Asked on 31 Jan 2020
What are some things that you can foresee happening due to this merger? Would it still be feasible to invest in them?
Being a company, it is not required for Capitaland to give out their earnings every year. Therefore you would see that the div yield could vary alot from year to year.
As for REITs, it is compulsory for them to distribute 90% of their taxable income to their shareholders.
As for the mergers, one of the main considerations for me is the diversification. From being a pureplay retail REIT, the merger would transform CMT into a retail/commercial REIT. For buyers who are looking at some diversification from a single purchase then yay, but if you are looking to go purely into retail or commercial then nope.
You can also take a look at previous mergers among other REITs and take a look at their performance (although no guarantees that it will be similar)
At least the Capitaland stock price (green line, 10 year period versus U.S. SP500)
was not really a good investment...