Japan based retail business trust Croesus Retail Trust made an acquisition with debts and rights issue.

Current Share Price: $0.85

Last Dividend per Share: $0.0808 (Dividend Yield 9.6%)

Presentation Slides here

Croesus Retail Trust is rather similar to that of iREIT Global, a German Office Trust majority owned by Shanghai Tong:

  1. Both have properties not in Singapore
  2. Both are highly leveraged (iREIT 42% and Croesus 47%)
  3. Both markets have in the past 5 years declining currency versus the Singapore dollar
  4. Both have very low foreign denominated borrowing rates
  5. Both have market cap rates around 6-7%
  6. Both are somewhat carry trade plays
  7. Both are in places experiencing slow growth
  8. Both yield more than 9% currently

The purchase

The purchase looks not bad in that it is in another prefecture. This creates a geographical diversification. Not so important in Singapore, rather important in earthquake prone Japan.

The land lease …