I received the email from Tony Pitt, in respond to my enquiry....

I received the email from Tony Pitt, in respond to my enquiry.

Dear Alfred,

Thank you for your enquiry.

1. 360 capital has not disclosed the estimate reduction or interest expense saving under the new debt facility;

A/    Currently AJD has $25m and they are paying 4.77% p.a. so $1.192m.  Under the new facility the rate will be 4%, we will distribute $51.75 increasing the interest expense will increase to $3.0m p.a.
Currently AJD is geared to 9.5%, very low and inefficient.  It has a great lease covenant in Next DC and we are proposing to increase gearing to 34% which is about average for AREITs.

1. The capital distribution will be partly from saving of management fee, im very happy with it; But most of them will be funded by new debt and gearing will be higher than previously;

A/    yes savings will all be passed onto securityholders

1. Therefore, as a unit holder, I concern about the overall effect for the distribution in the future, rather than 2018`s one-off increase: How much is the interest expense saving if debt level remains and interest rate reduced? How much the interest expense will increase under the proposed debt increase and interest rate decrease?

A/    see point 1 above

1. Personally, as a long-term holder, i do not like the capital distribution but i understand it does have huge attraction for speculators/traders.

A/    360 Capital is not a speculator or trader.  We see our investment in AJD as a long term investment and are very attracted to the data centre real estate sector. The capital distribution is to increase the return on equity which in turn should increase the trading price.  I think another important point is AJD trades on the highest yield of any global DC REIT and is not marketed by current management.  We want to increase investor awareness to this exciting asset class.

Hope these points help and happy to discuss if needed

Kind regards

Tony

Tony Pitt | Managing Director

I will reply him with few more questions and i hold investor can share your thought and opinion here.