While entire Listed REIT space is ignored since last couple of years, still among the listed REIT’s, Brookfield is most neglected.
I personally think REIT should have space in one’s fixed income protfolio, but market’s apathy seems to point in other direction.
For ME, fundamentally risk rewards in Brookfield are favourable at Rs 250 per unit, however, price action (technical indicators) signals that reverse is true.
Things that I dont like in Brookfield include:
- Concentration of top tenants – Even after recent deal, top 4 tenants commands 35% of the space, which looks too much concentration.
- Quality of Tenants – Top 5 tenants are IT services firms, which are very price sensitive. GCC’s in general offer much better tenant profile, as they are not price conscious and are reaady to pay up for better quality properties.
- Income support from promoter – The distributions are supported by promoters as a large portion of the properties are vacant. This income support is available for net 1.5 years, post which, DPU will fall if vaccanies are not filled.
- Under construction properties – are located in Kolkata which offers lowest rent.
Disclosure – Invested
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