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Accordia Golf Trust: Offer must be way above valuation.

Saturday, November 30, 2019

Accordia Golf Trust rose 10 cents or 16.7% to close at 70 cents a unit in the last trading session.

A friend who read my last blog on Accordia Golf Trust called me to ask if $1.20 a unit is realistic?

What did I say in reply?

Well, I do not know if it would happen but I think it is not an unreasonable price.

I told him the best test is to try and sell the golf courses in the open market and see how much potential buyers are willing to pay.

This was one of the ways I used to determine that Saizen REIT was undervalued so many years ago.

For example, in a blog on Saizen REIT 5 years ago in 2014, I said:

"I am inclined to believe that Saizen REIT's properties are worth much more since they managed to sell a property in May at 19% above book value and another one in August at 12.8% above book value. 

"This suggests that the book values of the REIT's properties are rather conservative."

Mr. Market will always pay what he feels is the right price for an asset at any particular point in time.

Not sure if valuations can be trusted? 

Mr. Market has the answer. 

This could very well be the same for Accordia Golf Trust.

If we recall, earlier this year in April, the Trust sold one of their golf courses at above valuation too.

"The consideration of the Divestment is JPY 200,000,000 (approximately S$2,415,751).

"The valuation of the Golf Course as at 31 December 2018 conducted by CBRE, the independent valuer commissioned by the Trustee-Manager as part of its annual valuation of its golf courses... is JPY 27,500,000 (approximately S$332,166)."

Full announcement on Accordia Golf Trust's website:
Divestment Of Village Higashi Karuizawa Golf Club.

You might want to read that again.

The consideration was jaw droppingly above valuation.

It could be the case that the book values of other golf courses in the Trust's portfolio are rather conservative as well.

However, to be realistic, when selling an entire portfolio, it is usually more difficult to command a big premium compared to selling the properties individually.

This was certainly the case with Saizen REIT.

Nonetheless, a compelling offer has to be one that is substantially above the NAV.

Otherwise, there is no reason to accept the offer.

Related post:
Accordia Golf Trust: 60% premium or $1.21 per unit?

You might want to read this:
My investment portfolio or investment philosophy?


Your Ka-ki! said...

Hi Ak

I ate 2 half boil eggs today. Cant post picture here though.

Accordia up again !!!

Singtel too !!

Are you adding to your CDG position at today price ?

AK71 said...


Eggs are good whole food.

Good for you. ;)

AK71 said...

"... we do note that Tokyo listed golf course operator, PGM Holdings, the largest golf course operator after Accordia Golf in Japan, was previously acquired by pachinko operator, Heiwa Corp, at a valuation 1.5x P/B in 2015 according to Bloomberg data."

Lim & Tan Securities (2 Dec 19)

Your Ka-ki! said...

Somebody call David Loh just bought 1 mil of centurion shares at 44c after reading ASSI AK.

AK71 said...


1 million shares?

Oh my.


AK71 said...

Hi Laurence,

Thanks for the comment but I am not publishing it because it has a link to a page that sells courses and I have a rule of not allowing advertisements in my blog's comments section.

I know it is not your intention.

So, no worries. ;)

It is just that I have to be consistent. :)

Ok said...

Ok said...

Hello AK, you could be very engrossed in your neverwinter,so i looked out news for you to repay your generous sharing (though i didnt buy a share based on your soliloquy because i have just become a convert having stumbled upon your website)

AK71 said...

Hi Ok,

Yikes, a convert?

You make ASSI sound like a religion or a place of worship. ;p

Thanks for the link. :)

Accordia Golf Trust: Buying cheap and cheaper.

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