I must have read the report in a "glass half-empty" mood because I came away feeling a little negative. I noticed that NTA fell to $2.15, which suggested to me that they had purchased the properties above their valutions. After a little snooping around I found that these two properties were owned by Arena Property Fund:
... reflecting a 6.7% or $5 million premium to the current independent valuations.
If the buildings were used for services in a high-growth area (i.e. logistics re distribution centres supporting on-line sales, etc.) then we could expect valuations to increase above average and the NTA gap to be recovered over the short-term. With Woolworths as the tenants (read low growth consumer stables) the NTA gap may take some to recover. The low rents (below inflation) were another negative (as you mentioned stlamc), and with 7 and 11 years still left to run on the leases, so I doubt Woolworths will be in the mood to renegotiate
That statement surprised me. Were they weasel words to justify the above-NTA purchase? Given the properties are second-hand I would expect them to be below replacement value (if not just build them new, although that would take time).
I probably sound too negative with the above comments but overall I'm happy to see TIX on a growth track, and the NTA premium wasn't that great overall. The market certainly liked the news, given we closed at $2.30 today; what a recovery. And no one can complain about the dividend yield (one of the highest in the sector)
WOW Price at posting:
$35.95 Sentiment: None Disclosure: Not Held
TIX Price at posting:
$2.30 Sentiment: Buy Disclosure: Held
