Double Bottom in LLC, page-54

With strong probability of rising cap rates, I anticipate further write down in property investments and equity accounted investments (which are also property!!).

Unless somehow inflation drops fast, interest rates will be higher for longer, this will increase cap rates and reduce property valuations which will reduce NTA. (Don't believe me, look at the massive discount the listed REIT sector is trading at (30-50% discount to NTA!!!)


This aint finished yet, cap rates still rising!!!


In addition, whilst LLC has a decent amount of hedged fixed interest rates, their June average cost of debt was 4.3%. As the fixed interest hedges roll over, expect this interest rate cost to rise significantly.




Any 'good' point is that gearing is low at 14.8%, but as development occurs will they draw on debt to complete the development. If they do, they will be drawing on debt into a rising interest rate environment.






Like I said at the start of this thread, LLC is a good trading stock, not a buy and hold.

For me I have traded in and out over the last 3 years.

For now I am on the sidelines watching, but not ready to strike yet. I am pretty sure Dec half year report will not be good. Those write downs will flow straight down to the P&L. Increase in interest rates will be a story for FY26 (see above chart)