Ann: Closes Adelaide - Announces Pasadena Leasing, page-5

re: Ann: Closes Adelaide - Announces Pasadena... Well put, Bly.

MOF had softened the cap rate Australian portfolio by 8.7% in the Dec-08 half. This deal was done at a further 6% discount. From this I can guess that the cap rate has softened by about 15% from Jun-08.

Given this is a small asset at $49m, I don't think this transaction is representative of the rest of the portfolio. Bigger assets (>$300m) will be harder to dispose of.

In the half year presentation, NTA sensitivity analysis was provided, which said a further softening of cap rate by 20% brings NTA to 43 cents at constant rent.
But this is assuming a flat rental income. If the rent drops, say 5%, NTA becomes 38 cents. If rent drops 10%, then NTA is 33 cents.

Is it still a bargain at 17cents a share? Not sure. But I can gain some comfort that the downside is IMO limited and already priced in.