Reader says...
What do you think of EC World REIT?
AK says...
EC World REIT, I looked at it and was in the process of blogging about it but, somehow, it joined the ranks of half finished blogs. I have about 400 of these. Terrible, I know.
Looking at that half finished blog, I remember I was concerned about the relatively short land leases, similar to most Singapore industrial land leases and the relatively low distribution yield.
The yield was 7% or so and this was because it was bolstered by the sponsor as well. Without the sponsor's support, the yield would have been much lower. Less than 6%.
Still, the sponsor accounted for two thirds of the REIT's income. Real concentration risk.
There was also something about having debt denominated in S$ which I didn't like. I would have liked for all the debt to be in RMB which would give them a natural currency hedge.
Also, I didn't like that a port was such a substantial part of the the REIT's portfolio. Quite the opposite of e-commerce.
It just didn't seem rewarding enough for the risks we must bear.
I would demand a much higher yield for something like this.
Just being promising is not good enough. Whether I am being compensated sufficiently is more important and this brings to mind my PCRT story.
This is just me talking to myself, of course. 😉
Related post:
PCRT: Full divestment.