back in the GFC days the interest rate was above 5% and credit...

back in the GFC days the interest rate was above 5% and credit is limited to refinance

things have gone in the opposite direction for the past decade and with QE and almost limitless credits in the market, it will be silly not to take on debt

there will always be black swan event but with the quality of clws portfolio, It will be silly to not take on debt. Look thru gearing of 42% is acceptable IMO…. But any higher and I won’t be comfortable with that….. having your money invested with anyone always carry risk…

I was looking at various reits in the asx and other high quality reits are either trading at premium to nta or too concentrated into one particular type of property… for example, bwp is obviously just Bunnings warehouse and yes it has a very high quality tenant, long wale etc but if Wesfarmers decides to vacate one of their properties, it is extremely difficult to find another tenant to take on that property…. We have a Bunnings warehouse sitting empty for over 5 years in my neighbourhood when old Bunnings relocated ….. this risk is not something I’m willing to accept… plus it’s always trading at premium…

clw on the other hand has a very diversified portfolio and all properties are located in central locations…. Which can be converted to alternative uses should the old tenant vacate… the ones are that purposely built for the tenant has a very low likelihood of vacating since the tenant has spent so much money on it and it will cost them millions to relocate …
eg coles distribution centre

with Clw having such a diversified portfolio, there is no point buying other reits to diversify…. It’s a one stop shop ….