my revised nta calc arrives at 1.711, page-9

Hi defabstar,

Thanks for sharing your work. I believe that CER offers exceptional value at the moment as do many of the A-REITS. However, I am not quite a bullish when it comes to my NTA estimates for 31 December and here is why:

With you point 1, I don't believe this will be written back and there may actually be some further write downs in relation to the Super LLC JV. Much of the write down at 30 June related to CNP's negative equity in the JV and this will not have improved since 30 June. The valuation at 30 June was nothing to do with going concern issues it was purely the equity of the JV which will not have improved.

With point 2, not only will the derivative assets no longer be there but they will now be liabilities. This will be the case for the interest rate hedges, income and capital hedges. This will obviously be mostly offset with the AUD/USD translation that will occur, but the net effect will be a reduction in NTA in excess of what you have calculated.

With point 3, this will be pretty close except that I expect that higher margins and fees charged by the banks will have eaten into this a little.

This one is the big one though. Your assumption that there will be no write down in the value of the properties will prove to be very wrong. In my line of work I have regular contact with valuers in relation to the values of retail properties both in Oz and the US. One comment that was recently made to me is that there isn't a retail property in OZ thats cap rate hasn't moved 75 basis points in the last six months. It is a similar situation in the US.

This is why nearly all of the property trusts on the Aussie market are retaining distributions as the fall in property prices is pushing everyone close to their LVR covenants with the banks.

Sorry to sound quite negative compared to your predictions, but even with the assumptions that I make the NTA would be in the vicinity of $1 and compelling value at 8 cents.

I will leave you with a positive though. The Super LLC JV will be retaining all of its income for a little while to come, however CER will gain the benefit of CNP income while they have negative equity. This will hopefully lead to a fast write up of CER's investment once things stabilise.