Ann: Independent Valuations and Leasing Update, page-7

Alright so how about we take a look at what a further cap rate expansion of 5.75 would look like?

That would be a further 0.42% which should be slightly over 20 million if my maths is right (I'm just going to round up or down to the nearest million for simplicity).

This would reduce the portfolio value to 205 million (plus the Home HQ stake which there has been no further commentary on)

Minus debt of 83 million gives us 122 million net assets and then divided by 144 million shares on issue would give us an NTA of 85 cents (discount to current SP of 20 percent).

My average price is 87 cents so I'm down 20 percent on TOT.

I started buying prior to the move to a direct REIT when they were essentially a fund of funds trading at a big NTA discount (I was an URB shareholder and that takeover brought my attention to these guys).

I actually understand the change in strategy to hold properties directly as I don't think they were ever going to get much traction in the market holding a handful of strategic stakes in other REITS.

I think most of us have been caught out by how fast interest rates have risen so that's not something exclusive to TOT management but I would say that the ultra tight cap rate they acquired the properties on left very little margin for error without strong rent rises which it was already clear in 2022 were going to be very unlikely in the office sector. I think they might have been so keen to change the funds direction that they jumped on this deal rather than wanting to wait any longer.

I'm seriously considering topping up at this price and will just hold for the dividends until something changes with either property values or the actual fund strategy.

360 are a really interesting company and have a long history out outside the box thinking so I don't think they'll just let this struggle along at a discount of between 20 and 30 percent to NTA forever.