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Croesus Retail Trust - Another Japan Reit Potential Takeover

Posted on the 01 May 2017 by Sgyounginvestment

Croesus Retail Trust is not new to this blog. I've written several articles about this stock since 2013. It has been more than 3 years since I was an investor in this company. How time flies just like that. Investing in Japan Reits was a strategy I embarked on 3 years plus ago primarily due to macroeconomic reasons. Japan was starting an aggressive monetary and fiscal policy plan at that time which I saw the opportunity to invest in companies which owns real estate in Japan.

Croesus Retail Trust - Another Japan Reit Potential Takeover

Just last week, there is a potential takeover which was announced by the company and this sent the stock price up as high as $1. The same thing is happening again which happened to another Japan Reit called Saizen Reit. If we see the same takeover as Saizen Reit, Croesus Retail Trust could possibly be acquired at more than $1 which gives a 5%-10% premium to its price to book value.

This stock has served me well over the years as an income investment. Its dividend was close to 10% in the early years and averagely it gave about 8%+ yield. Many were worried if the yield is sustainable but they have proven so. The last time I heard from the management face to face was during a retail investor day. I heard from the management on their strategy to grow the company by doing more acquisitions so CRT becomes an indexable stock which will hopefully drive the stock price up. In the end, they did do what they said. From a portfolio of 4 shopping centres, they expanded to 11 now. They also reassured investors that they will be responsible in delivering the DPU which they did consistently.

Whether it will be acquired or not, it doesn't really matter to me as its still a good investment. For those who are already investors in this company, let's see what happens next.


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