asset sales, page-18

dc1,

Well, like most things associated with Centro, it's complicated. Centro published some data in the half year presentation.

On a book basis (p26), it is currently at 47.6%.

On a look through basis (p27), it is sitting at 75.2%.

These are the stated facts issued by the company and they are credible.

We do calcs on both for various reasons but we also adjust these up or down as time progresses. In my previous note, I was referring to look through because in the current circumstances, I am of the opinion that any overhaul will involved the whole group, not just the CNP balance sheet. We also need to account for the fact that CNP has guaranteed debt in lower-level vehicles which will now have recourse back if something goes wrong.

On a final note, it's also worth pointing out that a) Rents on the Centro US assets are NOT based on turnover in the individual stores (unlike Westfield) which means that rental will not decrease if store sales decrease, unless the lease is terminated b) Centro smartly built in annual rent rises to their lease agreements which will go part-way to countering any decrease in the valuation of their properties.

I recommend listening to the annual report webcast from Andrew Scott and the team on 9th August 2007 (my birthday) to get a feel for some of the strategic elements in the portfolio, most of which have been overshadowed by the current woes. Whilst an awful lot has changed, a lot still remains the same.