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Stanlib I-reit IPO @20/- per unit
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Sam_Kibs
#21 Posted : Friday, October 23, 2015 11:48:30 AM
Rank: New-farer


Joined: 7/1/2015
Posts: 67
Ericsson wrote:
Shit will hit the fan.
That is where conning begins

please expound
“It’s no good, it’s no good!” says the buyer—
then goes off and boasts about the purchase-Proverbs 20:14
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maka
#22 Posted : Friday, October 23, 2015 12:07:19 PM
Rank: Elder


Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
Sam_Kibs wrote:
Ericsson wrote:
Shit will hit the fan.
That is where conning begins

please expound


He he heLaughing out loudly Laughing out loudly
possunt quia posse videntur
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KenyanEconomist
#23 Posted : Friday, October 23, 2015 12:16:19 PM
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Joined: 5/7/2014
Posts: 40
Any idea how much fees Stanlib will pay itself to manage the reit?
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sparkly
#24 Posted : Saturday, October 24, 2015 8:18:43 AM
Rank: Elder


Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
Impact of Stanlib REIT

REITs are good because they are tax exempt as long as they distribute most of their net income to the beneficiaries. The beneficiary just pays 5% of distribution as tax which is final.

An argument against I REITs is that since they have to distribute most of their income, they are not left with cash to do improvements and maintenance to maintain high rent.

Once the initial excitement dies off, this REIT will expose the state of rental real estate in Kenya which is overvalued and low Yielding.

Just like HAL exposed the fallacy that selling plots is super profitable, the STANLIB REIT will in time lead to discovery of normal yields in real estate rentals.

Let's hear other investors opinions.
Life is short. Live passionately.
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kayhara
#25 Posted : Saturday, October 24, 2015 8:24:26 AM
Rank: Veteran


Joined: 5/5/2011
Posts: 1,059
I will employ a wait and see on this, I have no knowledge on this, and even if they give most of their income to beneficiaries, how much is it? and is it worth it.
To Each His Own
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mtaalamu
#26 Posted : Saturday, October 24, 2015 10:18:45 AM
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Joined: 4/19/2010
Posts: 11
Does anyone know how to buy into this IPO from outside the country?
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enyands
#27 Posted : Saturday, October 24, 2015 10:48:53 AM
Rank: Elder


Joined: 12/25/2014
Posts: 2,300
Location: kenya
mtaalamu wrote:
Does anyone know how to buy into this IPO from outside the country?


Everything starts with opening a Cdsc account . U need to find a broker ,faida, dyer Blair ,kingdom security amongst many

Then call them from wherever you are and ask if they accept scanned copies ,if not then international courier will be your friend if you racing against close of ipo.

Once they open it call them and ask them the procedure for purchasing those ipo .
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muganda
#28 Posted : Saturday, October 24, 2015 11:07:21 AM
Rank: Elder


Joined: 9/15/2006
Posts: 3,905
Ambitions: 14% annual return on capital; 6.25% annual growth in rents. There's never a limit to a man's ambition. Now reality, there's another truth.

Can GreenSpan mall in Donholm offer this? http://www.businessdaily...6/-/ybj1th/-/index.html
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mawinder
#29 Posted : Saturday, October 24, 2015 11:22:17 AM
Rank: Elder


Joined: 4/30/2008
Posts: 6,029
muganda wrote:
Ambitions: 14% annual return on capital; 6.25% annual growth in rents. There's never a limit to a man's ambition. Now reality, there's another truth.

Can GreenSpan mall in Donholm offer this? http://www.businessdaily...6/-/ybj1th/-/index.html

Is the 14% guaranteed? If yes then compared to my plots it is a good deal.
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streetwise
#30 Posted : Saturday, October 24, 2015 7:56:07 PM
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Joined: 6/23/2011
Posts: 1,740
Location: Nairobi
This one wont touch.

I see them getting the money and declaring a loss year in year out. Uta DO
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Chaka
#31 Posted : Sunday, October 25, 2015 9:30:34 AM
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Joined: 2/16/2007
Posts: 2,114
Who owns the Greenspan Mall?I ask because of the possibility of a conflict of interest?
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the deal
#32 Posted : Sunday, October 25, 2015 12:06:34 PM
Rank: Elder


Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
Sounds like a good investment opportunity...one just gotta check out the following

1. The Price to NAV -it should not be more than 2
2. Gearing levels (cos this can mess up income distributable to unit holders given the sticky high interest rates in Kenya)-it should not be more than 20%
3. Dividend Yield (It should not be less than 5%)

Why would I buy into this one

1. Issuers Track record-Stanlibs's and Liberty's (parent company) track record compares to none on the African continent...they have done amazing projects in South Africa.

2. Management targeting realistic returns-14% rental yields are realistic and possible...just depends on the buying price and how well the mall is doing in terms of traffic etc

3. Low risk-this guys are not buying land to build and then sell which is a very high risk strategy look at Home Afrika and Britam (Acorn Saga)...this guys are buying Already built property...Build property with tenants in it...which is easy to analyse and predict future cash flows

4. Portfolio diversification-awesome way to get an exposure to Kenya's real estate sector.
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lochaz-index
#33 Posted : Sunday, October 25, 2015 2:18:23 PM
Rank: Veteran


Joined: 9/18/2014
Posts: 1,127
the deal wrote:
Sounds like a good investment opportunity...one just gotta check out the following

1. The Price to NAV -it should not be more than 2
2. Gearing levels (cos this can mess up income distributable to unit holders given the sticky high interest rates in Kenya)-it should not be more than 20%
3. Dividend Yield (It should not be less than 5%)

Why would I buy into this one

1. Issuers Track record-Stanlibs's and Liberty's (parent company) track record compares to none on the African continent...they have done amazing projects in South Africa.

2. Management targeting realistic returns-14% rental yields are realistic and possible...just depends on the buying price and how well the mall is doing in terms of traffic etc

3. Low risk-this guys are not buying land to build and then sell which is a very high risk strategy look at Home Afrika and Britam (Acorn Saga)...this guys are buying Already built property...Build property with tenants in it...which is easy to analyse and predict future cash flows

4. Portfolio diversification-awesome way to get an exposure to Kenya's real estate sector.



Going by your premises:
1. They have no assets under management currently meaning NAV = zero. They are fully depending on cash raised to fund purchase of property. Upon successful IPO and listing, NAV(assuming full subscription) = 12.5b less floating costs.

2. I don't know whether REITS are allowed to use leverage in asset acquisition but as it stands, I assume everything is being sourced via equity. So gearing is at 0%.

3. They are supposed to distribute > 80% of rental income+ other incomes(dividends, interest etc) less associated costs. This means 80% of the respective net rental yield which should be over 5%.

4. A gross commercial rental yield of 14% is achievable subject to full occupancy but rarely. Average yield (composite properties) is lower than that.

Subscription wise they might just pull it off seeing as only 25% is slated for wanjiku.
All in all details are a bit hazy to make an informed opinion. Let us see how Mr. Market prices it.
The main purpose of the stock market is to make fools of as many people as possible.
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Liv
#34 Posted : Sunday, October 25, 2015 4:15:08 PM
Rank: Veteran


Joined: 11/14/2006
Posts: 1,311
sparkly wrote:
Impact of Stanlib REIT

REITs are good because they are tax exempt as long as they distribute most of their net income to the beneficiaries. The beneficiary just pays 5% of distribution as tax which is final.




I don't see any tax advantage..... You mean the company will not pay the 30% corporate tax before getting net income? Tax on Dividends - 5% paid by all companies (not REITS only) in kenya to individuals is final.
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Liv
#35 Posted : Sunday, October 25, 2015 4:26:05 PM
Rank: Veteran


Joined: 11/14/2006
Posts: 1,311
the deal wrote:
Sounds like a good investment opportunity...one just gotta check out the following

1. The Price to NAV -it should not be more than 2
2. Gearing levels (cos this can mess up income distributable to unit holders given the sticky high interest rates in Kenya)-it should not be more than 20%
3. Dividend Yield (It should not be less than 5%)

Why would I buy into this one

1. Issuers Track record-Stanlibs's and Liberty's (parent company) track record compares to none on the African continent...they have done amazing projects in South Africa.

2. Management targeting realistic returns-14% rental yields are realistic and possible...just depends on the buying price and how well the mall is doing in terms of traffic etc

3. Low risk-this guys are not buying land to build and then sell which is a very high risk strategy look at Home Afrika and Britam (Acorn Saga)...this guys are buying Already built property...Build property with tenants in it...which is easy to analyse and predict future cash flows

4. Portfolio diversification-awesome way to get an exposure to Kenya's real estate sector.



This is not convincing:
1. What expertise does Stanlib management have in managing such investments? Isn't this the first time they are dealing with such kind of investments? Why should they be trusted?

2. 14% yield on purchased properties is too high...almost unrealistic. If it was on self developed projects that could be easily convincing. But development from zero is high risk as you rightly point out in your point 3.

3. Low risk yes.... So you expect low return...not 14% indicated.

4. Culturally Kenyans want to have a title deed in their names.... That's why everyone wants a plot somewhere in their name. REITS might be a hard sell to Wanjiku at the beginning .... Maybe institutional investors might consider.
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Chaka
#36 Posted : Sunday, October 25, 2015 4:46:29 PM
Rank: Elder


Joined: 2/16/2007
Posts: 2,114
Liv wrote:


This is not convincing:
1. What expertise does Stanlib management have in managing such investments? Isn't this the first time they are dealing with such kind of investments? Why should they be trusted?

....

May be they have pulled this elsewhere.If so where?
@the deal,Any REITS in Namibia by Stanlib or anyone else?
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the deal
#37 Posted : Sunday, October 25, 2015 4:54:57 PM
Rank: Elder


Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
Chaka wrote:
Liv wrote:


This is not convincing:
1. What expertise does Stanlib management have in managing such investments? Isn't this the first time they are dealing with such kind of investments? Why should they be trusted?

....

May be they have pulled this elsewhere.If so where?
@The deal,Any REITS in Namibia by Stanlib or anyone else?

Stanlib is a top dog...they own some properties here but they havent listed them yet http://www.stanlib.com/n...ortfoliohealthcare.aspx

This is a REIT I hold some units in here in Namibia http://www.oryxprop.com/ so far so good...i think they offer more insights on how REITS work
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lochaz-index
#38 Posted : Sunday, October 25, 2015 6:11:37 PM
Rank: Veteran


Joined: 9/18/2014
Posts: 1,127
Liv wrote:
sparkly wrote:
Impact of Stanlib REIT

REITs are good because they are tax exempt as long as they distribute most of their net income to the beneficiaries. The beneficiary just pays 5% of distribution as tax which is final.




I don't see any tax advantage..... You mean the company will not pay the 30% corporate tax before getting net income? Tax on Dividends - 5% paid by all companies (not REITS only) in kenya to individuals is final.


Yes, they are exempt from the 30% corporate tax
The main purpose of the stock market is to make fools of as many people as possible.
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bird_man
#39 Posted : Sunday, October 25, 2015 7:21:08 PM
Rank: Veteran


Joined: 11/2/2006
Posts: 1,206
Location: Nairobi
Two questions here:
1.Yes they will distribute 80% of profits to shareholders.But how do they ensure administrative & finance expenses dont eat up most of rental collections income?
2.Is 14% ROI for shareholder not too high especially with the number of competing malls and commercial properties coming up?Have they been able to do this in SA?
Formally employed people often live their employers' dream & forget about their own.
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enyands
#40 Posted : Sunday, October 25, 2015 7:22:39 PM
Rank: Elder


Joined: 12/25/2014
Posts: 2,300
Location: kenya
how I would love these guys to float this baby tomorrow on nse. with the bear flexing his muscles and demolishing everything on nse, its going to be destroyed so strong that the initial price of 20 will fall below 10.thats when I might jump in. but for now as @mnadii puts it "cash is king" (and I wish I heard his warning about the stocks crash coming-but I ignored ' excuse im new')im not wasting any of my money on this thing.of course it will be oversubscribed but I cant enter with 20. that's way too overrated.wait and see is my thing for now
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