this one can only go up!, page-17

Hi DD,

AJA is an excellent investment opportunity. A-REITs are rerating first given their lower perceived risk. This, IMO will be followed by internationally focused REITs once value investing becomes difficult to find with A-REITs.

AJA should be attractive to many:

NTA 93c

ICR 3.7x

WALE 6.7yrs

Occupancy 94%

FY10 Distribution (min guidance) 7c

FY10 Operational earnings 9c (my guess based on FY09 11.8c)
Non-recourse, asset level debt only

March 10 debt maturity (only 16% of total)

Available cash $31 mill + $30 mill temporarily held by hedge counterparty

Gearing of 69% will improve as assets revalue and $31 mill + surplus FY10 operational earnings (~9cpu-7cpu) are applied to debt reduction

Thus, AJA could expect over time to rerate as follows:

SP = NTA 93c
SP = FY10 PEx10 = 90c
SP = FY10 Distribution 10% = 70c

At current SP of 43c, FY10 yeild will be minimum of 16% AND there are very good prospects of strong capital gains, possibly in the order of 100% over 12 months.

AJA is still a bargin if your'e not already overweight in these (like I am!)

Cheers
John