## reverse thinking: BridgeRetail risk scenarios

Update — In a “normal” economy (Africa, Brazil…), properties tend to appreciate. However, Exceptions define the norm and are worth investigating. I’m yet to focus on those exceptions.

My past experience tell me to suspect just about every info about an investment, unless guaranteed in writing:

  • 🙂 Jill Lim’s returns are written into contract, though the payment date is less certain.
  • 🙁 AIA __projected__ return turned out to be over optimistic. I guess TokyoMarine might be similar

“Reverse thinking” primarily means bearish, pessimistic, risk-averse, more than cautious. However, we can also challenge the traditional risk-averse views and think optimistically! Be paranoid and suspicious but not irrational. It’s inevitable  that  some important risk will be missed or underestimated.

  1. Country risk including political/economic risk
    1. reverse of foreign investment, esp. from Chinese companies and the hot money
    2. Cambodia may not have more upward potential than BGC has. In 50 years it may not catch up with BGC.
  2. less Chinese-like — so Cambodia may not take off and surpass even 25% of Beijing’s psf valuations
  3. mall success — The mall may not become popular. Location is less developed less mature than BGC. Insulated for 10Y but capital appreciation and credit risk are still affected.
  4. liquidity — When I need the cash I may have to sell at a very unfavorable price.
  5. restriction on foreign investors — Right now Cambodia has no restriction on foreign investors like other countries do, but may impose them.
  6. fund repatriation — Need to fly over. Better than Philippines but still not easy to use the money. Less accessible.
  7. Credit risk?
  8. precious? — There will be other shops set up competing for tenants.
  9. concentration risk — too much into properties
  10. capital appreciation — may be limited because my purchase price is possibly inflated by the rental guarantee.
  11. USD may weaken
  12. 70% return over 10Y? but time value of money?
  13. water point — may not have higher valuation than other units

After 10Y I may not need to sell.