centro stocks in halt...in smh, page-13

I couldn’t be happier with the news

Put aside the fear mongering by Centro and lets look at the cold hard facts.

Our current NTA: 44.5c
Gearing (post repayment of CMBS debt in sep): 40%
Value of properties (June 2011): $1.8b
Look through Interest bearing liabilities (post CMBS debt repayment): $735M

NOI projected growth: 3-4%
Occupancy: 99.5%

Major tenants: Coles and Woolworths

Weighted avg cap rate of properties: 7.26%


The mkt cap difference between 44c NTA and 25c (current share price) is $437M (19c x 2.3b shares)

You would effectively get more than the current share price if CER disposed of its properties anything more than $1.36b ($1.8b - $437m)

If CER properties were sold at a massive 25% discount on the already undervalued cap rates, you would still get 25c per share. This would give the properties a cap rate of 9.7% (7.26%/(1-.25))

Even in a worst case scenario, we are going to get a much better offer for the properties than a 25% discount. The US properties we sold got a cap rate in the low 8s!!

Don’t fret people. CER is a gold mine. Unfortunately the operators of the mine have no idea what they are doing.

Im still as excited as ever about the future!

Cheers