Wednesday, November 13, 2013

Croesus Retail Trust - First Quarter results released and initiated long position

I blog about investing in Japan's real estate 3 days ago here. There are 2 companies listed on the SGX which primarily owns real estate in Japan. One of them is Saizen Reit and the other is Croesus retail trust. I've bought into Croesus retail trust today at a price of 87.5cents.

Main reason for buying is because of the high dividend yield. This trust promises a 100% payout ratio for the first 2 years. The dividend yield we're looking at on the current price is about 8% pa. Another reason is that we can take the opportunity to ride the widely discussed and predicted growth in Japan if it does happen. Well, this would be harder to predict but it will be good if it does happen.

Today, Croesus retail trust released its 1st Quarter fianncial results. Actual distribution per unit (DPU) is 3.26 cents. This is higher than the originally forecast of 3.11 cents. NAV per unit is stated as 91cents after conversion from Japanese Yen. This means that at the current price of 87.5cents, is still trading at a discount to NAV. Dividends are expected to be paid on or before 31st March 2014. I'm sure existing shareholders are happy to hear this news.

As stated in my earlier post, the downside of this trust is the high gearing level of about 43%. I do hope the management will be able to maximize the use of this loan and put it into good use.

Overall, the results are encouraging. As the occupancy rate remains stable, this trust is set to meet its forecast DPU. It is a good income generating investment.

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Related Post:
1. Looking to invest in Japan's real estate


  1. Hi SG YI

    Congrats on initiating a good position in Croesus.

    I'm looking to add at some of Japan exposure as well but looking more at First Reit and PLife Reit. I think I should look at this too now that you and AK have bought it.

  2. Hi B,

    I was initially hesitant to invest in property related stocks. But Japan is different and its property cycle may already be at the bottom now. So there's a likelihood that things might change for the better. In the meantime, the dividends is still good from this stock.

    Hmm, First reit seems good. I'm not sure about PLife Reit though. Haven't researched it before. Shall check out these 2 too. :)

  3. First Reits prices has come down a little these few days. It is worth a look as DPU is growing and it has a good mind & market share of the healthcare business in Indonesia.

    Down side is that with removal of the exit tax for indonesian travelling and with Indo Air Asia, many has been heading to Malaysia or Thailand for still-afforable "proper check up and follow up".

    I didn't consider PLife as it is way way in a premium on PB.


    1. Hi snOOpy168,

      First reit prices have indeed come down substantially. Its almost to the level of where it started this year. Healthcare is a defensive play. Maybe its worth considering. Shall research more on it this weekend. :p