lu888: The reason for the valuations is to do with the financial...

lu888: The reason for the valuations is to do with the financial health of the business rather than its operational KPIs.

Its in the ridiculous position of probably making enough money to pay the interest, with growing rentals and tenancy - operationally sound - BUT - the idiots who put the finance together did so against the underlying asset value being >= X ... and now that they either cant put a figure on X or instead have decided that X is actually worth < X the financial situation of the company is in breach of most of its banking covenants.

That, in theory means that the bankers can come knocking at any time and either ask for their cash back (due to breach of contract) - or the keys to the property. They are unlikely to ask for the cash or the keys as long as interest is being paid - but I believe that if/when times turn good, they have the right to jump the queue and demand their cash (due to breach of contract) or, the keys to the property ...

That sort of thing spooks investors.

Personally, Im looking forwards to the day where loans are written against fictional asset values becoming a relic - replaced with contracts written against operational KPIs - MUCH MORE SUSTAINABLE AND NATURALLY HEDGES AGAINST DUMBASS ASSET PRICE BUBBLES.

...see signature...