please explain why, page-40

I take back my 25c target. Overly pessimistic

I did some spreadsheet analysis, basically plugged in a copy of their balance sheet and P&L and then did the following.

For 2008, kept all the expenses, financing costs and rental exactly the same, and just messed with the valuations in Australia, Germany, and the US to do a sensitivity analysis. I revalued Australia up by 2%, Germany/Europe up by 2% and USA down by 15%. Then I took those revaluations to the P&L and got an overall loss of $100.6 million for the year to June 30,2008.

This brought the NTA down from $1.09 to $0.86 per unit. Then I did a sensitivity analysis and played around with moving the US valuations around. Every 5% extra devaluation of the US properties seems to take 11 cents off the NTA.

So if you are buying now to own something worth 86 cents in June, then you might want to take 6 cents off that to get the price you would pay now. Then you would want to pay less since you are expecting a risk premium for this highly leveraged stock. Take off another 10 cents say.

So that brings it back to around 70 cents value today.

If you believe only the US commercial property will take a hit then this seems about the right price to buy. If you think 2 of RRTs markets will downturn, then I'd still stay out.

Id love to hear how other people would value this.

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All my humble inexpert opinion as usual. Do your own research and analysis
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