Monday, October 26, 2015

Saizen Reit - A surprise rise in stock price?

Saizen reit has been an investment which I've talked about for the past 2 years plus. I personally made my investment in this reit 2 years back. Much has been said about how this reit is trading at a discount and they have been able to sell some of their properties at above valuation which means the reit could be worth even more than what they valued their properties at. The net asset value could have been higher than what they had reported.

For the past 2 years, the stock price of Saizen reit has remained mostly stable with slight declines. Just last week, its price went up suddenly which made a lot of investor curious. It rose 8.2% on Friday alone. What caused the stock price to rise so much?

Saizen reit released a statement thereafter saying that they had actually received a firm's offer in relation to the assets of Saizen Reit. This simply means there's a possibility of an acquisition from another firm which caused the unit price to rise.

Here's the announcement:
"the  Manager  wishes  to  announce  that  the  Manager  has  received  a  firm  offer in  relation  to  the assets  of  Saizen  REIT  which  the  Evaluation  Committee  and  the  joint financial  advisers  are currently  reviewing  and  evaluating.  No  definitive  agreements  have been  entered  into  and  there is  no  assurance  that  the  offer  will  be  accepted  and  that  definitive agreements  will  be  entered into."  

However, it is still speculative at this stage on whether the acquisition will go through. With Saizen reit's net asset valued at  $1.14 currently, any potential buyout may be higher than its current stock price below $1 thus the stock price rose from 80 cents plus to 93 cents on Friday.

Saizen Reit has a portfolio of income producing real estates. These properties are mostly residential properties. It is hard to find an investment in residential properties which was what attracted me to invest in Saizen reit in the beginning. The company is certainly trading at a discount plus residential properties are stable income producing assets especially in Japan where the majority of the population rent their homes.

Saizen Reit is my biggest investment to date as I've added my positions over the years at lower prices. I've collected dividends over the years while waiting for the Reit to unlock its true value. Whether there's an acquisition or not, this has still been a good investment till today.

Let's see what happens next.

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Related Posts:
1. The Japan story - Croesus retail trust and Saizen Reit
2. Saizen REIT - Income from Japanese residential properties?


  1. Wah Congrats.

    Looks like many makes a big killing with Saizen Reits this time round.

    1. Hi B,

      Its not offical yet. Maybe in the end nothing also. Haha. But its still a good investment so far.