Nibbled Fortune Reit (778.HK)

Nibbled some Fortune Reit (778.HK) today. I have been eyeing it for more than a month. I feel foolish buying a Hong Kong retail mall Reit in midst of chaos that has paralyzed the city.

My entry is 12% below the historic high made early July. The following is the daily chart of the past 1Y:

This entry met my entry criteria of Price/NAV at below the -2 standard deviation of the past 5Y.

Here are the reasons why I have been eyeing at Fortune Reit:

  • Consecutive years of annual DPU growth.
  • Consecutive years of annual DPU per unit growth.
  • Owns 16 suburban malls, much like Frasers Centrepoint Tr (J69U.SI) which has done very well.
  • AEIs (asset enhancement initiative) at Fortune Kingswood to be completed by end 2019. Fortune has a proven track record of past AEIs.
  • +7.8% rental reversion. This is much higher than Singapore’s malls.
  • Gearing at 21%. Have not done equity fund raising such as issuing rights or preferential offerings.

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