Wednesday, October 25, 2006

Record Realty buys 22 US buildings

Record Realty Ltd (ASX:RRT) will have $A2.1bn of assets in its property trust after completing a deal to buy 22 US office buildings. The agreement to purchase the buildings across 13 US states from America's Government Properties Trust was announced on 24 October 2006. The FBI is among the tenants, which are all US Government agencies. The group expects to meet
its announced distribution of $A0.11 for 2005-06.

This has come just after major warnings from a US property guru that Austrlaian firms are overpaying for office buildings in the US. Is it a good move ? Well providing the company has not stretched itself to buy these properties I see no problem with acquisition. They are getting good
tenants across a number of areas of the country. These buildings should appreciate in the future and add value to the company.

RRT is priced reasonable with a very lowe PE ratio and PB ratio. At this stage I need to analyse the company further to see where its money comes from and where it goes to and how this deal will affect its cashflow and earnings.

Record Reality is a property fund with equity investments in buildings, with long-term leases to premium tenants, such as governments and blue chip companies. The Fund uses a leveraged investment approach where the funding arrangements for these investments will be provided by third-party investors. The responsible entity of the Fund is Records Funds Management
Ltd (RFM) a wholly owned subsidiary of Record Investments Ltd. Allco Management Limited, an independent financial services group that specialise in structured finance solutions, manages Record Investments.

Good Luck Investing

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