Current Price on 23rd Feb 2012 = $1.18
- Current Yield = 6.78%
- Price-to-book Ratio = 0.733
- Assets per unit = $2.388
- Debt per unit = $0.788
- Gearing = 32.6%
- Secured NAV = $1.425 (121%)
CapitaCommercial Trust recently has announced a new acquisition using its cash and little bank borrowings. This is definitely yield-accretive and the property will be unencumbered. Moreover, there is room for upside in rent. Therefore it is a good news.
CapitaCommercial Trust has always been trading at a lower yield compared to its peers like K-REIT Asia, FCOT and Suntec REIT. I believe this is due to the strong capital management of the team which currently maintains a secured NAV of $1.425 which is 121% of its trading price. This ensures that the risk involved is much lower than the others. By the way, CCT has the highest secured NAV in the market.
I do admire CCT as a REIT but I am also concerned about the level of yield that I am getting in my portfolio. This will be a good candidate if I intend to lower the risk level of my portfolio. I am continue to monitor this and see whether it is necessary for me to buy this REIT.