Actually I make a calculation for the total return of 405, 823, 778, 808 since IPO. I use the 1st day closing price as the starting value. Assume all dividends are reinvested on the day it is collected.
The returns are as follows:
823: around 21%
778: around 13% (assume all rights issued are subscribed)
405: around 8%
808: around 3%
I am a little surprised at the result (particularly 778). So that's why I am asking the question whether REITs with malls are better than the others.
I just spotted that the average rent per sq. feet of 823 is higher than that of 778.
The customer of 823's property should be living in public housing while the customer of 778 should be middle class with higher disposable income.
In logic, the customer of 778 can pay more and hence the shops can bear a higher rent.....
This draws two question:
1. the mgmt of 823 should be better than 778
-823 is actively doing renovation to upgrade and improve many of its malls. Also 823 succeeds to bring in brand name retailers to its malls
-seems that 778 is doing a lot less and is just renting out its malls to whoever is paying rent...
-maybe that's the reason the average rental is higher for 823
2. a portion of the shops in 778 are rented to Park N Shop or other Lee's business
-are these businesses paying a market rental?
823 is trading at a premium to all other REIT due to its size, lower rental base and better mgmt.
But is that premium worth it?