a year in gpt, page-3

I believe that rationality will eventually prevail.

Rationality means that asset prices reflect their earnings capability. GPT has amended its primary hole - being its short term obligation to the banks. In the medium term its operational KPIs are, to my understanding, excellent.

GPT will continue to earn its $400m - $500m from its core portfolio, and sell off non-core assets when it realises prices that make the transaction worthwhile.

Current market cap is 4.5b odd - I expect the proceeds of sales to be applied to further reduce debt - which will increase yield. I am expecting a yield of about 9%-10% with a capital loss of 10% at current prices ... with the yield to increase given the current divestment strategy - proceeds of which will be funneled into debt reduction.

I further expect over time, with a stable yield that is increasing, and some silence from the newsroom (its a conservative company, remember!) that the buyers to be will gain some faith in its long term stability, at which point the market value should increase inline with new demand.

I hope GPT to be significantly better than holding money in the bank.