my revised nta take is now 1.32, page-16

Hi Sacrophagus

I do place importance on the gearing but I dont think the gearing ratio is as important an issue as it was before it got the extension.

When a company has going concern issues, more importance is placed on the NTA or gearing ratio. Given CER's future is fairly secure, I think distributable income and the ratio between interest/rental income is a more accurate reflection of CER's financial strength.

As weve discussed on here, interest repayments make up about 42% of total rental income.

That is a very comfortable income to interest ratio.

Its a bit like if you buy a house. Its geared at say 65%, you are paying interest of $400 per week and earning rental income of $1,000 per week.

To be honest given there is such a variance between the interest/rental income ratio vs LVR, it shows that CER's property portfolio is immensely undervalued.

I think we'll see the gearing ratio somewhere in the mid to high 60s mainly due to the hedging writedowns.

Also looking back over the ann made on Friday, I may have jumped the gun. The ann says the valuation changes are based on a comparable analysis of 30 Australian properties.

The sale of those properties last year have probably been reduced from the 30 June figure in the ann.

Karringal it looks like is still recorded in the $1.75b 31 Dec 08 valuation figure even though it was excluded from the 30 June 08 accounts. Im still waiting for CER to get back to me regarding this issue.

Even if the Aust properties have reduced in value by 10%, it does not really CER from a distributable incme point of view. Retail sales had a strong second half of 08, which should translate into higher rental income for CER. Aust rental income is correlated with sales turnover of its tenants.

Occupancy levels are still at 100% at most of its centres also.

The Australian portfolio has performed well and I expect it to continue to perform well especially given its non-discretionary focus.

Sorry if Im babbling

Cheers