07-03-2013, 10:33 PM
Hi Shanrui,
I totally agree with your analysis and would like to add the following:
- The main selling point here is the liquidity tap that is chasing names with good sponsor. Reminds me of CRCT when it was listed before the 2007 bull run. Due to success of CMT and Capland's REIT model, investors threw caution to the wind and chased the billion population China story. The rest is history but certainly a precious lesson.
- The HK Festive Mall is a matured asset with little asset enhancement potential. It was acquired from Swire. In order to entice Swire to sell, the price must be ultimate and that is probably it.
- China is another potential mindfield. I wasn't aware of pending litigation. If indeed, it is the case then there are many books that the local judiciary can fall back on - so many that it can turn into a long term nightmares. In addition, there are plenty of fantastic China commercial and retail properties that are available at steep discount to book values let alone the much touted ghost buildings lurking around China.
- Want an established way to play China - Metro could well be a better bet even though earnings record is volatile or even Yanlord.
- I made kopi money and I am very happy even though I sold at the day's low.
I totally agree with your analysis and would like to add the following:
- The main selling point here is the liquidity tap that is chasing names with good sponsor. Reminds me of CRCT when it was listed before the 2007 bull run. Due to success of CMT and Capland's REIT model, investors threw caution to the wind and chased the billion population China story. The rest is history but certainly a precious lesson.
- The HK Festive Mall is a matured asset with little asset enhancement potential. It was acquired from Swire. In order to entice Swire to sell, the price must be ultimate and that is probably it.
- China is another potential mindfield. I wasn't aware of pending litigation. If indeed, it is the case then there are many books that the local judiciary can fall back on - so many that it can turn into a long term nightmares. In addition, there are plenty of fantastic China commercial and retail properties that are available at steep discount to book values let alone the much touted ghost buildings lurking around China.
- Want an established way to play China - Metro could well be a better bet even though earnings record is volatile or even Yanlord.
- I made kopi money and I am very happy even though I sold at the day's low.
(07-03-2013, 10:21 PM)shanrui_91 Wrote: [ -> ]Even using the 5.69 cents dpu in the second year, it is only 5.5% yield. This is not even a pure retail asset, it has an office asset in China that account for 25% of its value and is undergoing some litigation appeal. The assets are on 50 years lease and not on 99 years lease like most retail malls in Singapore. And their gearing ratio is so high especially compared to all other foreign reits listed in Singapore. I remember reading from BT that the sponsor has 5 properties in the pipeline in China. Seemed like the excellent HK retail asset is used to justify dumping weaker properties in the future.