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see all small fishes here, all said good counter because of DY 8% and no more else, don't have any sound logical judgments and just hoo9e because of DY. they absolutely didn't have a clue what his reit doing, it's an office REIT, most of the properties are not grade A office-towers and those locations are oversupply withs other office towers too, while Malaysia economic remains unstable it's very hard for them to raise the rental price...share price just need to drop RM0.10 is more than enough to eat up your 8% DY...
the office tenant mostly is big customers, DHL, BWW, HSBC, and hypermarket is Tesco...... over 90% occupancy rate. most tenant is for long term so I think is worth to invest.
all customer that rent an office tower is used to consider big because only those company can afford that especially since this company is based in KL, Sentral's portfolio has oil&gas tenants( now is down cycle of oil) and their overall occupancy contract is ranged from 1-2 years not really long term, but due to nature of its business, and regarding the competitive strengths, as said there's plenty of office tower in KL as aforementioned KL office tower are oversupplied (research by Knight Frank）, and right now Quill 5 building is vacant since 2019..btw psychology has a term name "confirmation bias" which means an investor have a tendency to seek information that supports a person's beliefs and ignore the others facts that are against her favor, an investor usually lost her subjectivity to review a stock after becoming a shareholder.
@Tan Jia Lee
Hi bro, I appreciate your analysis. As I'm not as familiar in REIT sector, would u mind to share which REIT is currently doing better and prominently?
Yz Hoo, Sentral is actually one of the best REITS to invest in if you are not too impatient. It is true that commerical is suffering now however we have received vaccines from USA and China.It is a reality and no longer just a hope (for vaccine to arrive). As we receive more supplies ( India is ramping up production big time manufacturing vaccines on license), more Malaysians will be innoculated and with that, optimism will increase. If you're willing to wait min till Dec2021, payoff will come
In my opinion, Yes, Sentral's tenant consider short term to me as well (longest probably is around 202x year). But I had few questions in my head,
1) What kind of company like to move their office around?
2) If big tenant like DHL, Shell, HSBC move out, are they going to build a new building or look for another tenant ? (The fact is, rental is similar around KL area, unless there is an earning even the tenant move out including their machines, Computers, and other assets.)
3) I don't agree Oil & Gas will be obsolete immediately. Yes, Europe has EV policy for climate protection, but that is for Car. Oil & Gas are still a demand in Airplanes, electricity generation, and so on. Also, the biggest challenge in the EV industry is the long lasting of the battery fuel. They can build the Solar electric station like what we have on petrol. But Shell already has the property around Malaysia market, they can always convert their station or few petrol guns from petrol to Solar electricity energy.
My comment is, Shell could be narrow down their business size on petrol, but still has a chance to adapt the new solar electricity energy. At that moment, Shell probably have a big retrenchment, but also a big recruitment at the same time.
This is not a buy or sell call, is a discussion. My judgement could be wrong, and opening for answer.