Yep Aust malls are performing excellently in the words of Lowy.
Occupancy levels are still at 99.5% across all major malls in Australia. Rental growth on new leases is still on the up. I think WDC reported about a 5% rental growth on new leases for the march qtr. Retail sector had a bumper christmas and post christmas season. With the stimulus package kicking in this month, youd expect the retail sector to have a few more promising months ahead. Also interest rates being at historical lows in Australia has significantly decreased the interest bills of most REITs. Just compare the 31 Dec 08 and 30 June 08 supplementals for CNP/CER to see how much they are saving on interest.
I think its a joke that commercial property prices have been written down in a big way in the last 12 months, yet the DCF of these properties are increasing and will continue to increase throughout this year.
I personally cant see occupancy levels falling below 98% in Aust malls whether they are large indoor malls or your local neighbourhood malls.
To sum up I reckon Lowy is right on the money.
Cheers
CNP Price at posting:
6.7¢ Sentiment: Buy Disclosure: Held
