GDI Property Group

ASX:GDI

GDI Property Group

ASX:GDI
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$0.590 (0%)
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#373
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#ASX Announcements
stale
PeregrineCapital
Added one year ago
View author's company report

Pretty positive announcement, definitely ticks a few boxes.

Just need some good leasing outcomes.

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Valuation of $0.600
stale
PeregrineCapital
Added one year ago

I've done some calcs based of this slide in the FY23 results presentation.

Even if everything gets leased up, the upside in terms of cashflow isn't that favourable compared to some other small office REITs .

The current distribution (5cpu) is only sustainable if some strong leasing outcomes come through.

Comparing this to COF and ECF which yield circa 9 and 11% respectively (but probably falling to 8% and 9% in FY25), I'm not sure GDI is worth it at this stage, given the amount of success they'd need to achieve to generate better cashflows than COF and ECF.

My val would change if management entertained the idea of some divestments.

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#Bull Case
stale
PeregrineCapital
Added one year ago
View author's company report

8/8/23:

This looks cheap but the market hates everything about it.

It's office focused, it's Perth focused, it's relatively concentrated in terms of asset exposures & it produces lumpy cashflows.

Most of the value is in 3-4 A grade office buildings, a few of which have just been completed and are starting to fill up now.

I'm going to wait for FY23 results to come out to do a proper analysis, but this is the kind of dumpster diving that gets me out of bed in the morning.

I reckon NTA will come out around $1.10 in the FY results.

That's obviously not what I think the present value of the future cashflows are going to be worth but will be interesting start point.

Most of the current valuations use discount rates which are above the marginal cost of debt, although they do seem on the high side on psqm basis.

More to come.

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