regarding NXT...thats where it becomes a little grey to me...
im not sure if they are selling the land only... or land / building / IT equipment.
I thought DC's used to have about a 18 to 25% return if they were privately built.... that was about 3 years ago. It would be interesting to see what type of yield the NXT trust is marketed at.
I really didn't think they needed to do this. I am assuming the yield from a data centre is higher than the bank interest rate... and thought that they would build... wait 6 months to realise a steady yield... then go to the bank and ask for more funding.
All the while building a cash flow positive business model. Then I assumed that in five to eight years time all debt could be paid down and then they would be able to then sell the infrastructure into a trust.
The fact that they are selling it into a trust now makes me wonder whether the returns are lower than they first envisioned. I am sure revenue is strong... but costs particularly construction and electricity may be higher than they forecast.
MAQ Price at posting:
$8.00 Sentiment: LT Buy Disclosure: Held
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