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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