Sydney fullfills that original growth/return thesis. That you can plough large amounts of capital in and get a high/low risk return. You are de-risked as the DataCentre quickly hits breakeven, then starts heavily contributing to positive cashflow.
Melbourne atleast initially showed the exact same promise. With M1 filling quickly and hitting ~full utilisation and then the wheels fell off around M2. That disconnect has never been explained.
$100M's have been invested in these other regions and unfortunately they have heavily dragged down returns. The company has diluted shareholder's by continually raising excess capital to fund these investments.
Even to the point of distracting the company from its best performing market, Sydney.
In my opinion, those investments needed to be delayed or at the very least more modest.
At the same time they have invested all around the country, a lot of other companies have been ploughing into Sydney. They were essentially slow and to moderate on their investments in Sydney compared to the competition making it an easy investment decision for others to set up shop.
I think they missed a few acquisitions along the way to.
NXT Price at posting:
$10.78 Sentiment: None Disclosure: Not Held
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