sellJust visited many of shopping malls owned by Hektar. Find many tenants move out. Sign of bad economy?
sellThere are too many shopping malls nowadays. Landlord cannot bargain to raise rental easily. Tenants can move out if not happy. TP RM 1 coming soon.
cynachenTotal of 134 tenants rental expiring FY2015. % of monthly total rental income affected will be 32%, with NLA % affected at 41%. That's almost half of total NLA. Let's see if Hektar can find new tenants or not. With Da Men opening soon (Nov 2015), I foresee drop in income for the next year.
gforce2Parkson> If you actually took the time to scan through the Q4 Results, it shows Fair value adjustment of investment properties of (-RM39,933,986). As you know, the market conditions have put a damper on property values, and that is reflected in the revised NAV of the share, and the Q4 Results. It is a paper loss, not a cashflow loss.
Cashflow is stable: this is probably one of the few REITs that has consistently delivered stable dividends of above 10sen Y-o-Y without fail since 2007. (Currently at 10.5 sen for the FY2015.)
Possible concerns: 1. Borrowings have increased due to a property acquisition (Mahkota Parade individual lot). 2. Some Material Litigation regarding Mahkota Parade. 3. Slowing consumer demand in 2016.
Parkson5121 HEKTAR HEKTAR REITS Quarterly Rpt for the Financial Period Ended 31/12/2015 (Amended)
Current Year Quarter Preceding Year Corresponding Quarter Current Year to Date Preceding Year Corresponding Period 31/12/2015 31/12/2014 31/12/2015 31/12/2014 RM '000 RM '000 RM '000 RM '000 1 Revenue 31,931 30,828 125,511 121,991 2 Profit/Loss Before Tax (28,918) 17,576 4,759 50,387 3 Profit/Loss After Tax and Minority Interest (28,918) 17,576 4,759 50,387 4 Net Profit/Loss For The Period (28,918) 17,576 4,759 50,387 5 Basic Earnings/Loss Per Shares (sen) (7.22) 4.39 1.19 12.58 6 Dividend Per Share (sen) 2.70 2.70 10.50 10.50 As At End of Current Quarter As At Preceding Financial Year End 7 Net Tangible Assets Per Share (RM) 1.4586 1.5518
ParksonLoss of 7.22 sen. A loss is still a loss. Why pay RM 1.52 for loss making company? 40 sen is fair value. http://www.bursamalaysia.com/market/listed-companies/company-announcements/5001177
gforce2Parkson> Take a simple analogy: You buy a house for RM1 million, and rent it out at RM60k / year. You do a revaluation of your property the next year, and find that it is only worth RM940k on the open market. But, you're still able to rent it out at RM60k / year.
Do you sell? Is it a loss-making asset? Of course not. On paper, you might have lost money... but it's generating positive rental income every year.
ParksonWhen Festival Mall Melaka open Hektar Mahkota Parade will sink like Titanic ship.
(Page 8) MOVING FORWARD INTO 2016 We expect 2016 to be Hektar REIT’s toughest year over its 10-year history. To reiterate, the oil crisis, the currency crisis, mass layoffs and hike in interest rates from the implementation of Bank Negara’s Basel III are not doing Hektar REIT and retailers any favours. The retail outlook in 2016 is very lacklustre and retailers continue to be skittish. A significant number of our loyal retailers are seeking our support to reduce their rent until the tide is turned. These are not fly-by-night retailers. They have been with us for many years and have never objected to rent increases before. I feel it is now time for us to demonstrate our loyalty to them during this extremely trying period. Bear in mind though, that by acceding to these rent reduction, Hektar REIT may experience dips in revenue in 2016. However, every cloud has a silver lining. We now expect more opportunities for acquisition as we are now in a better position to negotiate with vendors, who we feel are more willing to accept our high-yield requirement.
In the recent 2015 Annual Report, The Chairman/CEO acknowledges the tough economic climate, and cautions investors on possible dips in revenue in 2016. However, he also sees possible opportunities for acquisitions. It is possible that HEKTAR might look to issue new shares in the near future to fund future property acquisitions, as well as reduce gearing levels (currently at 44%).
There are also quite a few property tenancies expiring this year (37% by rental income). So, let's assume a worst case scenario: a negative rental reversion of about 10%, meaning a drop of about 3.7% in revenue, from RM125.5m to RM120.8m (less RM4.7m). 2015 Property expenses: RM49m 2015 Other expenses (manager fees, loan interest, etc) RM32.5m Realised income in 2015 was about RM44.6m, so a drop of RM4.7m means est. realised income of RM39.9m, Divided by 400m shares. Assuming they pay out 95% as dividend, that works out to 9.5 sen per share, which is still a 6.3% DY at the current share price.
Overall, still a decent defensive stock for the medium to long-term. I will probably look to accumulate this stock if it drops below RM1.40
xncziyi44best reits but trouble is lease getting more n more expensive to bussinesses in malls hence many unable to make business viable so many change n disruption in most malls. wonder if reits may suffer so much from these uncertainty. also many malls planning to open soon esp in major towns. would prefer to stay off reits for next few years .happy investings.
gforce2Proposed rights issue to fund the purchase of 1Segamat in Johor.
2.4 Source of funding: For illustrative purposes, assuming the Intended Gross Proceeds raised is RM74.8 million, the Purchase Consideration will be fully satisfied via the net proceeds from the Proposed Rights Issue of RM71.2 million and bank borrowings of RM32.8 million.
CFTraderAs an outsider without holding any HEKTAR nor any intention to accumulate HEKTAR, I can share with you my view on CS AEI in SP.
I can tell you CS AEI is a success project. I project CS rental will be going up in line with inflation with the new introduction of MBO Cinema and the sole only McD outlet in SP. Plus, the crowd going for CS and AJM is a totally different type of crowd, AJM croud is usually mostly groceries, while CS is mostly for lepak-ing. With the xchange of HBLED instead of the old yellow bulb, its looks more invigorating rather than the place that gather those "la-la-zai"
Parkson6 months free rental Hektar business so bad? Better wait RM 1.2/1 then. http://www.thestar.com.my/business/business-news/2016/08/02/hektar-reit-posts-12-drop-in-net-profit/
Posted by ks55 > Aug 2, 2016 10:14 PM | Report Abuse
I came to understand Parkson Subang Parade is closing down in Dec 2016. Hektar offers 6 months rental free to take over retail space presently occupied by Parkson......
CFTraderstop talking about the past, focus on the future and project their earning. ks55.
CFTraderWhy you keep on focusing on attacking PARKSON for like ... 1/2 year ??? It doesn't give you any benefit, don't it ?
Unless you have personal bet / personal Put warrant PARKSON with the IB....
grew over it.
CUTLOSSFirst ever time see Subang Parade give free rental. Business must be very bad. Better cut loss now. Wait RM 1. http://www.thestar.com.my/business/business-news/2016/08/02/hektar-reit-posts-12-drop-in-net-profit/
CUTLOSSSo many empty malls nowadays why must shop owners rent at old mall like Subang Parade?
CUTLOSSOld mall-escalator/lift malfunction so likelihood of accidents higher.
idunworkCutloss you sound like a retail reit expert. People like hektar bcos it constantly pays good dividend.
Parkson2 giant malls to open in Cheras http://www.thestar.com.my/business/business-news/2016/08/06/2-giant-malls-to-open-in-cheras/
Parksonhttp://www.thestar.com.my/business/business-news/2016/08/06/2-giant-malls-to-open-in-cheras/ So how can Subang Parade old mall to compete with new malls?
If no one take up free rental perhaps Subang Parade must up for sale. Subang Parade is biggest mall(in value) owned by Hektar.
ParksonJust close it and move to Sunway Velocity. Losing is IOI not getting rental.
Posted by ks55 > Aug 6, 2016 06:50 PM | Report Abuse
Even Parkson Stall in IOI City Mall cannot attract customer, even though IOI City Mall is full of people during week ends.
Go and see for yourself...........
ParksonClosing down an un profitable outlet is easier than selling whole shopping mall when it gets empty. If you go to Penang One Stop is one example of abandoned shopping mall despite 20 years ago business is very good there.
Low Shen-CheangTo Parkson, any mall if badly managed will fail, and mall build with individual lots for sale are difficult if not impossible to manage. Those fail malls you mentioned fall into this category.
Patrick LingWhen will they announce the renounceable rights issues?
Yippy68Subang parade ...look bad. I hope it won't be like mqreit..drop like waterfall after x dated...kn
smartlyproposed right issue !!! better run fast fast..
Patrick LingI am staying to buy the right issues. When are they announcing it?
remusSo this why Hektar is flying recently? --> 10-Oct-2016 Hektar REIT buys Johor shopping centre for $24.07 million from Ecofirst Consolidated Read more at: http://www.dealstreetasia.com/stories/55061-55061/
gforce2It's actually quite old news (June 2016). We'll have to wait for Ecofirst to have their AGM (25 Oct) to approve the transaction. The wild fluctuations could be due to the fact that more than 71% of the shares are privately held by the major shareholders, and the relatively low daily volumes.
investabc1.68 was done last quater before ex dividend. Hektar is still good value when compared with other retail reits.
Yippy68I sold off hektar as I feel 1.66 is the peak, it will comeback to 1.50 level in dec when parkson close down. Moviing to Mqreit, better yield and great potential as most premises are 100 % rented out.
UndefeatedOnce the acquisition of 1 Segamat completed, foresee the share price to rise to 1.80 level where the yield squeeze to Pavreit and Sunreit level. This is the best REIT in Malaysia with steady yield.