REIT Watch: CommonWealth Likely to Exit Select Income

REIT Watch: CommonWealth Likely to Exit Select Income
26th March 2013

**CommonWealth to Sell Stake in Select Income**

CommonWealth (NYSE:CWH) has taken actions to reduce debt by selling non-core assets amidst takeover attempts by activist investors. The real estate investment trust has filed to sell some or all of its remaining 56 percent stake in Hawaiian-focused office property owner Select Income REIT (NYSE:SIR). BofA Merrill Lynch is leading the offer, which could comprise of up to 22 million shares worth some $500 million (₤329 million) in total as of Tuesday, March 26. Select’s share price fell by 4.05 percent to $25.58 on Monday following CommonWealth’s announcement.

The past month has been fairly active for CommonWealth and its management, with the REIT carrying out a highly dilutive $600 million (₤395 million) stock offering and divesting of its remaining 18 percent stake in Government Properties Income REIT as well as reducing its share holdings in Hospitality Properties Trust.
**Two Harbors Announces Final Distribution of Silver Bay Shares**

Two Harbors’ (NYSE:TWO) share price fell by 0.51 percent to $13.74 on Monday but later retraced its losses, rising 0.95 percent to $13.87 in afterhours trading after the REIT announced final distribution ratio of its shares of common stock in Silver Bay. The company will distribute 17.8 million shares of Silver Bay to Two Harbors shareholders as of record at April 2. Shareholders will receive approximately 0.049 Silver Bay shares for each share of Two Harbors.

US-based Two Harbors is a real estate investment trust that invests in residential mortgage-backed securities, residential mortgage loans and other mortgage-related assets. Silver Bay Realty Trust, a REIT that manages a portfolio of single-family homes, was created late last year.
**Hong Leong Investment Bank Endorses KLCC’s Plan to Create a Stapled REIT**

Independent adviser Hong Leong Investment Bank (HLIB) has deemed KLCC Property Holdings’ plan to form a stapled real estate investment trust as fair and reasonable, The Star Online reported.
“We are of the view that the benefits of the proposed stapled structure and the rationale for the proposed Midciti Resources Sdn Bhd acquisition have sufficient merits and are not detrimental to the non-interested shareholders,” commented HLIB.
The stapled real estate investment trust, named KLCCP Stapled Group, would have shareholders ultimately own stock in both KLCC Property and KLCC REIT. The newly created company would be the largest Malaysian REIT with assets of RM15.4 billion (₤3.3 billion). Its portfolio would consist of three properties – Malaysia’s famous Petronas Twin Towers, Menara 3 Petronas and Menara ExxonMobil, all located in Kuala Lumpur.
!m[Two Harbors Announces Final Distribution of Silver Bay Shares, KLCC’s Stapled REIT Plan Seen as “Fair and Reasonable”](/uploads/story/1704/thumbs/pic1_inline.png)
**Scotiabank Reaffirms Primaris Retail’s “Sector Perform” Rating**
Primaris Retail real estate investment trust (TSE:PMZ.UN) had its “sector perform” rating reiterated by equities analysts at Scotiabank in a report published on Monday, March 25. They currently have a C$27.75 price target on the stock.
Primaris Retail is an enclosed shopping centre real estate investment trust with a portfolio of 43 properties. The REIT’s share price fell by 0.26 percent to C$27.08 on Monday.
**Select Income’s share price was $25.58 as of 26.03.2013, 07.15 GMT.**
**CommonWealth’s share price was $22.68 as of 26.03.2013, 07.15 GMT.**
**Two Harbors’ share price was $13.87 as of 26.03.2013, 07.15 GMT.**
**Primaris Retail’s share price was C$27.08 as of 26.03.2013, 07.15 GMT.**

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