I have posted here before about wdc and some concerns about...

I have posted here before about wdc and some concerns about them..now to be fair, im shorting them..so take of that what you will, but would be a happy buyer today if the numbers worked out...but I dont think they do and so Im putting my money where my mouth is.

Consider this:

Aussie property on my numbers are valued on a capitalisation rate of 5.75% (based on their 07 accounts)

The U.S at 6.0%

Uk at 5.4%

NZ in the 5s if I recall.

For the states I believe that based on comparable sales it would be fair to now value them at 6.5%.

And Australia at 6.0%.

The UK could easily be over 6% and NZ at 6% easily.

But its the U.S and the Aust assets that weigh the most.


So taking into account those cap rises (lets be nice and make the states at 6.25%) and assuming 6% rental income growth). Plus development profits at $900m and fund ,management at $100m, WDC might actually post something like a 20-40% decline in their headline profit. The reason is that 50% of the 07 profit was based on revaluations and I cant see any chance of posting such valuation gains again for this coming reportng season.

Thats not to say they wont be able to keep the distribution. I think they will (though it will be tough given that their current ratios have been running at 0.3 on my numbers). The question is, how will the market react to at 20% decline in the headline profit?..assuming I'm right of course. And like i said, that is based on the conservative side of my numbers..