May not be very positive but at least it is not hinting at impending doom.
In fact, I'm an owner and have been more negative than this
key points * an analyst says the writedown will only be $250 m (the company has $1 bn headroom before it breaches its covenant on one $3 bn loan) * it says that the share price will be trashed if it does a rights issue (well I think we all know that. But also know that REITs are generally considered to be fair value when they sell at their NTAs. If the company did a rights issue of say a 1 for 1 @ $1 the NTA would drop $1 ok so $3.86 down to $2.86 The share price would probably drop to a dollar too But when the market realises that the company has a much stronger balance sheet than it did before it will start moving towards the $2 mark.)
Anyway Turi Condon appears to be a real journalist unlike coves like Michael West and Stephen Mayne.
read on v v v
GPT seeks $400m in new asset offering
Turi Condon, Property editor | August 12, 2008 LISTED property trust GPT is considering the sale of its $400million homemaker centre portfolio less than a month after putting $900 million worth of tourism and hotel assets on the sales block.
The trust owns seven homemaker or bulky goods centres, six in Brisbane and one in Sydney.
GPT shocked the market with a 27 per cent earnings downgrade in July, and is one of a slew of listed property groups to announce write-downs and earnings downgrades, with others including Valad, Mirvac Group and Lend Lease.
Later in the month, GPT put on the market its tourism assets including Ayers Rock Resort, its Queensland island resorts and the Four Points Sheraton Hotel in Sydney, with hopes of realising $900 million.
GPT head of retail Mark Fookes said GPT was "sounding out" market interest in the homemaker portfolio and had sold six bulky goods centres in recent years, reinvesting the proceeds in its shopping centre development pipeline.
In late 2001, GPT bid $206 million for the listed Homemaker Retail Group.
Mr Fookes said the Homemaker centres were bought on a yield 9.25 per cent. The properties, at Bankstown in Sydney, and Aspley, Cannon Hill, Mt Gravatt, Jindalee, Windsor and Fortitude Valley in Brisbane, were in the books at December 2007 on a 7.4 per cent yield.
"It has been a terrific investment for GPT," he said.
Mr Fookes said the centres had been revalued, but declined to comment on those values, saying they would be released in GPT's profit result later this month.
GPT has appointed real estate agents CB Richard Ellis, Jones Lang LaSalle and Savills to test out market interest for the homemaker assets.
However, investment properties have flooded the market as the credit crisis deepened, with analysts estimating secondary assets such as bulky goods centres could see at least a 25 per cent drop in value.
Tourism properties have faired no better. In a July research note, investment bank Merrill Lynch said prices for GPT's hotel portfolio could come in 10-22 per cent below the $895 million book value.
Asset sales appear the only possible road for GPT to reduce look-through gearing of 46.8 per cent.
Suggestions of a massive rights issue to restore balance sheet strength have been discounted, with one analyst saying GPT's share price would be "crushed, absolutely hammered" if the group moved to raise capital.
"Asset sales are the only way to go," he said.
Yesterday Babcock and Brown, which has a real estate joint venture with GPT, said it expected half-yearly profit to fall by up to 40 per cent as the value of its property and fund investments shrank in the wake of the credit crisis.
One analyst yesterday flagged total write-downs for Babcock of $250 million, of which about half related to real estate, largely the joint venture with GPT.
In its July update, GPT said it had about $2 billion of capital in the joint venture and expected operating income to drop from $141 million to $125 million for the year.
Operating income from GPT's bulky goods centres was not broken out in the July update.
Overall, its retail, office and industrial income was expected to rise from $502 to $516 million.
Income from GPT's tourism assets will also take a hit, down from $57 to $42 million, according to the update.
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