- Current Yield = 7.4%
- Price-to-book Ratio = 1.076
- Assets per unit = $2.21
- Debt per unit = $1.326 (including current liabilities)
- Gearing = 60.1%
- Secured NAV = $0.199 (21%)
Yield is at 7.41% which is quite of a concern because its yield is suppose to be higher at around 8 - 9%. It is trading at a premium of 7.6% which is not attractive. One more worrying sign is its gearing which is the highest at 60.1%. With such high leverage, I am not very sure whether it is sustainable. Although they are acquiring properties at a discount to NAV, I have also notice that their NAV has actually dropped.
I think the reason why they are ready to take on such high leverage is the extremely low interest rates which are fixed and maturing only in 2017 earliest. With Yen getting cheaper, the loan will just get smaller as the asset price rises with inflation. Nevertheless, it is still a risk worth noting.
There is another two REITs which is comparable to Croesus Retail Trust in terms of yield and that is Ascendas Hospitality Trust and Viva Industrial Trust. Will be analyzing that before I decide whether to sell my holdings in Croesus.
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