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