You are right about that. And I think in terms of operating result the point you raise about rental increases is a particularly important one. The major (and ill-defined) concern I have is about rising yields and their effect on the unit price and the underlying building values. Presumably, rising yields mean that the valuation yields on the properties increase - reducing their value. But I am not sure how quickly or directly this clicks in. Much of our NTA increase has come from falling yields pushing up valuations - not sure how quickly this happens in reverse?
I note that CMA is currently trading at a discount to NTA of around 5% - is this a sign that punters expect the portfolio to fall in value? Or that they see other investment yields as better value?
For now, I am prepared to stick with CMA - partly because it still has a good yield and partly because I have some capital gains which will be realised at the wrong time if I sell now. Of course the capital gains won't be such an issue if we do ride this downwards :-(
