#90: Coronavirus Investing Series, Part 8 | Jeremy Raper | Japanese Hotel REITs

This is Part 8 of a special Coronavirus Investing Series. If you
have not listened to Part 1, please click here to get
the overall context/market overview during this unprecedented
time.


You can also listen to:


Part 2

Part 3

Part 4

Part 5

Part 6

Part 7



 


In this episode of The Intelligent Investing Podcast, I sit down
with Jeremy Raper to chat about a potential opportunity in
Japanese Mall REIT's which have been hit pretty hard during this
coronavirus pandemic. 


 
Overview

If you are willing to look through whatever happens in 2020 and
assume we go back to a normalized environment in 2021, then you
should be looking at some of the most beaten-down sectors.


You have to ask yourself a few questions when valuing names in
the most beaten-down sectors of the economy:


 
Is the equity going to survive? What losses are they taking
along the way? What does that post-corona-world look like?

 
Japanese REITs

Japanese Mall REITs fall within the broader subsector of Japanese
REITs. REITs are real estate investment trusts. Furthermore,
REITs must pay 90% of their income as dividends. 


 
Japanese Hotels

Why Japan hotels in particular? Japan has been under-hoteled for
a long time. There has been a shortage of hotels and that had
been rectified somewhat on the runup to the Olympics. 


However, the hotel fleet is still pretty tight. 


 
Two Cheap Japanese Hotel REITs

On this episode, we discuss two Japanese Hotel REITs


Japan Hotel Investment Corp

Invincible Investment Corp



 


Both REITs trade at fractions of NAV and high normalized cap
rates.


 
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