Abstract: Share the reasons of buying Hong Kong Reits – Champion Reits (2778).
Transaction detail
Today I am sharing with you about the transaction that I used the bond coupons and reits distribution I received from my “Fixed Income Portfolio” to buy 2000 units of Champion Reits (HK stock code: 2778).
Champion Reits 30-day chart
A little background about Champion Reits
Champion Reits (Hong Kong stock code: 2778) is a reits in Hong Kong. Currently, its market cap is HK$26.5B or US$3.4B, with price to book ratio (PB) of 0.52 and annual return rate of 5.6%. Its largest unit holder is Great Eagle Holdings Limited (Hong Kong stock code: 41), which owns 67.22% of Champion Reits (up to year end 2020). The property portfolio of Champion Reits is quite simple, mainly including two Hong Kong properties which are Three Garden Road and Langham Place. These assets are absolutely high-quality. In addition, these places are definitely the landmarks of Hong Kong’s featured busy work and entertainment lifestyles.
The reasons of buying Champion Reits
The Champion Reits were bought because of these two reasons:
- I am optimistic about the status of Hong Kong’s financial center and its economic prosperity in the long run. As long as these conditions do not change, I believe Champion Reits will be able to provide stable distribution continuously in the future and hopefully their asset prices will rise along with the inflation.
- Champion Reits accounts for just a relatively small portion in my “Fixed Income Portfolio”, and its price is not at the peak level recently as well. Plus, I found there is sufficient self-generated fund in this portfolio which is just enough to buy two lots of Champion Reits, so I just added them into my portfolio.
About HK Reits
I would like to give you a quick tip. Comparing to Singapore and the US, the development of Reits in Hong Kong is a bit slower and not very populously traded as stocks, and the types of industries of Hong Kong Reits are also much less compared to other developed markets. However, I think one of the greatest advantages of Hong Kong Reits is that you do not need to pay dividend taxes for Reits or stocks in Hong Kong, this is incredibly friendly for the investors. In contrast, if you buy the US reits, you have to pay 30% withholding tax for receiving any stock dividends or reits distribution.
Comments and sharing
If you have any questions, please feel free to leave a message or comment below, I will reply you. Or if you find anything incorrect in the article, please let me know and learn from you. If you find it interesting or it may help you in any sense, please share with other people.
