🦎 CHINA REIT YIELD VS. THE REAL COST

There’s a quiet tax sitting inside many China-heavy REITs. On the surface you see 6–7% yield. Under the hood, you’re looking at 40.7% gearing, 2.8x interest cover and a 2027 refinancing wall where higher interest costs meet falling rents. That is when your “passive income” becomes the buffer to save the balance sheet, not your retirement.

Gearing at 40.7% already fails my <35% Forensic Standard. An ICR of 2.8x vs my >4x rule means for every S$1 of interest, there’s only S$2.80 of profit. Add in negative rental reversions and divestment gains topping up DPU, and you get the classic Yield Trap: your income looks fat, your capital quietly bleeds. Compare that to a Sanctuary like MIT with a 5.8% yield and a 1.1% surplus over my 4.7% hurdle. Same headline ballpark, totally different risk profile.

Gearing <35%. ICR >4x. Yield must clear 4.7% to count as a Sanctuary.

📺 YouTube: https://youtu.be/PZqiWfav4xM

📩 Substack: https://investingiguana.substack.com/p/capitaland-china-trust-clct-divestment

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