CMW - Cromwell Property Group

[Lizard]

A good quality Aussie Property Trust. Yield is over 9.5% at current price of 73cps. Forecasting 7cps total div - usually pay out quarterly, so good for income.

For NZer's large enough to be within FIF regime, although unable to use franking, income will be assumed to be 5% of 31 March share price. Based on current s.p. and 28% tax rate, gives a net yield of around 8.2% by my calcs.

Gearing approx 50% - high by current NZ standards, but not so much by Aussie. Trading just above NTA.

The manager is in house and is increasingly managing external assets. Will generate additional management revenue from 2013 which should help to support earnings and dividends.

For NZ income investors, could be a good geographical diversification of REIT income, with net yield ahead of the typically 6%-7% ish currently available on NZ property trusts.

[Joshuatree]

Agree, have been in CMW before. Re 85 % of gross income leased to Govt or listed companies... Contrarywise patersons have a sell on CMW. They say CMW port generates most earnings from the Office port,have high gearing and slim debt covenant headroom could be an issue if prop markets double dip. Also on The Bull(its free) is an int article re a predicted big correction in Real Estate Home prop values suggesting aussie prop slow down just beginning with prices down 4.8% in the last year in the ave home price.Predictions of 40% drop or more.Int List seeing prices all over the world; certainly makes aussie real estate look expensive in comparison.

[Joshuatree]

Sure was a great buy @ 73c Lizard. Still a good one now too, having drifted back to re 94c from a high of re $1.10 in may and $1.05 september. Looks like turning in to a down trend atm to my untrained eye. Still re 7.7% yield. Mkt worrying re rate rises next year?.

The big correction in real-estate values predicted above didn't happen.