Croesus Retail Trust

Croesus Retail Trust (“CRT”) is the first Asia-Pacific retail trust with an initial portfolio located in Japan listed on 10th May 2013 on SGX mainboard through an Initial Public Offering (IPO) with an offer price of S$0.93. The first day closing trading price is S$1.145. CRT's current total number of issued shares of 229,118,000 shares, it's market capitalisation is approximately S$669.4 million at closing.

CRT’s principal investment strategy is to invest in a diversified portfolio of predominantly retail real estate assets located in Japan and across the Asia-Pacific region and real estate-related assets relating to the foregoing. The initial portfolio is located in Japan in order to create a core portfolio of stable income generating assets. This serves as a foundation for CRT to pursue development and acquisition opportunities in the Asia-Pacific region, to generate long-term capital value and long-term returns.

CRT is backed by its strategic partners Daiwa House and Marubeni who have contributed two Properties (approx. 41.1% of the Initial Portfolio based on the valuation by the independent valuer) and one Property (approx. 17.9% of the Initial Portfolio based on the valuation by the independent valuer) respectively. Both have granted CRT voluntary ROFRs to acquire further predominantly retail real estate assests across Asia-Pacific ex-Japan. Daiwa House is one of Japan's leading real estate business conglomorates while Marubeni is one of Japan's largest general trading companies.

CRT’s distribution policy is to distribute 100% of its Distributable Income for the period from the Listing Date to 30 June 2014 and from 1 July 2014 to 30 June 2015. Thereafter, CRT will seek to distribute at least 90% of its Distributable Income. The actual level of distribution will be determined at the Trustee-Manager's discretion.

CRT had 4 initial portfolios namely the AEON Town Moriya, AEON Town Suzuka, Luz ShinSaibashi and Mallage Shobu.

 AEON Town Moriya

Aeon Town Moriya comprises a large shopping mall with approximately 135 retail units across a GFA of approximately 65,000 sq m. It is a closed mall, which means that all its stores are located in one roofed-building having a supermarket as an anchor tenant and multiple specialty stores. The property accommodates a wide variety of tenants. Parking spaces are located on the third floor, rooftop, and external areas.

The NLA of Aeon Town Moriya is distributed over four floors above ground as follows:

• the first floor comprises 71 retail units, focused on family fashion, sporting goods and supermarket
• the second floor comprises 49 retail units, focused on ladies’ and men’s fashion, an electronic goods store and a cinema
• the third floor comprises car parking space
• the fourth floor comprises rooftop space

 

 AEON Town Suzuka

Aeon Town Suzuka comprises a large scale shopping centre with a GFA of approximately 41,500 sqm. Opened in June 2007, the property was built adjacent to Aeon Mall Suzuka, the second largest retail facility in Mie Prefecture, exceeded only by Aeon Kuwana Shopping Centre. The property was designed to complement Aeon Mall Suzuka, which also has the same operator, with both facilities featuring a diversified tenant mix and allowing for synergies with each other.

The property comprises 11 standalone structures located within a site area of approximately 90,000 sq m. The largest building is an open air mall located on the western side of the site with a diverse range of tenants focused on apparel and interior goods, including furniture, fashion and children’s and maternity wear.

The second largest building on the southern side has two units, comprising a home centre and a high-end fishing goods store at ground level, while the second floor is used for parking. A hot spring facility, a book store and six restaurant buildings are located on the eastern side of the property.

 Luz ShinSaibashi

Luz Shinsaibashi consists of one basement level and seven floors above ground. Completed in September 2009, the property is one of the few new retail buildings along the Shinsaibashisuji Avenue. 

Originally constructed in 1987, the reconstruction and opening of Luz Shinsaibashi has completely changed the image of the area into a trendier and more modern atmosphere. The property features an attractive façade with an eye-catching billboard of the anchor tenant, H&M Hennes & Mauritz AB. As it faces Dotonbori River and the bridge connecting Namba and Shinsaibashi stations along the Shinsabashisuji Avenue, the property boasts good visibility and is well positioned to attract the shoppers in the area.

 Mallage Shobu

Mallage Shobu is a suburban shopping centre developed and managed by Sojitz New Urban. In addition, Sojitz New Urban developed and manages other two suburban shopping centres located in Saga and Chiba prefectures. Mallage Shobu is the most recently completed facility under the Mallage branding and continues to establish itself among the market.

Mallage Shobu comprises a large scale shopping mall with approximately 250 retail tenants across a sales area of around 67,000 sq m. Opened in November 2008, Mallage Shobu is the second largest retail facility in Saitama Prefecture, superseded only by Aeon Laketown which is the largest shopping centre in the whole of Japan.

The retail mall area is distributed over three floors above ground in the following manner:

• the first floor, which comprises 109 retail units, is focused on family fashion and home interior goods 
• the second floor, which comprises 60 retail units, is focused on ladies' and men's fashion and lifestyle goods
• the third floor, which comprises 77 units, is catered towards young fashion and hobby/culture retailers

CRT Q2 FY 2013/2014 Financial Result released on 14 February 2014 indicate that their First Distribution Per Unit exceeds forecast for first half of FY 2014 by 3.1% and is paying their investors 5.24 cents per share. This property trust is attractive if you are interested in retail property in Asia Pacific or Japan at the moment. It works like a REITs, giving 90% of their distributable income after 30 June 2015. For now, they are giving 100% of their distributable income to their investors which is very appealing for the first year. I will be keen to invest on it when the price is right, probably after the exercise dividend.