downtrend smashed, page-28

Well Stockland and ING Office Trust came out with their valuations today. Miacquaire Office Trust yesterday and Challenger Diversified Trust today as well as I am told.

I think we can see what the pattern is. Firstly in all media releases, management are not stating the headlien number, leaving it to the analysts and journos to look at the income statement itself.

E.g headline number for stocklands was down 59% yoy. Yet management came out with a 10% increase in "operating earnings".

This is just utter hypocracy and gutless especially given all of them put in their headline result into their media releases last year.

Second, none of them with the exception of Challenger are booking in the real cap rate increases. MOF, STocklands and Macquarie have booked in 20bp increases in their capitalisation rates. Yet the reality is that cap rates have increased between 50 to 150bp.

So based on this behaviour I suspect WDC will do the same. They will quote an operating figure of between 6-10% and increase their cap rates by 20bp.

If they do this, then my numbers suggest the headline profit will come down by about -30% yoy.

But all this is just stringing the pain out. There is still another 70bp to go and that is just taking into account the present. What happens if cap rates blow out further from this point?

Overall..very gutless by certain managers in the industry.