every year rents from their real estate assets are increased by...

every year rents from their real estate assets are increased by the increase in cost of living which has historically been between 2% & 3%.

as commercial property the valuation of these properties is then automatically re-valued upwards by the same percentage.

so 8% distribution (assured by the low interest rates AEU is now paying on debt) plus say conservatively 2% annual increase in capital equals a 10%. return - paid quarterly.

10% return with a high degree of security compared with 3.5% interest from the banks. it does not get much better than this.

in my view the share price of this stock has to increase substantially as more and more investors look for better returns on their capital than the banks can offer.

in addition, the ongoing demise of the australian economy, with the mining boom related industries tapering dramatically, will continue add pressure for even more interest rate cuts, further increasing the demand for stocks such as AEU with its assured high level of return.

gk.