Thursday, 25 April 2013

Croesus Retail Trust ("CRT") Preview



This is a funny name which i don't really know how to pronounce it. Should be read with a "silent e"?

Anyway, i am looking at this now because i have to indicate whether i am interested in it but i am not going to do a detailed analysis until it is launched. 

CRT is the first Asia-Pacific retail trust that has its "initial portfolio" located in Japan and it is the second attempt in which it is trying to list on the SGX. Saizen is the other REIT that came to my mind, but it is focused on the residential segment. My IPO write up in 2007 was here and i must say, the write up last time is so....yucky. hahaha Saizen has since went through a lot of issues (based on my rough recollection) with difficulties in renting out its apartments in 2009. The current yield on Saizen REIT is around 6.6%.

I am not sure whether the initial portfolio are good quality properties, as such, i will appraise this purely from a yield perspective assuming it can continue to rent out 100% of its units and rental remained the same. In addition, CRT has the right of first refusal on 2 retail projects in China and some properties in Japan which they will only acquire if it is accretive. The tentative launch date for the public offer is next week. 

In addition, the assets will be injected at a "discount" to its valuation price (around $15.8m at current rate of $12.5/1000 Yen. 

According to the draft prospectus, the forecast yield is around 8%. CRT has used an exchange rate of around $1.263/Yen. This is a tad higher than the current rate of $1.25. However, having said that, this is the best time to visit Japan, ever. The yen is at a historical low and i have been stocking up on Yen recently. I have visited Japan at least once every year since 2007...and from my memories, the current rate is one of the best rate ever. :oP

Above is the 10 year chart on SGD/Yen. You see the Sgd/Yen rate and you know that now is the best time to buy Yen (in case you play forex). hahaha. I believe the yen will revert to its mean so over the longer period. Assuming a more "normal" forex rate of $0.0145, the implied yield is actually higher if the future distributions are converted at a better rate.The yield will improve to 9.18% if i use an average rate of $0.0.145 but of course, this will be the "upside" scenario. In addition, when crisis comes, the Yen will appreciate as it is perceived to be a safe haven currency.

I like the retail space as well so i have no issues with this "segment" vis-a-vis Saizen. In recent months, Abenomics is working its magic to lure investors back to Japan. Another article for your bedtime reading on Abenomics is from our Today's papers.

Conclusion: It is a Hoot for me based on my preliminary review.... ^_^

Happy IPOing.

31 comments:

Anonymous said...

shall follow u blindly HAHA

Anonymous said...

i think this is a big scam... assume if yen drop another 30% (it prints 1.4 trillion USD), ur NAV, yield will have to recalculate...

Mr. IPO said...

this is a free market. Buy when you like it. Scam, in my view, is too strong a word. A better word will be calculated risk.

Mr. IPO said...

Haha better dont follow blindly hor. My broker says demand is hot. Ask me to go public ATM and apply...?!?!

Anonymous said...

Hi IPO,

Did you find the NAV?


Thomas

Mr. IPO said...

Never check. You have the figure?

Dividends Wizard said...

applying for 10 lots !

Anonymous said...

What's the listing price? Can explain the difference from a Reit? Im going to hoot too, too little ipo action.

Anonymous said...

If earthquake no insurance covered?

Mr. IPO said...

Haven't read the prospectus in detail yet. Usually have coverage la. Will list the pros and cons when officially launched. :)

Anonymous said...

Mr ipo,

I am grateful that you are sharing your knowledge with us. Thank you.


From, grateful small investor ..

Mr. IPO said...

You are most welcome. Thanks for leaving a message. Always encouraging to get such msgs :)

Anonymous said...

Broker asking expression of interest. Is the big time hooting ?

Mr. IPO said...

Already mentioned in my comments.

Anonymous said...


Any new comments after reviewing the prospectus? Waiting for your final thoughts before applying next week....


Cheers

Big fan of Mr IPO :)

Mr. IPO said...

Is it launched? Seemed like still not "registered" yet in MAS Opera

Anonymous said...

it will open on this fri n close on nx wed. nx fri will b in market.

Mr. IPO said...

Got it. Thanks :)

Anonymous said...

IPO
When is it open to ballor thru ATM? Closing when?

Anonymous said...

sorry quite newbie. What does Hoot mean -- good or bad

Anonymous said...

REGISTERED!

Mr. IPO said...

Ok leave a name ah. Difficult to reply when many such annoyomous comments. Will do a detailed write up when I am back in town...

Gladys said...

Mr IPO, Please leave your detailed write up soon so we got ample time to apply. love your write-ups.

SC said...

Didn't come across the NAV, probably got to calculate it out.
Anyone did that (get its NAV)?

Anonymous said...

If I read correctly, NAV should be $0.90

lzw said...

opened already. closes next Wednesday noon. trades next Friday

Anonymous said...

Bro IPO guru

Post ur indepth analysis soon pls!!!

Mr. IPO said...

Busy traveling lah. No access to the prospectus. Hahaha. Just hoot la. Should be a 3 chillies for me.

Anonymous said...



[[ anonymous 7 ]]


re : This is a funny name which i don't really know how to pronounce it. Should be read with a "silent e"?

===

answer, how to pronounce Croesus:

see URL : http://dictionary.reference.com/browse/croesus?s=t

Mr. IPO said...

Thanks!

Anonymous said...

[[ anonymous 7 ]]


re :

(1 ) In addition, when crisis comes, the Yen will appreciate as it is perceived to be a safe haven currency

(2) The yen is at a historical low and i have been stocking up on Yen recently.


=======


offtopic question : are you stocking up on electronic YEN, or physical-paper-cash YEN?


Or both?

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