A nod to Croesus’ move to internal management

SINGAPORE (Aug 29): Analysts are staying positive on Croesus Retail Trust (CRT) even after the real-estate investment trust bought out its trustee-manager for JPY 4.1 billion ($54.6 million).

DBS Group research is maintaining its “buy” recommendation with a higher target price of 99 cents from 90 cents previously. Analysts Mervin Song and Derek Tan noted that the move to internal management was met with “dissatisfaction from some unitholders with the price paid to buy out CRT’s trustee-manager and concerns over the large upfront cash payment to the current management team for their stake in the trustee-manager”, but believe that the perceived alignment between the interests of the management and its unitholders will continue to drive CRT’s share price up.

According to them, as CRT would be without an external trustee-manager, there would be one less obstacle to a potential takeover by a Japan-based REIT, a speculation according to some market watchers as the REIT continues to trade at a huge discount to its net asset value and offers consistently high yields.

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