Some comments made in the webcast:1. ResetData lease a higher...

Some comments made in the webcast:
1. ResetData lease a higher rent ( per sqm ? ) compared to office and to other Data Centres.
2. Reason higher than other Data Centres is cooling method.
3. Yield on ResetData close to 14%.
3. PAYOUT RATIO current 86% will TREND DOWN OVER TIME, no guidance on the ratio for FY26.
4. Like for like NPI growth 3% .

I'm a positive HOLD.
I expect a good return over the next 5 years.

However the debt is too high for me, specifically ICR = 2.5 to increase my shareholding.
As Tarvold mentioned 98% of the debt is hedged.

WACR = 6.77% +.19% , I think may go higher at FY25 to near 7%.
GOZ guidance for HY25, Office WACR =6.99% +.35% .
CLW HY25, Office WACR = 6.8% +.2%

My opinion the distribution in FY26 may be reduced given the lower payout ratio UNLESS FFO increases enough to offset this.
How can FFO increase ? rent increases, increased occupancy ( currently 92.2% ), ResetData starts paying rent.
Any benefit to FFO if RBA OCR and BB rates decrease ?
98% of the debt hedged for 1.9 years with WACD = 5.4% .
If the cost of debt before hedging is a BB rate plus 2% then the OCR may need to reduce to less than 3.4% to get benefit ?

Compared to other Office REITs , COF has a higher payout ratio = aggressive distribution.
On FY25 guidance GOZ's payout ratio = 80.2% of FFO , ECF = 82.0% of FFO.
CMW does not give FY25 guidance but in FY24 when debt was a problem they paid 81.8% of AFFO ( not FFO ).
COF HY25 AFFO = FFO - maintenance capex - capex incentives = 34.697 -1.4 -1.9 = $ 31.4M
Using GOZ ECF CMW as a guide COF HY25 distribution would be between 4.31c to 4.65c and not 5.05c .
( For COF 80% x FFO = 80% x 5.8 =4.65c and 82% x AFFO = 82% x 31.4 / 597.3 = 4.31c )
If debt was much lower ok to payout AFFO = 5.2c.

I note maintenance capex and capex incentives were much higher in H2 FY24 compared to H1.
No guidance given ie declined on maintenance capex and capex incentives in H2 FY25 after a question was asked on the webcast.

No certainty the COF's distribution in FY26 is cut, just my opinion current distribution is aggressive, debt is too high and given the webcast comments on the payout ratio maybe reduced.

I'm a shareholder in the following REITs, COF CMW GOZ REP ECF.