Axiom directors have been saying for a while that their focus is on increasing the NTA of the stock.
However, one wonders whether this latest deal with the SA Gov't will reverse the company's book value. The remaining land in the World Park development has been valued around the $7m mark for some years now. It was slated for the construction of two campus-style office buildings (with a total of 24,000 sq.m mooted office space).
Agreed, Adelaide's office market is very slow, with few offices going up around the city - understandably so, with a 15% total vacancy rate. But this latest deal, based on the sketchy press release, confirms that only 8,000 sq.m will be constructed for the balance of the site (not sure whether this figure includes the on-site car park or not). Even if the car park is additional, this appears to be a huge scaling down of the original proposal.
Also, Axiom have alluded to holding some properties for a long term income stream. This purpose-built development, with a Government agency as tenant, appears to be secure enough to fit in with the build-and-hold intentions of the company. We shall see.
AXI Price at posting:
3.9¢ Sentiment: Hold Disclosure: Held
