[Invesco]Practical acquisition of self-investment mouth! It also has a positive effect on other low rated REITs

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On April 21, Invesco Office REIT announced that it changed part of the investment management guidelines at the asset management company and added provisions on acquisition and cancellation of own investment units.

This means that Invesco Office REIT is now able to acquire self-investment units in practice. In terms of equity investment, it is synonymous with the fact that it is possible to acquire treasury stock.

Why is it good to acquire self-investment units? I would like to easily explain the effect of acquiring self-investment unit in the example below:

If the total dividend is 1 million yen and the number of issued investment units is 100 units, the dividend per unit (commonly referred to as DPU) is 1 million yen / 100 (mouth), which is 10,000 yen.

If the REIT acquires 10 out of 100 outlets (meaning acquisition of own investment unit), and canceling it (that is, erasing 10 units), the issued investment unit number is 100 to 10 units with 90 units It is a mouth.

By doing so, one million yen / 100 mouths, one million yen / 90 mouths up until a while ago, DPU will be 11,111 yen. In other words, investors with investment units of REIT increased DPU by 11% without doing anything.

However, in the first place REITs need cash to buy investment units, so in order to use cash, the REIT management company (1) do you want to acquire the property? , (2) Return debt? , (3) Do you want to acquire self-investment units? Because it is required to return maximum returns to investors, acquisition of own investment units is not necessarily the best behavior for investors depending on the situation.

In addition, the effect of acquiring the self-investment port is great in the state of (net assets + unrealized profits of real estate)> market capitalization, that is, when it is corrected to one unit, it is (net assets + unrealized profits of real estate)> stock price It is. By the way, (net asset + unrealized profit of real estate) per unit is NAV (Net asset value), and in stock market Share price divided by share ÷ (net assets + unrealized profits of real estate) per unit is called “NAV magnification” /www.finance-dictionay.com/2012/08/nav.html).

What matters is that “NAV magnification” is 1.0 times or less, that is, 0.9 times or 0.8 times, it is generally considered to be cheaper from the asset value.

I will place a list of NAV magnifications of each issue closest to the following, so I would like to refer to it as follows:

source:JAPAN-REIT.COM