Capital Calls: SF's troubles ruin perfectly good REIT

SF Real Estate Investment Trust

18/05/2021 11:33

(The author is a Reuters Breakingviews columnist. The opinions
expressed are their own.  Refile to generate new USN code.)
    HONG KONG, May 18 (Reuters Breakingviews) - Concise insights
on global finance.
 
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NOT DELIVERING. The disappointing debut of SF Holding's
 002352.SZ  $300 million real estate investment trust shows even
decent assets can’t distract Chinese investors from the parent’s
troubles. The $46 billion Shenzhen-listed logistics company on
Monday spun off three properties in a Hong Kong REIT listing.
The issue price equated to a forecast rental yield of 5.5% for
2021, per an estimate by Refinitiv IFR, but when trading opened
it promptly plunged to close 16% below its IPO price
 urn:newsml:reuters.com:*:nIfpFg6B2.
    The reaction underscores broader concerns about the courier
giant’s financial health. In April SF shocked investors when it
reported a $152 million net loss for the three months to March -
its first quarterly loss since going public - due to soaring
costs of expanding new businesses amid a fierce price war. SF
shares have lost half their value since February. 
    The discount on the logistics properties may seem extreme.
On the other hand, tenants connected to SF Holdings provide
four-fifths of the REIT’s revenue. Investors have cause to take
a holistic view. (By Yawen Chen)
    On Twitter http://twitter.com/breakingviews
    
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| Editing by Pete Sweeney and Katrina Hamlin)