"I'm a relative REIT novice so happy to be corrected but I had...

"I'm a relative REIT novice so happy to be corrected but I had assumed there would be limited discretion open to Directors of a REIT in valuation compared to some other types of companies (due in part to the Trust Structure). "



There is nothing unique about a trust structure when it comes to representing the carrying value of assets at fair value. That standards for fair value accounting requirement are universal across all companies.

I discussed this very technicality with the company some days after the asset write-down downgrade was announced.

Per the company's accounting policies (Refer Note 3 to the Accounts of the Annual Report), the directors "take into account the latest independent valuation", but are not under obligation to adopt the independent valuation.

But in practice, it would be difficult to avoid a qualified audit if there was a major discrepancy in carried valuation, compared to that of the independent expert opinion.

But it is possible for the directors to .

For example, it might happen that circumstances - under which the independent valuation was struck - had changed materially by the time it came to the signing off on the accounts by the directors.

No matter.

The stream of sustainable Free Cash Flows is what determines the fundamental value of a business; not some so-called "experts" marking stuff to market every 12 months with the attendant whip-sawing of the valuation.

Frankly, in my mind analysts coming up with valuations for properties are no different to analysts coming up with target prices for listed equities.

I take zero investing cue from the latter, so I see no reason why I should somehow take into consideration what is said by the former.


.