Saturday, April 27, 2013

Croesus Retail Trust IPO

Croesus Retail Trust, a Japanese real estate investment trust, is aiming to raise about S$394 million through an initial public offering in Singapore this year.


Some details include:
Preliminary prospectus available here:$File/CRT%20Preliminary%20Prospectus.pdf

indicative price: $0.93

Offering: 208,815,000 and 248,015,000 Units
Number of units in public offer: 21,505,000 Units
[page 31 of preliminary prospectus]

yield forecast: $0.074,    yield: 7.96% for 1 July 2013 to 30 June 2014
                         $0.0749, yield: 8.05% for 1 July 2014 to 30 June 2015
[page 10 of preliminary prospectus]
I personally don't like the way they round to the nearest 1 decimal place and say 8 and 8.1% yield.

Gearing:   $27,419,096 / $57,685,819 = 0.4753 or 47.5%  [page 41 of preliminary prospectus]

Properties and projected income:

Corner stone investors:
[page 72-74 of preliminary prospectus]

  • Asdew Acquisitions Pte Ltd
  • Citadel Asset Management
  • D.E. Shaw Valence International, Inc.
  • Eastspring Investments (Singapore) Limited
  • G.K. Goh Strategic Holdings Pte Ltd
  • Hong Leong Asset Management
  • Hwang Investment Management Berhad
  • JF Asset Management Limited
  • JABCAP Multi Strategy Master Fund Limited
  • Myriad Asset Management Limited
  • Target Asset Management Pte Ltd
Indicative timetable:
[page 36 of preliminary prospectus]

Other notes:
This is not a REIT and the trust do not need to maintain above 90% distributions as payout. See differences between REIT and trust for more info:
Differences between reits and trusts

Differences between reits and trusts

You may have hear of people advising on purchasing or REITs for its high yield. They may also tell you that REITs have to give out 90% of income to enjoy tax benefits. But do you know that business trusts do not have such a requirement to distribute its income/earnings even though they may have a similar yield?

The comparison table below has been shared on hardwarezone by other forummers before. I thought it will be good to share it here as well.

Saturday, April 13, 2013

Time to pay your income taxes again

It is time to pay our income taxes again. Some newer taxpayers may not know how Singapore's income tax works. Singapore's income tax rate is based on a progressive system. The first few "bands" of your income pay lesser taxes, the higher "bands" pay more taxes.

The tax rates for "tax residents" are as follows:

How to read this table
Your income is divided into bands as listed above. Note that "chargeable income" is after deducting all reliefs and CPF deductions. I will provide a few examples to estimate your taxes

Example 1: your annual chargeable income is 25k. The first 20k is taxed at 0%. Yes, you do not need to pay taxes for this first 20k. The next 5k falls into the band of the "next 10k" which is at a 2% tax rate. The income tax for this 5k will be 5000 * 2 / 100 = $100.

Example 2: Your annual chargeable income is 50k. Notice that your chargeable income spans across different bands with the following tax rates: 0%, 2 %, 3.5%, 7%.
Instead of working out the individual bands, you can look at the "First 40k" which has already computed the tax for the first 40k of assessable income. This amount works out to be $550 [10000 * 2 / 100 + 10000 * 3.5/100 ]. You then calculate the final band for the 10k which is 10000*7/100 = $700. Adding the two components, you have $550 + $700 = $1250.

One time tax relief
Earlier this year, there was a Budget 2013 announcement for income taxes.

All resident individual taxpayers will be given a personal income tax rebate for the tax payable for Year of Assessment (YA) 2013. The amount of rebate granted depends on the age of the resident individual as at 31 Dec 2012, subject to a cap of $1,500:
a) 30% for resident individuals aged below 60; and
b) 50% for resident individuals aged 60 and above.

Using example 2 above, the tax payer's taxes was calculated to be $1250. With the 30% rebate, he will only need to pay $875. Note that this relief only applies to YA2013