Westralia Square (including WS2) 100% leased makes it very attractive to institutional buyers. Yield will likely blow out to 6.5% by the time that happens.
They'll probably sell 50%, and hold onto the other 50%. $200m equity proceeds should be sufficient to fund the Mill St. development and their foray into mining accommodation.
Upside from releasing on the back of an improving WA economy should significantly offset weakening cap rates across the portfolio. I don't think those rates will soften as much as those in the Eastern capitals. GDI's extraordinarily concentrated bet on Perth's commercial recovery will pay off handsomely I suspect, provided they time their exit astutely.
The market isn't pricing any of the capital upside into the stock, being too focused on the current yield.
GDI Price at posting:
78.5¢ Sentiment: Buy Disclosure: Held
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