UOAREIT (5110.KLSE) released the 3Q2020 quarterly report, compared with the same period in 2019:
- Revenue fell by 7.53%, 3Q2020 was RM18.4mil, 3Q2019 was RM19.9mil
- Net Property income fell by 14.86%, RM12.8mil in 3Q2020 and RM14.8mil in 3Q2019
- Realised income per unit fell 12.14%, 2.17cent(RM) in 3Q2020, 2.47cent(RM) in 3Q2019
There is no dividend for this quarter.
In fact, compared to 2Q2020, UOAREIT performed much better this quarter. In 2Q2020, revenue was only RM16mil and net property income was RM10.8mil.
The management of UOAREIT stated that in 3Q2020, they still granted Rental Rebate to the affected tenants, so they recorded a poor return compared to the same quarter in 2019.
At the same time, after the OPR decline, UOAREIT recorded a lower borrowing cost. Compared with the same period in 2019, the borrowing cost fell by 31.9%, which is amazing.
The catalyst for the future of UOAREIT is, of course, the UOA Corporate Tower, which will be acquired later, at a purchase price of RM700mil.UOA Corporate Tower will be the property with the largest valuation of UOAREIT. At present, the total value of UOAREIT’s properties stands at RM1bil.
Due to the high acquisition price, UOAREIT must complete the acquisition through private placement + debt. Based on the financial data of 3Q2020, if the UOA Corporate Tower acquisition complete, the realised income per unit can be as high as 2.32cent(RM) per unit, an increase of 7%
For the forecast of 4Q2020 for the next quarter, if UOAREIT maintains the same performance, the DPU is expected to be 4.12 cent(RM) per unit.
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