why the drop, page-2

Probably a combination of all 3

I wouldnt look too much into it. THe US sale was announced at the beginning of March and should be settled shortly (CER has mentioned mid year). As the news has been very thin on in recent months apart from a few takeover rumours, people have probably become a bit impatient and have subsequently sold down.

THe facts are CER is/will be a completely different beast once the sale is finalised and will have an NTA of at least 41c and gearing somewhere in the low 40s (from a current level of high 70s). I believe the NTA will be higher once the sale settles as:

- CNP will no longer be milking substantial management fees from CER. The NOI will be higher for each CER property
- Current yields on CER properties are at a very high 7.5%, which is higher than most of its peers largely due to high leverage/going concern issues as expressed in the audit report.
- Rental Income growing at approx 4% per annum, which means even if cap rates are constant at 7.5% for the June 2011 reporting period, properties should be valued upwards 2% (4% divided by 2)
- Synergies should a merger with the syndicates proceed

ANyhow any drop in share price just translates to a higher future dividend yield once a distribution policy is announced, which should happen at the very latest once the sale is settled.

Cheers