Forum Archive Index - November 2003

["david.gibson" <david.gibson@k.co.nz>]

In my view - AIA is a property owner/manager/developer.

It could be valued on the same basis as Westfield - if you consider the
"punters" turn up in aircraft, rather than in cars.

AIA is landlord to Foodtown, the Warehouse, Freight forwarding companies,
government agencies and the airlines.  The contribution from the retail
environment in the terminals must be fairly insignificant, in revenue terms,
to the fees collected from the "big boys".

As is typical in a mall environment - the contracts in the retail space take
a percentage of revenue.  Hence, the bottom line value to AIA of increased
passenger numbers is only indirect - their tenants benefit, directly, and
this justifies higher rentals.

Freight and direct property leases would be more significant drivers of AIA
revenue.

There is the operational side to the business - supporting airline and
government procedures.  This is the specialised nature of the AIA property
business.  Given the state of the airline industry - this revenue area
cannot be viewed as exuberantly positive.

NTA is $1.80 per share.
EPS is $0.25 per share

If this share were Trans Tasman Properties - it would be selling at $1.13

It has, however, a monopoly in the Auckland region on the specialised
airport property market.  Since the Auckland region would need about 8
million people to justify setup of a competitor - the monopoly is safe for
the next few decades.

But wait ... Trans Tasman has the "Air Park".  Maybe some of the "sex
appeal" of AIA will begin rubbing off onto TTP ;)

Looking forward to TTP at $2.10 !!!

/disclosure:  Hold TTP - Do not Hold AIA


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