one of my favs, page-5

But you are not buying just bricks and mortar so why fret or talk about the NTA value of the buildings alone!
You cannot just purchase several hundred well placed, well run, profitable child care facilities, with a cash backed guarantee of future rent and controlled by a stable and experienced managing group. Its not for sale anywhere and it would take a hell of a lot of setting up.
Its not just the static buildings that dictates the share price, its the business that holds and utilizes them that sets the market value and then occasionally re-evaluate and re-value them.
Now I'm not saying AEU will trade much higher, but it could. It has a very sound business model, with understandable property valuations. Try buying a childcare facility for $1.1 million paying $100,000 PA with a 9 year lease! You'll pay $500,000 for a flat in a lot of Australian cities right now and possibly get $30,000 PA rent but it wont have an average covered building footprint of 500 square meters or be on its own 1/2 acre freehold site.

Then think, what if the recent property rise, the latest stock market run and inflation figures still hold, and noting there's an awful lot of newly printed money around the world that has to end up somewhere you could write an interesting scenario for AEU.

If you revalue the entire portfolio from $1.1 million up to $1.3 million per facility, this reduces the debt to 32%, easily allowing them to purchase more facilities within there existing debt covenants and takes their NTA value to $1.67. With a distribution of 13 cents foreseeable at some point and some very wishful thinking of $2.00 per share, this still gives a new investor a yield of 6.5%, well ahead of a term deposit account and its also directly CPI linked to inflation.

From their own web site:
" it is reasonable to assume that there remains some value yet to be recognized in the portfolio which may otherwise understate the Fund’s NTA. This may apply to up to approximately 50% of the portfolio whose valuation was undertaken prior to October 2011."


Now this may take three years, but that's a potential growth of 7% PA on property valuations, 14% PA on share price and they would still be paying 7% PA on currently priced distributions, which would happily pay the loan on the money you borrowed to buy them. I can see no great reason to sell any of them right now, except for the fear of a full market meltdown.
If you combine them with any Blue chip shares then ANZ will margin lend at 50% to your holding too, with their only issue giving a higher rating being liquidity.
Now I am aware that all of the above has an awful lot of ifs and buts, and although I'm a strong holder, I'm not buying, but this is certainly not a dead in the water, "no growth stock" in my mind.