Saizen REIT reported full year results this morning and declared a DPU of 0.26c, payable on 29 September 2010. This is better than expected as the REIT did not have a full quarter to accumulate cash for distribution. They also refinanced GK Choan and had to pay some fees as well as amortise that loan. Read about it here.
So, I was expecting a smallish cash distribution of about 0.1c in September. Instead, a DPU of 0.26c in September, given the difficult conditions, bodes well for the next DPU in December which would have a whole quarter to accumulate cash for distribution to unit holders. I estimate the DPU in December to be between 0.4 to 0.5c. Assuming it is 0.4c, that would give an annualised DPU of 1.6c and an annualised yield of 10% at the current unit price of 16c.
Some key numbers from the reports:
1. Annual valuation of properties (161 Freehold buildings in Japan) declined 4% from a year ago from JPY42,051.1m to JPY40,381.7m. The rate of decline has slowed and this is in line with the general view that real estate prices in Japan are bottoming. Read valuation report here.
2. NAV is still at 40c per unit given the strong JPY. The JPY is likely to stay strong, given the concerns of weak recoveries in heavily indebted western economies. Read more…