The NTA of the ECF is $1.18. It is already trading 13% above its NTA. the improving market conditions in perth at time of purchase, is all in that NTA.
also the other reits are much bigger. Small size of this reit , itshould be discounted. size is the key for REITs. the size of this reit is suboptimal circa $300m in office assets? The nearest metro one is GDF Garda, same dividend 9cps (as ECF pds) priced at $1.40 circa urrently, but has sizeable melbourne holdings so demands a premium to ECF. ADI/CMA are the next best fit comps around 5.6-6%, but are materially larger and have sydney/melbourne.
to increase size, and get sydney and melbourne which are better longer term for ECF, they will have to buy at lower cap rates reducing the yield anyway, a chicken and egg scenario.
Improving perth market conditions yes, but the asset on a micro level has huge yield decrease potential, also the tenant cimic will most unlikely renew the lease at expiry leading to downtime and other issues.
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