Ann: Acquisition and Equity Raising, page-5

hanabi, people do better analysis when in a glass-half-empty state of mind, so it's good of you to note these issues. I also saw the NTA had dropped to $2.15 from $2.23. And thanks for searching for Arena's announcement. Here are a few thoughts on that and valuations:

1. The TIX PDS indicates that TIX paid 100% of the market value estimated by CBRE Valuations (see report at end of the PDS, and on pg. 24 TIX has "100% beside valuation). Likely Arena had its own independent valuation which stated a higher value. Similar to house selling -- seller's realtor typically provides a higher estimate value than if a buyer has a realtor estimate a property's value.

2. The larger property has an 8.25% cap rate, but TIX says the annual rental is below market. Since cap rate equals annual rental/property value, the property's value (NTA) is probably similar to other TIX properties. The smaller property has a cap rate of 8.75% (above TIX average). I fact, TIX's cap rate falls very slightly (from 8.55% in April to 8.5% now), suggesting comparable NTA for newly acquired and previous properties (particularly given lower annual rental than market rates).

3. The CBRE valuation predicts inflation at the NSW property area will be slightly below 2.5%. Inflation at the Qld property will be slightly above rent increases (2.62%). More important, "market rent growth" at both properties is much higher than the 2.5% increases (3.2% and 3.6% respectively), which relates to the passing vs economic rent gap. CBRE's report predicts a revised rental increase rate of 3.5%.

4. I agree that below replacement cost may be the norm for warehouses and most commercial properties. As you point out, TIX may be sugar coating this a bit.

5. I also wouldn't hold my breath on Woolies changing its lease yet, but depends on how much Woolies saves by having B-Double trucks rather than current single trailer trucks. The economics might be enough to negotiate a change.

As for today's (Friday) uplift. It was real volume, so likely real demand. Maybe some instos jumped in to pick up what they missed out on from the insto placement (oversubscribed). I've seen that happen recently (TCL). Or maybe the cap raising increased insto awareness of TIX (which is still under most radars).

Finally, the 2015 guidance was spot on my prediction (19.2 cents/share). Also, nice to see the predicted 2015 deferred cap gains around 45% (similar to 2014 estimate).