apalalu > Other stocks deduct 25% corporate tax (2015), before dividend is distributed.
REITs are structured differently, to be more tax efficient, as long as they distribute at least 90% of net income/profit to shareholders, with 10% as a withholding tax.
Net property income was RM15.7 million against the Estimate Period 2015 of RM19.9 million, difference by 21.3% or RM4.2 million.
The lesser gross revenue and net property income as compared to Estimate Period 2015 was primarily due to the fact that the Estimate Period 2015 was prepared on the assumption that the completion of Phase 2 Acquisition will be on 1 September 2015, but the actual completion of Phase 2 Acquisition was on 29 September 2015 and 30 September 2015 instead.
As such, the variance on the actual performance of fund as well as the properties against the Estimate Period 2015 is mainly due to the timing differences as FP2015 incorporates 3 months financial results of Phase 2 Acquisition whilst the Estimate Period 2015 had assumed 4 months financial results.
In addition, the late opening of outlets by certain tenants for the period under review, also contributed to the slightly lesser revenue for KOMTAR JBCC as against the Estimate Period 2015. The slight delay in the opening of the outlets by the tenants reflects the cautiously optimistic approach of the retailers in view of the challenging economy ahead.
Save for the timing difference due to Phase 2 Acquisition, income for the 22 KFC and/or Pizza Hut Outlets as well as the 5 industrial properties are in line with the financial forecast under the Estimate Period 2015.
If we factor in the missing 1 month's NPI for these properties, that's an additional RM2.6m, bringing the total NPI to RM18.3m, still missing the estimated mark by about 8%. With this in mind, I would project a full year DY to be about 5.7% (5.13% nett), based on the IPO price of RM1.00.
Other important data points: There are very few tenancy leases expiring in 2016. Therefore, Komtar JBCC looks to be the main determining factor as to how well this REIT does in 2016. Occupancy is currently at 89%, so there's some room for growth.
Islamic financing: (Page 141) For the financial period 30 March 2015 (date of establishment) to 31 December 2015, the average effective profit rate for the CMTF-i is 5.11%.
I would estimate that this is about 0.5% more than conventional bank borrowings. But as an Islamic REIT, its choices are limited when it comes to borrowings. It should be noted that a full year borrowing costs work out to about RM18m for ALSREIT, or about RM1.5m/month.
The latest quarterly results don't look too exciting. EPS at 1.25 sen for the last quarter. If this is maintained, we're looking at an annualized EPS of only 5 sen.
Interim income distribution of 2.60 sen per unit for the financial year ended 31 December 2016 (of which 2.37 sen is taxable and 0.23 sen per unit is non-taxable in the hands of unit holders) in respect of the period from 01 January 2016 to 30 June 2016.
There was an increase of 10% in net income before tax recorded in the current quarter as compared with the immediate preceding quarter. The increase was due to increase in rental and promotional income of KOMTAR JBCC.
=== 1Q: 1.25 sen EPS 2Q: 1.38 sen EPS If they maintain 1.38 sen EPS for the next 2 Quarters, that'll be 5.39 sen EPS for the year.
This share has lagged significantly behind the other retail REITs (low trading volume, capital appreciation of only 3 sen above IPO in Sept 2015). Perhaps, a future injection of properties will boost the earning prospects of this REIT.
It is also worthwhile to consider that quite a few Johor malls are expected to be completed in the next 2-3 years: Paradigm JB, MidValley SouthKey, Aeon, etc. Competition for tenants will definitely affect future rental reversions at Komtar JBCC.
Final income distribution of 3.40 sen per unit for the financial year ended 31 December 2016 (of which 2.91 sen is taxable and 0.49 sen per unit is non-taxable in the hands of unit holders) in respect of the period from 01 July 2016 to 31 December 2016. Withholding tax will be deducted for distribution made to the following types of unit holders :- - Tax Resident Companies (no withholding tax) - Resident and Non-Resident Individuals (withholding tax rate at 10%) - Resident Institutional Investors (withholding tax rate at 10%) - Non-Resident Institutional Investors (withholding tax rate at 10%) - Non-Resident Companies (withholding tax rate at 24%) - Nominees (withholding tax rates applicable to respective beneficial owners of the units)
On Persada Annexe, JCorp said it will have a 83,000 sq ft retail centre and will be connected to the Johor Bahru Customs, Immigration and Quarantine (CIQ) Complex, via KOMTAR JBCC and City Square Mall, Persada Johor International Convention Centre and, eventually, the Coronation Square and Galleria.
Malaysia's May wholesale, retail trade growth accelerates TheEdgeFri, Jul 14, 2017 - 5 hours ago
KUALA LUMPUR (July 14): Malaysia's wholesale and retail trade grew 10.7% to RM96.9 billion in May, from a year earlier, led by retail transaction growth.
According to the Statistics Department's statement today, retail trade rose 13.1% while wholesale and motor vehicle transactions climbed 9% and 10.2% respectively.
"The sales value consists of wholesale trade (RM46.9 billion), retail trade (RM37.2 billion) and motor vehicles (RM12.8 billion) businesses. The positive growth was contributed by retail trade (13.1%)," the department said.
May's wholesale and retail trade's on-year 10.7% growth compares with April's 9.6% expansion, according to the department.
FXTM vice president of corporate development and market research Jameel Ahmad wrote in a note today that Malaysia's above-forecast 10.7% wholesale and retail trade growth in May, added clarity to the notion the country's economy was performing above expectations.
“Optimism is continuously increasing that the GDP reading for Q2 will follow the same trend as the first quarter of the year, in terms of surpassing expectations, following a hat-trick of economic data announcements over the past week.
“If the Malaysian economy continues to pull out these numbers consistently above expectations, it won’t be long until think tanks begin upgrading their overall forecasts for growth this year,” Jameel said.
2nd Q could be 1.58 cents net profit (from latest NTA calculation). So Q1 + Q2 is 3.18 cents net profits. S projected about 3.15 cents div for 20171H financial year. 3.15 plus last year 20162H div 3.4 is totaled as 6.55 cents div per annum approximately.
WILL yields of Malaysian real estate investment trusts (REITS) come under pressure because of lower rents and rising interest rates? That depends on how the data is interpreted. There is some evidence that rentals of properties ranging from offices to factories are being renewed at lower rates as leases end although at the beginning of the year, the expectation was for an average 6.3% yield for the year.
REITS experts say the total returns should be calculated on their unit price gains together with the yield. For July, local REITS had an average yield of 5.801% versus 5.507% in January.
Conventional wisdom says that when interest rates rise, this is usually bad for REITS. This is because REITS pile on debt as they acquire assets, so when interest rates rise, their ability to service debt comes under pressure as they also have to pay 90% of their earnings as dividend.
But if interest rates are rising because of a growing economy, this may not necessarily affect REITS negatively because businesses will expand, offices will be rented out and people will spend their money. There is speculation that Bank Negara may have to raise the overnight policy rate some time next year on demand-pull inflation stemming from rising consumer sentiment.
Detractors, who believe that the economic outlook is still uncertain, say consumer sentiment is still down although the first quarter’s unexpected 5.6% growth spurt was in part supported by private consumption. Economists expect the second quarter’s economic data to show growth above 5% after the surge in exports in recent months.
Most Malaysian REITS, because they own malls and offices, have been affected, to a degree, by the glut in office space or the downcast consumer sentiment. There is still reason to be cautious with local REITS, and this can be seen from their unit price performance, which has been mixed on a year-to-date and one-year basis reflecting the local business conditions and consumer sentiments.
What is keeping select REIT unit prices up and performing better than the benchmark FBM KLCI could be the drop in the yield of benchmark 10-year Malaysian Government Securities, which stood at 3.976 from 4.463% at the end of November. This could have driven some investor interest back to Reits, which offer better yields. Indeed, Kenanga Research actually upgraded Reits to “overweight” from “neutral” in June.
Ultimately, REITS are about their underlying assets, which is property, where these are located and how well they are managed. If a particular REIT’s assets fulfill all three factors, there is no reason that yield cannot sustain even with all the daunting challenges.
Given the continued strong performance in the second quarter of 2017, the Malaysian economy recorded a strong growth of 5.7% in fi rst half of 2017. At this point, compared to the beginning of the year, there are considerable improvements in the operating environment of the economy. Looking ahead, it is likely for the Malaysian economy to expand by more than 4.8% for the whole year of 2017. Leading indicators such as the Department of Statistics Malaysia’s composite leading index, MIER Business Conditions Index and MIER Consumer Sentiments Index, suggest continued expansion of the domestic economy.
Retail business in Malaysia continues to remain challenging in 2017 with the consumer confidence in 2016 yet
to recover due to the sluggish economy. In Johor Bahru, the competition is set to intensify with supply of new
sizeable malls which will change the retail landscape in the city. Given the strategic location of KOMTAR
JBCC in the city centre of Johor Bahru and directly connected to CIQ and the transportation hub, JB Sentral,
the Manager is confident that it will provide the competitive advantage in weathering the incoming
competition.
KOMTAR JBCC is the core asset in Al-Salām’s asset portfolio making up of about 48% of the total portfolio.
The tenancy which was due for renewal mostly in third quarter 2017, have seen significant numbers of
renewal. The numbers of non-renewal of tenancy represent less than 5% of the total net lettable area in
KOMTAR JBCC and the vacancy has been progressively filled up with new tenants. Accordingly, KOMTAR
JBCC has improved its occupancy rate from 93% in FY2016 to 96% as at the end of the current quarter as
well as its revenue for Q2-2017 compared to Q2-2016.
The above reflects the confidence of the retailers on the prospect of KOMTAR JBCC despite the current soft
retail market and incoming competition from the new malls.
@Mart Kempas Community Hypermarket recorded an average occupancy rate of 92% (FY2016:90%) as at
the end of the current quarter. Being a community mart which offers shoppers a good range of necessary
household products, @Mart Kempas will remain resilient in this challenging economic situation.
The occupancy of office building especially in Klang Valley remains sluggish as a result of oversupply in the
past few years. However, Menara KOMTAR which is mostly occupied by the sponsor of Al-Salām REIT,
Johor Corporation Group. This provides long term occupancy reliability for Menara KOMTAR. As at end of
Q2-2017, Menara KOMTAR recorded an occupancy rate of 93% (FY2016: 93%).
The QSR Properties which are on a Triple Net arrangement with 100% occupancy rate and the resiliency of
food and beverages industry provides stability to Al-Salām REIT. KFCH College Building is being 100%
tenanted by the education and hospitality division of KPJ group of companies which provide long term
occupancy steadiness.
The Manager will ensure the existing assets within the portfolio are well maintained to ensure the stability of
rental income, stable income distributions for Al-Salām REIT and create long-term value for its unitholders.
Apart from that, the Manager is actively identifying good assets for new acquisition to continuously improve
the yield and ensure further growth of Al-Salām REIT.
Interim income distribution of 2.85 sen per unit for the financial year ending 31 December 2017 (of which 2.58 sen is taxable and 0.27 sen per unit is non-taxable in the hands of unit holders) in respect of the period from 01 January 2017 to 30 June 2017.
The new said unlisted/private REITs need to pay 24% tax even though they release 90% net profit as dividend --- New Government Ruling. This favors the present public-listed REITs where they don't be taxed at all as long as they release 90% net profits as dividend to shareholders.
Al-Salam Real Estate Investment Trust (Oct 5, RM1.00) Maintain buy recommendation with a target price (TP) of RM1.15: We are mildly positive on Al-Salam Real Estate Investment Trust’s (Al-Salam REIT) proposed acquisition of a hypermarket asset in Terengganu as the leaseback will be based on a triple net lease structure.
Al-Salam REIT has proposed to acquire Mydin Hypermarket Gong Badak building in Kuala Terengganu from its vendor, Mydin Wholesale Cash and Carry Sdn Bhd, for RM155 million in cash (excluding acquisition expenses of RM2.6 million) — 2% below the appraised market value of RM158 million.
The deal also entails a leaseback arrangement of 30 years with rental step-up (5% every two years; monthly/annual rental not disclosed) and a triple net lease structure. The acquisition will be funded by borrowings and is expected to be completed in first quarter of 2018. The vendor is primarily engaged in the operations of a hypermarket, supermarket and emporium, as well as franchising, wholesale business and mall management.
We are mildly positive on the deal as a triple net lease structure would provide stable, recurring rental income to Al-Salam REIT with low occupancy risks. Based on our ballpark calculation, assuming a net property yield of 6% and borrowing cost of 5.2%, the hypermarket asset could raise our earnings per unit and distribution per unit forecasts for FY18/FY19/FY20 by 12%/4%/6% respectively.
The purchase could increase AL-Salam REIT’s gross gearing to 0.44 times and total property value by 17% to RM1.077 billion.
We maintain our earnings forecasts pending further disclosures from Al-Salam REIT. We continue to like Al-Salam REIT for its balanced portfolio consisting of stable assets on long and triple net leases, and the Komtar JBCC mall which provides earnings upside. — MaybankIB Research, Oct 4
With the injection of Mydin Hypermarket, its total property value will be RM1.077 billion. Funds will then consider to invest. Amit can queue at RM1 and wait for a year or longer if you are interested with low risk reits.
Will The recent statement my Mydin supermarket owner about consumers having less spending power affect this reit as it has interest in Mydin supermat in Trengganu
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New IPO: The onshore and offshore support services provider for the O&G industry, Steel Hawk Bhd aims to list on the Ace Market!
MQ Trader 3150 views | 3 d ago
0:17
New IPO: The largest mini-market player and a leading groceries retailer in Malaysia, 99 Speed Mart Retail Holdings Bhd aims to list on the Main Market!
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....
apalalu
3 posts
Posted by apalalu > 2016-03-01 10:36 | Report Abuse
what type of tax is that?
other stock's dividend don't have such tax ya?