Thanks for the quick response

I would normally agree with you but comeon, we are talking about hotels such as Hilton, Ritz Carlton, JW Marriot..these would hardly be called unwanted assests…but the exact opposite, highly wanted assets which will appreciate nicely over time.

He has traded 2 malls for 8 hotels, i think the deal is very bias towards Starhill Reit to grow..

It is true that assets can be sold to STAREIT at inflated prices in the future, but if it was me owning more than 50% of that company(remember Starhill Global Reit Singapore he owns much less than 50%) I would be bias to the one I own more off..

All that said and done, YTL nor Starhill Global does not have any more hospitality assets to sell, so if they want to grow it would have to be done by acquisitions from the market..my theory is that they will wait till their prefferential shares of Starhill GLobal to inflate, cash that out and then go hotel hunting

@Vincent – Alaqar had 2 main risk factors which is its higher gearing & single-tenancy risk. I believe KPJ is their only tenant… what if they vacate or something goes wrong at KPJ? While this is unlikely, we are also not sure how their rental rates with KPJ are determined. This makes the arms-length aspect questionable. Hektar has a wide tenancy spread and while gearing is also on the higher side, it should be a lower risk vehicle compared with Alaqar. Subang Parade has a reasonably strong following as a neighbourhood convenience shopping centre but growth is limited due to strong competition nearby. I’m not concerned about the lack of acquisitions in Hektar as long as they can show that they are actively adding value to their centres. Quite often acquisitions are a hocus-pocus way of adding value to investors.

@James – I sold my CIMB at around RM6.90 few months back and thought it was overvalued then haha! My view is that the earnings line may take a few years to catch up with the current share price. But I realize a lot of analysts like it. Personally for me it does not offer much value compared to say other banks, Maybank included. I’m not sure about Axiata and MEGB but Maxis is OK for dividends. I think it falls into the Slow Grower category and valuation is not cheap for the kind of growth rate it offers. For dividends, you may want to check out NCB at RM3.70 instead.

@Basant – thanks for the heads up on STAREIT. They may need to rebuild their following, maybe some investors have lost interest recently due to bigger offerings by Sunway and Capita Mall. Regarding your point of selling their assets at a high price to Starhill Global REIT, I wonder what is to stop them from doing it the other way and sell assets at a high price into STAREIT in future? Many of our Malaysian REITs operate with a lot of conflict of interest that has to be properly managed. Remember that not too long ago REITs in Malaysia are seen as vehicles for unwanted assets by developers. Does a leopard change its spots?

Noticed some interest in Starhill from some of the readers..I am actually very bullish on Starhill Reit for these few reasons.

Firstly, it is a YTL Francis Yeoh company and everyone knows Francis Yeoh in Malaysia and is one of the richest people there.

Secondly, he had recently sold of 2 malls in the reit at inflated prices to his Singapore Starhill Global and when I mean inflated i mean 1 billion ringgit much above his purchase price. The best part is that he had settled the purchase with a) cash and b) preffered shares in starhill global . Now Singapore property prices have been advancing and so has the share market so these preffered shares also have increased in value and have not been reflected in the balance sheet as they have not been converted yet into cash.

Thirdly, he has used part of the 1b proceeds and bought over 9 hotels which brings the reit to become a full fledged hospitality reit in Malaysia with names such as

Cameron Highlands Resort;
Hilton Niseko ;
Vistana Penang;
Vistana Kuala Lumpur;
Vistana Kuantan;
The Residences at The Ritz-Carlton, Kuala Lumpur
The Ritz-Carlton Hotel, Kuala Lumpur
Pangkor Laut Resort 3; and
Tanjong Jara Resort
JW Marriot

Fourthly, these properties have not been revalued and earnings have not been captured as it has just been transffered into the reit, I believe he will increase net asset value, earnings, etc in the near future and continue to increase these over the years

Fifthly, the share price is trading at 86 c and net asset value is around 1.25 , remember this is before revaluations, before adding in the preffered shares which have also infalted

Sixth, most reits in Malaysia are trading around and above their net asset value, Starhill being one of the the top 3 in size has not yet been brought up to value in terms of share price

Seventh, YTL and Francis Yeoh have the majority stake in this company more than they have in Starhill Global so it would be in their best interest to see this company rise in value

Eight, Francis Yeoh has just appointed his son to be the director of this company

Ninth, They are one of the only reits where the owners are the unit holders, this is an interview done last year..

“”Properties like Reits are very long-term dividend plays. How many corporation in the world like to have so many units as a unitholder? Look at our Starhill Reit in KL. We own more than 50 per cent. When do you see a property player wanting to take part as a unitholder?’ he asks.

‘They want to be the manager. They probably want to sell the property for a very expensive price and then manage the Reit, make money from it and let the unitholders suffer. But for us, we like to balance the interest between us, the managers, and the unitholders which are also us.’”"

Lastly, Francis Yeoh is a long term, value investor and thinks very much like Warren Buffett, and I believe that the share price of this company is very low and I am convinced that it will do very very well..

I am reviewing my portfolio and I need your advice on the stocks that I am interested in. You gave me some very useful guidelines and stocks. I managed to make some profit. Thank you for that.

This time, I am thinking of buying certain shares but I am not too sure whether it is a good time to enter the market. What do you think Larry? I am thinking of buying some CIMB, MayBank, Axiata, MEGB and Maxis shares. What are your opinions on those shares? Would you please recommend me some shares as I have limited knowledge related to shares?

Many thanks, Larry!

Apart from this, what do you think of Hektar and ALAQAR? Hektar is facing tight competition for retail rental and it has a lot of lease expiry clients every year, while Alaqar seems to be a better choice due to long tenure with KPJ? As for Potential revenue growth wise, it seems Alaqar has continuous actions to buy more hospitals, while Hektar still retaining 3 malls with 95.x% tenant. I think Alaqar is a lot better here? I’m not sure why Alaqar share price is down 10% lately. D/Y wise they are almost the same for now, +/-1%. Any comment on this?

By the way, do you have an email or Skype to communicate better? Thanks.

Need your expertise again. What do you think of STAREIT going full-fledge on hospitality REIT? I’m interested with it, due to it’s attractive dividend yield & this new attempt. But I need other expert’s opinion like you to fine-tune my judgement.

By the way, how come Sunny got your contact number? Haha!

Thanks.

I know how profitable gold investing can be. My brother made really good money doing just that, and myself I am making good money investing in gold.

I recommend to anyone who’s thinking of starting to invest in gold to read a book or two on this topic, as there so many mistakes and blunders that are possible to make when you first start in this industry.

Thanks for sharing this with your readers.