Finally, the management has declare rights issue for First Reit in order to purchase two properties. I am no fundamental expert and I just took glimpse of their proposal.
Price at 0.50 is cheap, but a lot of rights is being declare, 5 for 4 to be exact. Recently, AIMS is at 7 for 20, which was their second rights. AIMS first rights was 2 for 1 due to the serious nature of their financial problem. First Reit has no issue with their finance. I really don't understand why they are doing this. Also one of the propose property is still under development. Personally, I don't like properties that are under development because of no past performance.
The presentation seemed ill-prepared. It did not clearly state how the income will accretive to current dividend and did not mentioned the gearing ratio after rights. They just give a figure on commencement rent for both property and future dividend yield which are just not enough info.
All in all, I'll continue to wait and see.
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