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Hi all.. I am a newcomer to this forum. I read Croesus with some interest, and not vested in the counter (yet?)
I am currently working in Tokyo for another 2 months, and I would like to do something special - do a site survey for Croesus shopping mall assets! As part of my personal learning, I like to do this and write a field report here.
The mall(s) I am considering visiting are in the Kanto area:
Aeon Town Moriya (Chiba Prefecture) - Largest NLA
Mallage Shobu (Saitama Prefecture) - Next largest NLA
I do need some advice here from you folks. What are the things I should look out for to assess the malls? Is it worth the time to go down to the malls to take a look?
Many thanks in advance.
Raymond
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31-05-2013, 10:02 AM
(This post was last modified: 31-05-2013, 10:05 AM by specuvestor.)
wow that's cool  my 2 cts worth:
1) Check out the tenant mix- high/mid/low end... usually this is related to the theme of the mall, if there is one
2) Occupancy rate ie are the shops all fully taken up. Related to this is: are there any room for asset enhancement or it is already very squeezy 
3) Flow of traffic vs other malls around it. Human traffic is a weird phenomenon that 2 malls side by side has very different traffic
End of day it is a ROUGH feel of what you think the business is doing vs what you see in the financial reporting. Does the 2 tie or make sense to u?
Enjoy your 2 months!
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward
Think Asset-Business-Structure (ABS)
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(31-05-2013, 10:43 PM)MINX Wrote: (31-05-2013, 10:02 AM)specuvestor Wrote: wow that's cool my 2 cts worth:
1) Check out the tenant mix- high/mid/low end... usually this is related to the theme of the mall, if there is one
2) Occupancy rate ie are the shops all fully taken up. Related to this is: are there any room for asset enhancement or it is already very squeezy
3) Flow of traffic vs other malls around it. Human traffic is a weird phenomenon that 2 malls side by side has very different traffic
End of day it is a ROUGH feel of what you think the business is doing vs what you see in the financial reporting. Does the 2 tie or make sense to u?
Enjoy your 2 months! Croesus all 4 malls are 100% occupied, so you can save some work on that. 
Unless you're very familiar with the history of the 4 malls and their historical occupancy rate, NPI,... etc., a 100% occupancy at the time of IPO may not be very meaningful.
I don't have any Japan mall examples but in Singapore, I have seen many malls which started with 100% occupancy (either newly opened or newly refurbished) and seemingly good human traffic but slowly deteriorates into a ghost town...
So, I don't see any harm to do some legwork whenever possible, to better understand and get a feel of the place. Can even go at different timing (peak office hours and off-peak), weekday vs weekends,... to see for yourself the crowd and what they're doing.. and try to imagine whether it's sustainable in the longer run..
For eg. for the Shinsaibashi area (Osaka), my previous experience is that the whole street is busiest only during weekends / holidays and for weekdays, usually only during evening (after office hours), especially more so on Fridays - Japanese call Fridays HanaKin, a time to relax and enjoy after working for the whole week. It'd appear (to me) that the crowd there are mainly Working Adults - F&B & Youngsters - Shopping, maybe only window shopping... I remembered there was a Sony Plaza, several floors, where you can go and try all their products & gadgets. During weekdays office hours, the whole street can appear rather deserted...
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Hi Minx, Specuvestor and KopiKat,
Thank you for your suggestions.
I will adopt some of your advice. For flow of traffic compared to other malls, it is a bit difficult since both malls I consider are far away from Tokyo, I may not have time to walk around (That's why I left out Osaka malls, too far).
Ditto for weekday vs weekend.. I can't go during weekdays. But yes, generally Japan weekdays the malls are dead towns.
I am planning to go towards end of June or early July. Will update more then.
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this article seemed to suggest that residential Reits have better long term value than retail reits.
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http://www.bloomberg.com/news/2013-04-16...eturn.html
Japan Apartment Real Estate Proving Best: Riskless Return
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Sigh, I sala again...this REIT is doing better than Mapletree Greater China Trust...why? Besides having higher projected yield, they are many risks such as currency, location of malls, size of mall, Japanese economy etc....still perform better than MGCT.....always sala
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Any view on this company?
AR Capital just increased their stake.
Finding the Value in a Speculative World
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(16-06-2013, 11:32 PM)BeDisciplined Wrote: Sigh, I sala again...this REIT is doing better than Mapletree Greater China Trust...why? Besides having higher projected yield, they are many risks such as currency, location of malls, size of mall, Japanese economy etc....still perform better than MGCT.....always sala
If I recall, Croesus hedge at least 80% of their currency exposure so the dividend payout in SGD is mitigated. Also, Japan is expected to maintain ultra low interest rates for a very long time so interest rate risk is much lower vs Singapore REITS. Also, the current yield for Croesus is about 8.5%, which is much higher than MGCT yield of about 6%.
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