Now ... I do not (necessarily) agree with the property write-downs by way of property valuations, because if income for the Group before earnings & tax rose by 8.8% and NOI rose 2% a capitalised valuation should not show a decrease/write-down.
If a comparable method was used rather than a capitalisation method (in Australia for example) you would have to find sales of other shopping centres so that you could compare values and they just have not occurred. Therefore, at least in Australia, a realisation value should have to be close to book value and maybe even above.
I do not know the American property market, but I would assume that from a vendor's point of view a capitalisation method should show a similar sentiment based on the percent of occupancy and the income derived. Certainly there are few one-offs with low occupancy (and I don't know the reason for that ie; if they are being rebuilt or whatever) but the majority of properties show a very healthy tenancy.
So ... the actual basis of the valuation write-downs at face value (without having access to the detailed data), seems quite puzzling to me!
Cheers, Pie :)
CNP Price at posting:
0.0¢ Sentiment: None Disclosure: Held
