The 80 cents mentioned in the original post is UBS's estimate of...

The 80 cents mentioned in the original post is UBS's estimate of assets. This is after UBS has applied a quite large discount to the Net Tangible Asset backing of CER.

The last round of independent valuations applied a cap rate of around 6.5% to CER's US assets. UBS has used a 9% cap rate which is assuming that CER's assets have had a much larger discount applied than market evidence is showing they should. On average cap rates have only moved on average .2% across the board on US retail properties over the last six months.

On top of the large discount the have applied to the Cap rates of the properties (Which gave the 88 cents) they then subtacted another 10% to account for financing and other risks. So after throwing nearly every discount that they could at their CER valuation they still came out with 80 cents.

It should also be noted that one of Centro's unlisted trusts (MCS36 from memory) recently sold one of it's US centre for 30% above book value. There will be a couple of gems like this in CER's portfolio and I would expect that a couple of assets which received the greatest interest will be sold to bring CER's gearing level down slightly. Not that the gearing is too big a problem as they are only currently around 60%.

In short, I think that UBS is being concervative with its 80 cent valuation, but I can understand their caution while there is market uncertainty present.