Japan Residential ORD 10P Share Discussion Threads

[tonyd3] 07/9/2007 01:36

I think you are being too optimistic . This has not paid out a Divi , is unproven and could incur further currency related losses. The subprime crisis has further to run and property stocks are not an upward path

British land and Land Securities are trading 20% below nav so I think your looking at this share falling to 85p at least but realistically 68p or lower until they have some real good news

The fact that they converted all capital to yen on listing is negative as the yen has fallen . I would sell now and buy back when it falls below 68p

[shuisky] 29/8/2007 16:25

Actually, I thought the results were ok.

The NAV reflects the fact that they are still in the process of getting funds invested...


'Net asset value per share was 85p at the end of the period. This reflects costs associated with fund launch and property acquisitions as well as foreign exchange loss. As the majority of funds raised were converted to yen upon listing, the difference in foreign exchange rates between October and the end of the period generated a loss of £7.3 million on the Balance Sheet.'

...So whilst the losses due to foreign exchange rates is obviously a concern it shouldn't reflect badly on the company. We all knew the FX risk before we invested. In sactual fact the co is progressing quite well in its investment programmes...

'During the interim period, due to opportunistic purchases, the percentage of
properties acquired on completion, prior to full lease-up, was greater than
anticipated at the time of admission. Although properties are leasing-up well
and generating increasing levels of cash flow, the delay in income is expected
to have an adverse impact on first year income and distributions. '

This is good. I would prefer that they get the purchases completed ahead of schedule. WHAT WE DO NOT WANT IS MORE FUND RAISING IN ORDER TO INVEST MORE AND GENERATE MORE MANAGEMENT INCOME. If anyone connected with JRIC reading this than please note.

As they state...

'The Directors of the Company expect the Fund to be fully invested
by April 2008, within 18 months of Admission.'

...again, this is good news. And investments currently (unleveraged) yielding 5.2% whilst currently borrowing at 2.16% is good news. Future funding is, of course, subject to market conditions (which have been turbulent) but I don't happen to think it will have a pronounced influence on JRIC's borrowing needs. A BoJ hike might, but we are not there yet, and JRIC's investment programme seems to be progressing well.

[vikcom] 24/8/2007 21:17

davebowler

I suggest you sell and buy trinity capital.

[davebowler] 24/8/2007 12:59

I must be psychic asking the question half an hour before the reply!
Unfortunately I can't tell which way the price is going to go though.
Are there any more plays like this one but below asset value?

[atkijo] 24/8/2007 12:51

Interim results just out, NAV of 85p. Not particularly impressed. No divi either thanks to a first year loss. Going forward should do better, if only because of a strenghtening yen.

[davebowler] 24/8/2007 11:53

How can you find out the current net asset value? This seems a good play on
the Yen carry trade unwinding to me.

[atkijo] 18/8/2007 16:11

Monty, I bought in a few months ago at c103p - bad timing or what! Still holding and agree with your comments. Problem at the moment is fear, as nobody seems to know who is holding all the CDOs when the music stopped.

At the moment the markets are pretty much assuming that any company that needs to borrow money may not be able to do so, or if they can, will only be able to do so at much higher rates. I had this one down as a relatively 'safe bet', but it has fallen pretty much in line with the market, so who knows!

[monty9] 17/8/2007 10:06

Anyone still out there?

Here we have a company with JPY assets, mostly GBP capital, and an increase in the JPY value of about 10% in the last 6 weeks or so, yet the share price has decreased some 10% - wrong way around once the market looks at the balance sheet.

Unless there is bad news only known by the institutions and marketmakers, the fundamentals remain compelling. Further, with all the JPY flowing back to Japan there should be plenty of liquidity to ensure continued low borrowing rates, which are currently well below the yield.

Given the secure asset base, this must be one of the best propositions on the market currently. Am I missing something?

[energyi] 17/4/2007 07:10

This is an interesting concept, and good timing maybe

Are they hedging the currency risk?

[stuart14] 03/4/2007 07:42

I think only £14million confirmed

[energyi] 03/4/2007 07:33

any idea of how much they have spent so far??

[hybrasil] 19/3/2007 18:11

Made a maiden purchase here today.

[asmagliocco] 23/2/2007 09:30

I trust the company is forex-savvy, i.e. buy the Yen if it really is so undervalued, without waiting for all the due diligence, etc. to be done before paying up for the targeted projects.

[stuart14] 13/2/2007 09:12

(Close): The Nikkei closed at its highest level since 2000 on Tuesday, led by gains to property stocks after they reported strong results last week.
Building company Mitsui Fudosan was one of the highest risers.

Banking stocks such as Mitsubishi Financial also rose ahead of expected upbeat Japanese economic growth data due out on Thursday.

The Nikkei ended up 117 points to 17,621. Steel, shipping and brokerage firms also enjoyed rises.

[ydderf] 10/11/2006 10:35

th key variables which are necessary to form a view are:

What price are/have they paying/paid for the Yen?
What 'outperformance' will be creamed off by the managers in incentives etc?
Since the Yen is arguably seriously undervalued, how they deal with currency risk will be as important as underlying property strategy, - are they going to hedge away the potential gains?

[flashheart] 05/11/2006 21:51

Anyone any info on forthcoming Prospect Japan Fund of similar nature to JRIC. Thanks in advance.

[red army] 01/11/2006 08:58

shuisky

I phoned for a copy last week and still no show.

[shuisky] 01/11/2006 08:52

'They estimate being fully invested within 12 months, leading to a yield in year one of 3%, which should rise to 6% in year two.'

This is taken from the article that begins this thread. There is Yen exposure, but the predicted divi's are good returns for Yen Cashflows. In any case I'm bullish on the Yen.

Sorry to be a bore, but, has anyone been able to get the admission document?

[bisiboy] 31/10/2006 13:36

what is the predicted income yield

[stuart14] 24/10/2006 16:19

I haven't really given it a lot of time to be honest shuisky. Will try harder!!

[shuisky] 24/10/2006 16:17

Stuart14,

any luck with the admission document?

I've emailed Fairfax IS (brokers) and the Financial reporting Group of Ernst & Young (auditors) but no reply from either.

[stuart14] 21/10/2006 08:12

Haven't managed to get it myself yet either shulsky. Will keep trying though!

Good Luck!

[shuisky] 21/10/2006 08:09

hi stuart14, and thanks for starting this thread.

Do you know how to obtain a pdf of the admission document? I've emailed fairfax, but no response so far.

[stuart14] 14/10/2006 16:28

This came to market yesterday, raising £100million in the process.

Japan's residential property has been tipped to perform well over the coming years. This could be an interesting way to gain exposure to the market.

[stuart14] 14/10/2006 16:27

The investment objective of the Company is to provide Shareholders with stable income together with capital growth. The Company intends to invest (initially through a Tokumei Kumiai (TK)or silent partnership arrangement and subsequently if appropriate through one or more Tokutei Mokuteki Kaishas (TMKs)) in and hold Japanese residential property predominantly in major conurbations which offer attractive yields and the potential for capital growth. Up to 15 per cent. of the gross asset value (calculated at the time of investment) may be invested in commercial property, where for example a mixed portfolio of properties is acquired, although it is not the intention of the Company to actively invest in commercial property.

The Company's Investment Advisor, KR Halifax Asset Management, will identify suitable properties for investment and will provide asset management services to the Group. The Investment Advisor is a sister company of Colliers Halifax and is able to utilise certain resources, including staff, of Colliers Halifax until the Placing Proceeds are fully invested. Colliers Halifax was established in Japan in 1952 and has advised on real estate transactions valued in aggregate at over Yen400 billion (£1.8 billion). Colliers Halifax is a leading real estate consultant in Japan and since 1988 has represented the Colliers International Group in Japan. The Company will have five non-executive directors who have investment company and real estate experience.

There is a chance of gaining high income potential from Japanese residential real estate, according to Killick's fund research, which has placed a new Japanese residential investment company on its buy list.

The Japanese Residential Investment Company is a new Guernsey-domiciled, closed-ended fund seeking a listing on AIM. It intends to pay a high income with a target annualised dividend yield of 6% and the potential for longer term capital gain. The fund, which closes on 26 September and begins trading on 13 October, aims to invest in a diversified portfolio of residential properties throughout Japan.

The property portfolio will be managed by Colliers Halifax, part of the Colliers International network. It aims to raise £100 million, which will lead to a gross asset value of around £330 million with borrowings.

The managers have identified a seed portfolio of about 28 properties with an estimated value of £105 million, which they expect to acquire following launch. They estimate being fully invested within 12 months, leading to a yield in year one of 3%, which should rise to 6% in year two.

Mick Gilligan, director of fund research for Killick, points to data from the Ministry of Land, Infrastructure and Transport in Tokyo, which says Japanese real estate prices have fallen significantly from their medium term peaks. The average residential land price in Japan has fallen in value in each of the last eight years, culminating in a loss of more than 30%.