IPO - EC World REIT
(the finance)EC World REIT is the third REIT IPO in 2016. Only one Reit (BHG REIT) was listed in 2015. But in 2016, we are getting into Reit fatigue already, and maybe there are a few more coming.
Both Manulife US Reit (price recovered) and Frasers Log & Ind Tr are doing fine at the moment and are both above their IPO prices.
I have no luck for both these two earlier IPOs, but I am not interested in this new EC World REIT. The reasons:
1. China. Hmm.....
And all the six properties in one single city, Hangzhou, which means high geographical concentration risk.
2. Sponsored by a China-based group
Of course, not all China Reits are bad. Capitaland Retail China Tr and Mapletree GCC Tr are doing fine, but they are managed by CapitaLand and Mapletree. For comparison, BHG Reit, sponsored by a China-based group, is currently trading below it's IPO price.
3. Track Record
Lack of track record for the sponsor Force Holdings Group Co., Ltd.
4. Projected Yield of 7.1%
7.1% is not that fantastic and my holdings of AIMSAMPI Reit, Cache Log Trust, Frasers Com Tr and Far East HTrust all have a higher yield than that. DYODD.
I will sit out this IPO despite its listing price below its NAV price.
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