Monday, October 5, 2015

Croesus Retail Trust - Rights Issue 22 For 100

Croesus Retail Trust is a company which I invested in since November 2013. This is a business trust which owns shopping centres in Japan. It currently has 7 properties in its portfolio and is buying the 8th property in Kyushu island. This is the reason for the rights issue which was announced just a few days ago.

I will be subscribing to the rights issue and also will be applying for excess rights. This has been something which I've been waiting for quite some time now. The dividend income I've been getting from this stock has been quite stable for the past 2 years which I believe the management knows what they are doing.

I attended the retail investor seminar of CRT just a few months back which reaffirms my decision to invest in this stock. You can read more about what the management of CRT said during the seminar here: Investing in Japan's Shopping Centres - Croesus Retail Trust Retail Investor Seminar

Croesus Retail Trust Acquires Torius Property in Fukuoka Prefecture, Japan for JPY 7,997 million

Torius Property will be the eighth property in Croesus Retail Trust’s (“CRT”) portfolio, marking its first foray into Kyushu Island, and will be the fourth property acquired by CRT since its IPO in May 2013. The rights issue will be offered for Units of twenty-two (22) Rights Units for every one hundred (100) existing Units at S$0.610 per Rights Unit.

Torius Property is a large-scale suburban retail mall located in the satellite town of Hisayama-machi of Kasuya-gun, which is approximately 13 km from central Fukuoka City in Fukuoka Prefecture, on Japan’s Kyushu Island. It comprises of 36 single or double storey buildings and offers a diverse and unique mix of 145 tenants. Some of Torius Property’ tenants include Costco (wholesale supermarket), Nafco (interior and furniture, DIY), United Cinema (cinema), Rakuichi Rakuza
(amusement centre) and Daiso (100 yen shop). Other notable facilities at Torius Property include a petting zoo, as well as an outdoor barbecue park that enhances the mall's appeal as a family outing and gathering destination.



The current stock price for CRT is about S$0.815 per unit. Getting the rights units at S$0.610 will improve the yield I receive from this stock moving forward. Subscribing to the rights issue shows my trust in the management to provide good income for shareholders in the future.

The new property that they will be buying has good NPI yield of 7.84% as compared to the NPI yield of CRT's existing portfolio of 5.3%. Torius Property has a high occupancy rate of 95.3%.

The commencement of trading of rights entitlement will start on 9th October 2015 and end on 19th October 2015. The last date and time for acceptance of the Rights Entitlements and payment for Rights Units will be on 23rd October 2015.

Its time for more dividend income!

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Related Posts:
1. The Japan story - Croesus retail trust and Saizen Reit
2. Investing in Japan's Shopping Centres - Croesus Retail Trust Retail Investor Seminar

22 comments:

  1. Hi may i know what is the dividend like based on ur investment? Would u recommend this if i have just started investing recently?

    ReplyDelete
    Replies
    1. Hi,

      You have to understand the risks involved in investing in this company before you make any decision. The dividend yield for me is close to 10%. I will not be in the position to recommend any stocks but can only say base on what i do. :)

      Delete
  2. what if they keep doing rights issue every year?

    looks like a value trap to me

    also the gearing is very high

    ReplyDelete
    Replies
    1. Hi Felix,

      This is the first time they are doing a rights issue since IPO. Yes gearing is high and i suppose that's why they are doing a rights issue instead of borrowing more for this new property. I did hear from the management that why they are agressively acquiring properties now is because they see the potential of rising asset prices in Japan which will put the company in good ground later on.

      Delete
  3. Hi SGYI,

    I bought 37 lots at 1.13 at the very beginning. Timing was all wrong. How will this rights issue 22 affect me? How to minimise my loss?

    Thanks.

    ReplyDelete
    Replies
    1. Hi,

      You can get the rights issue at 0.61 cents which will lower your average price. If you believe this company will continue to do better, getting at lower prices will definitely improve your yield and minimize your losses in the long run.

      Delete
  4. Thanks for sharing.

    I might wanna nibble some at $0.80

    ReplyDelete
    Replies
    1. Hi Dividend Knight,

      I believe 80 cents is a good price :)

      Delete
  5. Hi SGYI,

    How do I go about getting the rights issue at $0.61?

    ReplyDelete
    Replies
    1. Hi,

      Are you an existing shareholder? If yes, you'll receive the information sheet from 9th oct onwards. Rights can be applied through the information sheet or through atm.

      Delete
    2. I see. So you can only purchase the amount that you currently own, no more, no less? Let's say you own 1000 units, you can only apply for 220 units?

      Delete
    3. You can apply for excess rights too. You can buy as much as you want but you may not get it. If you own 1000 units, 220 is guaranteed for you. The rest of excess units you subscribe will not be guaranteed.

      Delete
    4. Thanks for the enlightenment!

      Delete
  6. what if we bought thru std chart.. how to apply for the rights arh? =X

    ReplyDelete
    Replies
    1. Hi Lynx Mynx,

      For Standard Chartered, I'm not sure how the rights issue works coz your stocks are not under the CDP. Its better to check with them.

      Delete
  7. What will happen to the share price once the rights is out...Do we expect a drop to near 70 cents since more shares are created?

    ReplyDelete
  8. Hi,

    The stock has XR and dropped by the proportioned amount at 22 to 100 for 0.61 per share. Once the rights are finalised, we should see some weakness in the share price before it moves up again. To 70cents? Nobody will know how low it'll go.

    ReplyDelete
  9. When will we know if we got the excess rights? I still don't see any refunds in my account as of today.

    ReplyDelete
    Replies
    1. Hi CNW,

      I've not received the letter also. Will have to wait awhile more.

      Delete
    2. Hi CNW,

      Just saw the announcement on Croesus website that the refunds will be paid back within 14 days after the closing date of 23 October. We will know how many excess rights we get within 10 days after closing which will be soon within the next 2 days.

      Delete
  10. Hi SGYI,

    Are you still holdingon to CRT? I am looking into REITS and deciding between OUE Hospitality and CRT.

    ReplyDelete
    Replies
    1. Hi Gladys,

      Yes I'm still holding on to CRT and have subscribed to all of its rights issue so far. I've not looked into oue htrust so can't comment on it. CRT isn't really at an exactly attractive price now though. My avergae price is 0.82.

      Delete