Q: Please comment on earnings. Is it worth holding?
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5i Research Answer:
Cash flow per unit decreased 2.5% to E0.039, due to higher interest and tax expenses. Occupancy remained high and rose for both the residential and commercial divisions, at 98.7% and 100%, respectively. Monthly rents rose 7.1% with strong turnover metrics. Net operating margin increased. Payout ratio is 71.3%. We think the new CEO (from March) is doing a good job in a tougher environment. Our main concern would be a European slowdown and high interest rates. The latter seems to be abating, but the former is still an issue. At 14X cash flow, it is neither cheap nor expensive. We think it is OK to hold (for income), though some patience may be needed here.