with 1,000 min increments as does Bumi, DBS, UOB, PSA etc.

    not trying to be cheeky at all, just really interested to hear your thoughts on these sort of yielding instruments.

  • http://www.productiveorganizer.com/ Kyith

    hmm i never knew the dinomination are so low can you be sure? or have you invested.

    Bonds are different animals in that they are affected more like recent interest rate movements, currency, default risk and quality.

    Olam as an example is a bet that they are not as bad as it seem. we will invest if there are quality like LTA, but i think the yields isnt that attractive based on how long these bonds tenure is.

  • div lover

    I was looking in Bloomberg and other bond sites. I checked with my broker and they $1000 increments are correct,

    http://em.cbonds.com/emissions/issue/25153

    Agree
    that rates, default risk, credit quality, maturity are new factors, but
    would strongly argue a consistent div paying stock/ perp should be
    valued with these parameters also.

    Happy to send through my thoughts on one of the issuance to see what you think, as comment board prob not easiest?

  • http://www.productiveorganizer.com/ Kyith

    Interesting, but these are over the counter. How can investors check what is listed and how can they purchase it?

  • div lover

    they can go through your normal broker (I just called mine to check).

    I found them on a bloomberg search, but there are other website that offer the same, jsut make sure you are searching for min piece of $1000.

    Agree that liquidity maybe an issue sometimes, but like the small cap RIETs, you would want to take that into account. If you are happy with the credit story, all this doesn’t really matter as you will just hold to maturity and get par back, while picking up the coupons.

  • http://www.productiveorganizer.com/ Kyith

    I think if its that easy, we would have heard more of it. But till now I only know you can invest in larger amount.

    The currency risk is a big factor as well.