I would not buy into retail reits or office reits. More and more people are shopping online or work from home But hospital reit like alaqar will be ok.Doctors need to see patients in clinics. And they need operation rooms to do surgeries
The only 1 critical factor we shall look into it seriously for AL-AQAR HEALTHCARE REIT is KPJ business growth. As long as KPJ operation profitable and expansion growth positive, this is very low risk and guarantee rental income.
Covid 19 is not go to ALAQAR hospital ya , all go to government hospital
some try to mislead newbie, by potray Covid 19 will beneficial to ALAQAR
In i can say is not to little effect , as the KPJ hospital is still allow to open under MCO due to under necessary activities so the rental still come in
just for KPJ business, there will be less medical tourism already for them and this does not affect to ALAQAR rent
I refer to the matter of AL-`AQAR HEALTHCARE REIT ("AL-`AQAR" OR "REIT") PROPOSED LEASE RENEWAL https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3159692 2.4.4 Rental formula for rental amount on pages 5 to 8. For information, the agreed yield of 5.75% and the 200 BPS in the rent formula for the next contractual term under the Proposed Lease Renewal differ from that included in the rent rental formula under the previous Principal Lease Agreements primarily due to, amongst others, the interest rate environment. The 3-month Kuala Lumpur Interbank Offered Rate (“KLIBOR”) on 30 June 2006 was 3.92% as compared to 1.94% as at LPD (Source: Bloomberg). In addition,the spread under the rent review formula is now proposed at 200 BPS as compared to 238 BPS after taking into consideration, inter-alia, the improved financial standing of KPJ Group over the years. As at LPD, KPJ is a RM4.4billion (30 June 2006: RM323.7million) market capitalisation company with revenue of RM2.4 billion for FY 31 December 2020
My concerns are as follows:
1/ Whilst there is minimum rental protection, however the increase in rental is capped at only 2% regardless of the market value of the property or the 10 year MGS rate. The board's and MainStreet independent advisor report talks about the drop in KLIBOR however they did not consider the scenario where 10 year MGS rate goes back up towards 4.2% and subsequently increases ALAQAR's financing cost significantly. This proposal pushes the interest rate risk to ALAQAR for the next 15 years. How is it fair that the increase in rental be capped to 2% irrespective of the 10 year MGS rate on rental review years ?
2/ On page 18 section 5.3 of the circular, the new terms will effect an initial rental reduction of RM1,543,000 in the first year. The evidence of improved financial standing of KPJ is not convincing. This company's FY2020 is gearing is 67%. YTLREIT arranged a rental deferment and intends to pay back the arrears from 2022 onwards however in 2020 KPJ asked for a rental rebate during MCO 1.0 from ALAQAR. ALAQAR agreed instead of asking rental deferment.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
RainT
8,448 posts
Posted by RainT > 2020-02-06 14:52 | Report Abuse
because if u bought at peak price then also very hard
your dividend yield will drop if your costs price is at peak