I have been watching the REITs for a while now, and sorry to say...

I have been watching the REITs for a while now, and sorry to say i think there is more downside to come.

A lot of people see the NTA as a good sign, however i think it is not worth the paper it is written on, the problem being is that the REITs that are struggling, AEZ MDT etc have high LVR's, meaning if they need to fire sale the assets, you may be lucky to get a few cents per share.

I see alot of people say well just sell the assets and give me the NTA and i will be happy, but the reality is they will not get anywhere near that amount of money for the properties.

I dont think alot of people realize that just a 5% discount on book value can reduce the NTA by 10-50% because they are leveraged so high. Meaning if a fire sale is required the shares are worthless. This is what is holding REIT's back.

GMG, MCW etc are holding value because they have these problems sorted out. Also a REIT really cant improve its value overnight night like a mining company can, property valuation increases take time, so there is little foreseeable growth in the stock, and when they cant pay out dividends there really is no point to own the stock.

I will look to buy AEZ at 3.75c, MDT at 5c and BEC at 5c, which i think they may hit in the next few months.